News
AM Best places Misr Insurance Company under review
| June 10, 2010 by Tracey Scott
Ratings agency AM Best has placed Misr Insurance Company under review with negative implications following its announcement to restructure the group companies.
AM Best has placed the financial strength rating of the Egyptian insurer as B++ (good) and the issuer credit rating of bbb+ with negative implications following Misr’s announcement to restructure the group companies operating under Insurance Holding Company to comply with regulatory requirements of Egyptian insurance law.
The law obliges companies to separate life and non life portfolios from July 1, 2010.
The restructuring of business entails the transfer of non-life business from National Insurance Company of Egypt (NICE) into Misr, and conversely, life business from Misr into NICE. This is expected to create specialised life and non-life insurance companies under IHC. NICE is expected to be rebranded as Misr Life Insurance Company from July 1, 2010.
A statement released by AM Best said: “Misr’s capital position, which decreased during 2009, may be further pressurised following the restructuring. AM Best will need to assess the impact of Misr’s capital strategy, in particular the reallocation of capital, assets and liabilities, in addition to any planned capital increases.
“Furthermore, Misr’s underwriting performance is expected to remain under strain given the poor performance of motor third party liability business, in addition to the transfer of profitable life business to NICE.”
The under review status is expected to be resolved as soon as sufficient detail regarding the restructuring has been assessed and potential implications on Misr have been clarified.
