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Press release content from Business Wire. The AP news staff was not involved in its creation.
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Press release content from Business Wire. The AP news staff was not involved in its creation.

AM Best Affirms Credit Ratings of gig Insurance - Egypt S.A.E.

September 9, 2021 GMT

LONDON--(BUSINESS WIRE)--Sep 9, 2021--

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of gig Insurance - Egypt S.A.E. (gig-Egypt) (Egypt). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect gig-Egypt’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement from gig-Egypt’s parent company, Gulf Insurance Group K.S.C.P. (GIG), reflecting the strategic importance of gig-Egypt to the group.

gig-Egypt’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital requirements are driven by investment risk, with the majority of its assets held in Egyptian government bonds and local real estate. Regulatory restrictions in Egypt limit the investment opportunities available to gig-Egypt; however, the company’s capital position is sufficiently robust to absorb the higher risk charges associated with assets held locally. Furthermore, the company benefits from low underwriting leverage and has a history of internal capital generation. AM Best expects consolidated risk-adjusted capitalisation to remain at the strongest level over the medium term. The assessment also considers gig-Egypt’s exposure to high levels of economic, political and financial system risk from operating exclusively in Egypt.

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gig-Egypt has an excellent record of underwriting and overall profitability, reporting a five-year (2016-2020) average combined ratio of 81.9%. gig-Egypt’s five-year average return-on-equity ratio is healthy at 26.6%, although should be considered in light of Egypt’s historically high-inflation environment. Overall earnings are driven by robust investment income, with the company reporting a five-year average investment return of 10.6% (10.9% including capital gains).

gig-Egypt is the third largest non-life insurer in its domestic Egypt market, measured by gross written premium, with a non-life market share of approximately 7%. However, the company’s profile is limited to its domestic market and concentrated heavily toward the motor business line on a net premium basis. GIG continues to integrate operationally with its subsidiary, providing support in areas such as reinsurance purchasing, risk management, pricing and reserving, and investment management services. In addition, GIG has demonstrated its commitment to gig-Egypt through the periodic capitalisation of retained earnings, providing funding for capital expenditures and by increasing its ownership stake in gig-Egypt.

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This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210909005903/en/

CONTACT: Algirdas Karvelis

Financial Analyst

+44 20 7397 0285

algirdas.karvelis@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comTim Prince

Director, Analytics

+44 20 7397 0320

timothy.prince@ambest.comJim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: NEW JERSEY EUROPE UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: INSURANCE PROFESSIONAL SERVICES

SOURCE: AM Best

Copyright Business Wire 2021.

PUB: 09/09/2021 01:01 PM/DISC: 09/09/2021 01:02 PM

http://www.businesswire.com/news/home/20210909005903/en