A.M. Best Affirms Credit Ratings of National General Insurance Company. The outlook of these Credit Ratings (ratings) remains stable.
NGI’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This is supported by low underwriting leverage and a reinsurance panel of good credit quality. A.M. Best expects prospective capitalisation to remain strong, driven by robust internal capital generation. The company’s balance sheet strength also benefits from a good level of liquidity and no financial leverage. Offsetting rating factors include the company’s high level of reinsurance dependence, with some exposure to unrated counterparties, and concentration to real estate investments. The balance sheet strength assessment incorporates the UAE’s low economic risk, and moderate political and financial system risk.
The company has achieved a five-year average return on capital of 12%, which has been supported by strong and consistent underwriting results. NGI has demonstrated good underwriting performance across all lines of business, with a five-year average combined ratio of 92% for its non-life portfolio and a moderately profitable life book. In 2017, the company’s underwriting performance benefitted from the increase in vehicle insurance tariffs in the UAE and prudent risk selection in the medical line of business. NGI’s operating performance is further supported by stable investment income, with the company in recent years de-risking its investment portfolio away from volatile equity investments.
NGI has a well-established profile in the UAE insurance market, maintaining its position as a top 10 national insurer by gross written premium in 2017. NGI has a strong presence in the motor and medical lines of business and is one of only 12 insurers licensed to participate in Dubai Health Authority’s mandatory health insurance scheme. NGI has maintained an average rate of premium growth of 5% over the past five years, with a focus remaining on achieving bottom line profitability and a balanced portfolio.
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