S&P raises Orient's rating to stable
Dubai, September 19, 2010
Standard & Poor’s has upgraded Arab Orient Insurance Group (Orient) to a full ‘A’ with a stable outlook.
Orient group also has operations in Egypt, Syria and Oman.
S&P said Orient’s performance has remained more resilient than what the UK-based agency had expected in the face of the insurance giant’s significant exposure to Dubai.
This full A rating by S&P, follows AM Best Company - the US-based insurance ratings agency - assigning a financial strength rating of ‘A’ (Excellent) and an issuer credit rating of “A” making Orient the only insurance company in the Middle East which carries such combined high ratings, a statement said.
“The S&P rating mirrors Orient’s continuing strong operating performance, its prudential asset management with strong liquidity and its strong capitalisation,” said Nigel Bond, S&P’s credit analyst.
“Management is a positive rating factor through its prudential risk discipline. These factors are partially offset by Orient's high use of reinsurance and the concentration risk from banking counterparties. The Orient group’s 2009 underwriting and operating performance was highly satisfactory and we expect the company’s operating performance to remain strong and a support for the rating,” Bond added.
He also said S&P had expected this exposure to result in slow premium growth for the market, increased competition and lower underwriting margins. “Orient group’s half yearly performance has largely been better than our expectations as key performance indicators have been positive,” Bond said.
“We are extremely pleased with Standard & Poor’s upgrading us to a full ‘A’. This further validates the successful execution of our strategy as a prudent insurer to focus on the basics of our business and generate long-term profitability. This is especially meaningful achievement when we consider the challenging market conditions and economic uncertainties that face the insurance industry today,” added Omer Elamin, senior managing director, Orient.-TradeArabia News Service