AM Best Affirms Credit Rating of Kuwait Reinsurance Company K.S.C.P.

LONDON–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-” of Kuwait
Reinsurance Company K.S.C.P. (Kuwait Re) (Kuwait). The outlook of these
Credit Ratings (ratings) remains stable.

The ratings reflect Kuwait Re’s balance sheet strength, which AM Best
categorises as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk
management.

Kuwait Re’s balance sheet strength is underpinned by risk-adjusted
capitalisation, which, as measured by Best’s Capital Adequacy Ratio
(BCAR), is at the strongest level. The company’s balance sheet strength
also benefits from prudent reserving practices. The company maintains
good levels of liquidity, as evidenced by a ratio of liquid assets to
net technical reserves of 109% at the end of 2018. Capital consumption
is driven predominantly by underwriting risks, due to the company’s top
line growth in 2018 and high premium retention.

Following a change in management in 2016, the company altered its
business strategy and increased its focus on bottom line profitability.
This has translated into improved technical performance and reduced
volatility in operating results, with the company reporting a healthy
average combined ratio for the period 2016 to 2018 of 96.9%, and an
average return on equity of 6.2%.

Kuwait Re’s business profile is supported by its good geographical
diversification, through operations spanning the Middle East and North
Africa, Asia-Pacific and Central and Eastern Europe. The underwriting
portfolio is well-diversified by class of business, and the company
provides proportional, non-proportional and facultative solutions to its
cedants. Since its change in strategy, Kuwait Re’s portfolio mix has
shifted in favour of facultative and excess of loss business, with these
two lines of business accounting for 53% of the KWD 46.6 million premium
written in 2018 (2017: 58% of KWD 35.1 million). Whilst Kuwait Re is
predominantly a non-life reinsurer, its life reinsurance operations
continue to grow, with gross written premiums increasing from KWD 1.8
million in 2017 to KWD 2.6 million in 2018.

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 Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

William Keen-Tomlinson, ACA
Financial Analyst
+44
20 7397 4395
will.keen-tomlinson@ambest.com

Salman Siddiqui
Associate Director, Analytics
+44
20 7397 0331
salman.siddiqui@ambest.com

Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
james.peavy@ambest.com