The ratings reflect BNI’s solid risk-adjusted capitalisation, track record of good operating profitability, and strong position within its domestic insurance market. An offsetting rating factor is the company’s concentration in the Bahraini market.
The company’s risk-adjusted capitalisation remains strong, despite a gradual decline in recent years stemming from high dividend distributions and net premium growth. Capital consumption is weighted towards asset risk, given the company’s equity exposure. However, the investment portfolio is well-managed and benefits from good diversification in terms of asset class, industry and geographical location. Counterparty credit risk arising from significant reinsurance cessions on commercial business is mitigated by a well-rated reinsurance panel. Prospective risk-adjusted capitalisation is expected to remain supportive of the ratings, despite an onerous dividend policy limiting internal capital generation.
BNI has a track record of solid operating and technical profitability, illustrated by a five-year average return on equity of 14%. Whilst competitive market pressures in
BNI has an excellent profile in its domestic insurance market, particularly within the motor line of business where it holds a market-leading position. BNI’s gross written premium grew by 3% in 2015 to
Offsetting rating factors are the intense domestic competition prevailing in BNI’s core market and the elevated levels of economic, political and financial system risks associated with
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