A.M. Best Downgrades Credit Ratings of Middle East Insurance Company Plc
The rating downgrades consider MEICO’s marginal level of risk-adjusted capitalisation, reflecting an investment portfolio that is concentrated in local real estate and equities, which together accounted for over 90% of the company’s total investments at year-end 2015. Management has taken actions to de-risk the company’s balance sheet, including the disposal of real estate investments, and whilst the company has realised significant gains during the first half of 2016, there has only been a modest improvement in risk-adjusted capitalisation. Internal capital generation has been limited in the past by an onerous dividend policy, and the concentrated investment portfolio, coupled with a slim capital buffer, exposes the company’s risk-adjusted capitalisation to potential volatility. In addition, the company remains exposed to the economic and financial system risks associated with
MEICO has generated operating profits in each year since inception, equally supported by investment income and technical results. In 2015, underwriting profits rose 3% to JOD 1.9 million (
MEICO remains one of the leading insurers in
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.
Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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