A.M. Best Revises Issuer Credit Rating Outlook to Positive for Union Insurance Company P.S.C.
Dubai, UAE- November12, 2014 - A.M. Best Europe - Rating Services Limited has assigned a financial strength rating of B++ (Good) and issuer credit rating of 'bbb' to Union Insurance Company. The outlook assigned to both ratings is stable.
As per AM Best's press release, the ratings reflect Union's strong risk-adjusted capitalisation and developing business profile. The revised ICR outlook reflects the company's improving technical performance, following the appointment of new management in Q2 2012.
Union's technical operations returned to profit during 2013 and maintained solid results for the first nine months of 2014, generating pre-tax operating profits of AED 66.7 million and AED 43.8 million respectively. The improvement in its technical performance reflects remedial actions taken by the company's new management. The company has tightened its underwriting controls and risk selection process, with a focus on profitability over non-performing business segments.
The company's risk-adjusted capitalisation strengthened during 2013, reflecting a 28.3% rise in the company's capital and surplus to AED 329.4 million, which further increased to Dhs376.3 million as of 30 September 2014, following full retention of earnings. The growth in capital and surplus has been more than sufficient to offset increased underwriting, investment and credit risk during the period. Prospective risk-adjusted capitalisation is anticipated to remain commensurate with the current rating level, supported by strong internal capital generation.
About Union Insurance Company
Established in 1998 and listed on the Abu Dhabi Securities Exchange, Union Insurance Company is regulated by the UAE Insurance Authority and has a paid up capital of over AED 330 million. The company provides a wide range of individual and commercial insurance products to clients in the UAE and Middle East region.