Best Affirms Qatar General ‘B++’ Rating

November 30, 2004

A.M. Best Co. announced that it has affirmed the financial strength rating of “B++” (Very Good) of Qatar General Insurance and Reinsurance Company (S.A.Q.) (QGIR) and assigned the company an issuer credit rating (ICR) of “bbb”. Best said the newly assigned ICR reflects its financial strength opinion of QGIR expressed in the credit market scale. The outlook for both ratings is stable.

“The rating reflects QGIR’s likely maintenance of strong risk-adjusted capitalisation in 2004 and 2005 supported by solid retained earnings,” Best said. The rating agency also indicated that it “believes 2004 and 2005 performance is likely to be supported by a combined ratio of between 85 to 90 percent and a continuation of the strong investment returns of recent years—5 year average of 15 percent—emanating from realised and unrealised gains relating to Qatar based equity investments.” Best also said “further gains are likely in 2004 and 2005 as a continuation of the strong inward investment in Qatar’s general infrastructure and oil and gas sectors is anticipated.”

Best noted: “QGIR is well positioned to take advantage of the new business available as a result of strong economic growth in Qatar. The company writes a portfolio largely consisting of energy, motor and fire business, with approximately 95 percent of business emanating from Qatar and the balance from Dubai.

“QGIR’s business position, with a market share in Qatar of 35 percent, is largely protected as Qatari business is currently restricted to the five national companies (including QGIR).” Best said it “will closely monitor the company’s business position should the market be opened up to other Gulf Cooperation Council (GCC) companies in the medium term, although this is believed to be unlikely before 2006.”

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