Breaking Down the Benefits of AM Best’s Credit Ratings for International General Insurance Holdings Ltd

In its annual review of ratings, AM Best has affirmed the credit rating of International General Insurance Holdings Ltd. Financial strength and positive outlook are the reason for the rating. This rating could be changed should the business faces financial challenges. Below are a few main factors that might influence the rating.

Financial strength ratings

AM Best anticipates strong underwriting performances of International General Insurance Holdings Ltd. during the initial nine months. AM Best is confident about its solid financial standing. By 2022, the business will generate strong earnings. Also, the company will enhance its financial flexibility later in 2020. It’s expected that the firm will trade on the Nasdaq stock exchange.

Excellent performance in terms of liquidity. Highly rated panel of reinsurance. AM Best assessed the enterprise risk management for the business as indispensable. The company’s underwriting performance has been steady and its profitability has improved. It is expected that the underwriting efficiency will continue to increase and the profit levels will stay the same.

AM Best affirmed the long-term issuer credit rating of IGI. The rating of financial strength for IGI was attained by AM Best. Its ratings are a reflection of its strong balance sheet as well in a sound enterprise risk management and a satisfactory operating performance.

Long-term issuer credit ratings

Related Long-Term Issuer Credit Ratings of IGI was confirmed in the opinion of AM Best. The ratings apply to IGI, its subsidiaries, and affiliates like Chubb Bermuda Insurance Ltd. and Chubb Limited as well as MedPro Ltd. and National Indemnity Company.

The rating of each company reflects their financial health, performance and capability to comply with the policyholder’s obligations. AM Best assessed the company’s enterprise risk management (ERM) to determine if it was appropriate. They also appreciate the solid accounts of balance sheets and their operational margins. They also highlight the companies’ support of the global A&H sector.

Even though IGI’s capital pool is smaller, it offers excellent diversification as well as a reinsurance panel. Its liquidity profile has been excellent. It had the average combined ratio of five years that was 92% during 2017 through 2021. The company is expected to report strong results in the beginning of the year and then in 2022. In the past five years, underwriting performance has been inconsistent. It’s taken the corrective step to reverse its current decline in underwriting.

Profile of credit of GE affected by credit deterioration

GE has global reach and is able to generate solid profits in certain key areas. But its margins in Power and Renewable Energy are lesser than the other companies because due to the economic environment that is challenging. However, the company has an impressive market position which helps to alleviate any short-term issues that arise in these areas.

GE Capital has a long-term issuer default rating (IDR) of BBB+. The company’s leverage is higher than similar rated stand-alone lenders and financing companies however it does have a good funding flexibility and a leading airline leasing franchise. It is able to access GE Industrial facilities through intercompany loans.

GE Capital has $12 billion in loans to intercompanies and 15 billion in senior unsecured notes. Leverage for the company’s long-term is expected to be 4 times greater than financial companies with similar ratings. It is likely that the leverage will stay at the current levels over the medium-term. In the case of plane leasing there are residual value risk also present.

Outlook

International General Insurance Holdings Ltd was formed in the year 2001. It’s both an expert commercial reinsurer and an insurer which has a worldwide portfolio. It has three primary segments that include reinsurance, specialty insurance and financial establishments. General third party liability and casualty insurance are the company’s principal business areas. The company’s operations are diverse with respect to products as well as markets. Its management team has a long-standing history of recruiting top quality employees. The company’s liquidity is satisfactory and the balance sheet is good.

IGI offers a diverse collection of insurance businesses that specialize in various industries, including maritime, aviation, and engineering. The company has been awarded the provisional authorization to write surplus lines within the U.S. and will start writing surplus lines on April 1, 2020. Additionally, it opened a representative office in Casablanca Finance City, Morocco. The company is now beginning to offer energy-related insurance. Its global operations also include a branch in Dubai.

AM Best has assigned an A Financial Strength Rating IGI. IGI. The rating is an indication of IGI’s solid outlook, strong capitalisation and prudent reserving policies. IGI is predicted to produce excellent underwriting results in the coming months. AM Best also praised the company’s extensive business portfolio, as well as its strong underwriting strategy.