AM Best Affirms Credit Ratings of Qatar Islamic Insurance Group Q.P.S.C.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Qatar Islamic Insurance Group Q.P.S.C. (QIIG) (Qatar). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect QIIG’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

QIIG is a takaful insurer and operates through a hybrid model, whereby the shareholders’ fund charges the policyholders’ fund (PHF) a Wakala fee based on gross written contributions (GWC) and a Mudarabah fee based on investment income.

QIIG’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best assesses the company’s risk-adjusted capitalisation on a combined basis, including its policyholders’ and shareholders’ funds, due to the strength of domestic regulation and requirement that the shareholders’ fund would have to support the PHF. Other positive balance sheet factors include the company’s track record of internal capital generation through the retention of earnings and QIIG’s ability to accumulate surpluses within the PHF whilst distributing surplus back to policyholders. At year-end 2023, QIIG reported capital and surplus of QAR 702.8 million (inclusive of QAR 173.0 million of accumulated policyholder surplus), a 0.3% increase as compared with year-end 2022. While maintaining sufficient liquidity to support its insurance operations, QIIG’s investment portfolio carries exposure to higher risk real estate assets and investments in associates, which accounted for 37.8% of its total investments as at year-end 2023.

AM Best views QIIG’s operating performance as strong. The company has reported robust technical performance consistently, with a five-year (2019-2023) weighted average combined ratio of 72.0%. Whilst a small component of overall earnings, investment returns have continued to be positive in each of the past five years.

QIIG holds a niche position within its domestic insurance market, where it is a market-leading takaful player. The company has good diversification by line of business, offering a range of Sharia-compliant insurance products. In 2023, QIIG wrote GWC of QAR 523.5 million (USD 144.7 million). The business profile assessment is constrained by the company’s geographical concentration and limited competitive position in the Qatari insurance market.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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