AM Best Affirms Credit Ratings of Damaan Islamic Insurance Company ‘BEEMA’ (Q.P.S.C.)
May 03 2024 - 10:44AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of Damaan Islamic Insurance Company ‘BEEMA’ Q.P.S.C.
(Beema) (Qatar). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect Beema’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.
Beema 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.
Beema’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 strength factors include the company’s track record
of internal capital generation through the retention of earnings
and Beema’s ability to accumulate surpluses within the PHF whilst
regularly distributing surplus back to policyholders. At year-end
2023, Beema reported capital and surplus of QAR 715.6 million
(inclusive of QAR 210.6 million of accumulated policyholder
surplus), an 11.8% increase as compared with year-end 2022.
AM Best views Beema’s operating performance as strong. The
company has consistently reported robust technical performance,
with a five-year (2019-2023) weighted average combined ratio of
79.7%, as calculated by AM Best. Whilst a small component of
overall earnings, investment returns have continued to be positive
in each of the past five years. Earnings are well balanced between
shareholders’ and policyholders’ with both funds achieving
consistent growth over the past 10 years.
Beema holds a leading position within its domestic insurance
market, as the second largest takaful player by GWC. The company
has good diversification by line of business, offering a range of
Sharia-compliant insurance products. In 2023, Beema wrote GWC of
QAR 401.3 million (USD 110.9 million). The business profile
assessment is constrained by the company’s geographic concentration
and limited competitive position in Qatar’s 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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Romeo Berti Senior Financial Analyst +44 20
7397 0267 romeo.berti@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Michael Dunckley, CFA Associate Director,
Analytics +44 20 7397 0312
michael.dunckley@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com