AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Qatar General Insurance & Reinsurance Co. QPSC(QGIRC) (Qatar).
The Credit Ratings (ratings) reflect QGIRC’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The revised outlooks reflect the decline in QGIRC’s operating performance, which has placed pressure on AM Best’s current assessment of strong. In recent years, and particularly in 2019, the group’s technical and operating earnings have experienced deterioration, falling below historical averages and regional peers. QGIRC’s earnings have demonstrated its vulnerability to Qatari real estate markets, with notable volatility driven by adverse fair value movements. The group has implemented initiatives to improve its operating performance; however, a level of execution risk still exists and is encumbered further by the group’s strategic expansion into selected global reinsurance markets.