A.M. Best has removed from under review with negative implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb" of Arab Orient Insurance Co. (gig Jordan) (Jordan). The outlook assigned to these Credit Ratings (ratings) is negative.
The ratings reflect gig Jordan's balance sheet strength, which A.M. Best categorises as strong, its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM). The ratings also factor in the financial strength of gig Jordan's parent company, Gulf Insurance Group KSCP (GIG), due to its strategic importance to the group. The negative outlook reflects gig Jordan's declining operating performance, which, if not rectified in 2018, may lead to negative rating action.
In June 2017, gig Jordan's ratings were placed under review with negative implications, following the correction of an IT system calculation error that impacted operating performance in 2016 and the first-quarter 2017 performance. This consequently led to a significant decrease in the company's regulatory solvency position. In November 2017, gig Jordan received a loan from GIG, which boosted its solvency level, and as a result, the company is expected to meet regulatory capital requirements at year-end 2017.