On Nov. 4, 2022, S&P Global Ratings lowered its issuer credit and financial strength ratings on QIC and its guaranteed subsidiaries to ‘A-‘ from ‘A’. The outlook is stable. At the same time, we lowered
our rating on QIC’s subordinated debt issued through QIC (Cayman) Ltd. to ‘BBB’ from ‘BBB+’.
The rating action reflects the group’s recent poor underwriting results and underperformance against similarly rated peers, impairing our view on the company’s competitive position. The group has recorded underwriting losses in each of the last five years, driven by COVID-19 business interruption claims, higher than normal catastrophe losses, and volatility in its U.K. motor insurance book. QIC also reported an overall loss of Qatari riyal (QAR) 118 million for the nine months ending Sept. 30, 2022. The result was adversely impacted by the QAR689 million loss recognized on the proposed sale of its Gibraltar businesses, which underwrite U.K. motor business sourced through Markerstudy. The U.K. motor business suffered further losses this year, as higher than expected inflation drove higher loss ratios across the market. In our opinion, the disposal of the businesses is unlikely to have a material effect on the group’s profitability going forward. While the underwriting entities contribute significant levels of premium (over $1.4 billion in 2021), the business tends to be relatively low margin and has seen significantly negative volatility in recent years.
Download the Full 2022 S & P RatingsDirect_Research – English
On March 23, 2021, S&P Global Ratings affirmed its ‘A’ issuer credit and financial strength ratings on QIC and its guaranteed subsidiaries. The outlook remains negative. At the same time, we affirmed our ‘BBB+’ rating on QIC’s subordinated debt issued through Qatar Reinsurance Company Ltd. and QIC (Cayman) Ltd.
We believe that QIC will likely receive repayment of the outstanding amount of its loan to MS in the first half of 2021. This follows an investment by Pollen Street into MS announced in January 2021. We believe that QIC has managed the delayed repayment well such that it receives compensation on its loan while maintaining its important distribution relationship with MS.
QIC reported a much-reduced net profit in 2020 of Qatari riyal (QAR) 126 million (2019: QAR671 million) driven by additional claims from both COVID-19 and natural catastrophes. QIC’s combined ratio of 112% was higher than our expectation for 2020 and at the higher end of the reinsurance peer group. We have previously viewed QIC as having less volatility in its results than peers in the reinsurance sector such as Markel, Axis, and Lloyd’s, but in recent years QIC has come closer to their levels of volatility. Despite QIC’s strong investment performance, without the gain made on the partial sale of its subsidiary, QLM Life and Medical Insurance Company Q.P.S.C., the group would have recorded a net loss in 2020.
2020 is the fourth consecutive year that QIC has recorded an underwriting loss. While its Gulf segments have continued to perform well, QIC’s international segments (Qatar Re in particular) have dragged down the overall underwriting result. We have therefore maintained our negative outlook on QIC.
Despite pressure from its underwriting results, QIC’s capital has improved over 2020 and early 2021. The group now has an excess of capital above our ‘AAA’ benchmark in our risk-based model. We expect QIC to maintain this throughout 2021-2023 as the group is likely to experience low-to-no growth over the same period. QIC’s management took several steps to improve the group’s capital position in 2020-2021. The most important of these was raising $300 million in hybrid capital early in 2020, but the group also improved capital adequacy by de-risking its investment portfolio and choosing not to pay a dividend in respect of the 2020 year.
Download the Full 2021 S & P RatingsDirect_Research – English
S&P Global Ratings expects Qatar Insurance Co. S.A.Q.’s (QIC) capital adequacy and strong business position will remain key rating strengths. Over the next two years, we anticipate QIC will maintain risk-based capital adequacy (measured using our model) above our ‘AAA’ benchmark. Moreover, despite challenging pricing conditions in some of its main business lines, the group’s large-scale, diversified premium base by geography and ability to post good results support its competitive position. From a regulatory perspective, we expect the group to maintain its solvency ratio at reasonable levels (160%-170%) over the next 12 months.
QIC has a historically aggressive growth strategy through acquisitions and new business when compared with that of peers. Following years of material, double-digit business growth, gross written premiums (GWP) in 2018 grew by about 8%, reaching Qatari riyal (QAR) 12.6 billion. This is despite the nonrenewal of a significant portion of the business resulting from corrective actions over the past two years. The group replaced a material part of declining business with premium emanating through the acquisition of U.K.-based motor insurer Markerstudy (MS), which was completed in 2018. QIC’s robust capital levels mitigates the potential risks related rapid growth and concentration to the U.K. motor market.
Despite catastrophe-heavy years in 2017-2018, QIC remained profitable thanks to investment income.In 2018, QIC posted a net combined ratio of 101% (2017: 106%). This mainly followed technical losses at Qatar Re and Antares following a number of hurricanes and typhoons as well as the California wildfires. In addition, a major marine loss in Germany affected Antares. QIC also strengthened its reserves following the MS acquisition. Offsetting this technical performance, the group’s investment income resulted in net profits of QAR664 million (2017: QAR424 million). For the first nine months of 2019, gross premiums increased slightly to QAR9.8 billion from QAR9.5 billion for the same period in 2018, reflecting QIC’s continued focus to de-risk its book. The group posted a high combined ratio (101.5%) during this period partly driven by changes to the Ogden discount rate in the U.K. (excluding this, the combined ratio is 99.3%). Furthermore, the group’s results, in common with its peers, have been affected by provisions for catastrophe events, notably Faxai and Hagibis. Net income grew by slightly to QAR500 million (compared with QAR474 million for the same period in 2018).
Download the Full 2019 S & P RatingsDirect_Analysis – English
Download the Full 2019 S & P RatingsDirect_Research – English
Our ratings on QIC reflect its strong business and financial risk profiles. Supporting factors are the group’s scale,
diversified premium base (by geography and product), and ability to post good results. This is despite the challenging
pricing conditions in some of its main business lines. The group’s ‘AAA’ level risk-based capital (measured using our
model) somewhat mitigates its acquisitive nature and rapid premium growth through new business particularly in new
territories. The latter is demonstrated by the significant levels of U.K. business the group is writing through
Markerstudy (MS). Furthermore, the group acquired Gibraltar-based motor insurer MS’ four insurance entities.
Download the Full 2018 S & P RatingsDirect_Analysis – English
The stable outlook reflects our expectation that QIC’s capital and earnings will be strong and sufficient to support
its expansion plans over the next 24 months. We expect that QIC’s risk-based capital will be at least at very strong
levels through 2017-2018.
Downside scenario
We could lower the ratings over the next 24 months if:
Upside scenario
Although highly unlikely over the next 24 months, we could consider raising the ratings if QIC demonstrated that it
could post strong combined ratios.
Download the Full 2017 S & P RatingsDirect_Analysis English
On June 20, 2016, S&P Global Ratings affirmed its ‘A’ counterparty credit and financial strength ratings on Qatar Insurance Co. S.A.Q. (QIC) and its guaranteed subsidiaries (see ratings list). The outlook is stable.
During 2015, the group’s gross premium increased by almost 50%, mostly due to key accounts relating to the U.K. motor business. This growth, coupled with the related increase in claims reserves, has weighed significantly on the group’s previously extremely strong risk-based capital (measured using our model). In recognition of the rapid growth and the group’s willingness to manage capital at solid levels, QIC increased its capital by about 25% during the first half of 2016 through a rights issue. While we recognize that this increase mitigated some of the pressure, we expect that QIC will retain sufficient earnings during 2016-2017, allowing it to rebuild its risk-based capital level to very strong from strong. At the same time, we anticipate that the business mix will stabilize and that net premium growth will be more modest.
The ratings reflect our view of QIC’s strong business and financial risk profiles. The combination of these factors results in an anchor of either ‘a’ or ‘a-‘. We have used an ‘a’ anchor because we consider that QIC’s strong business and financial risk profiles understate their contribution to its overall creditworthiness. The final rating is the same as the anchor, reflecting our view that the potential modifying factors–principally QIC’s
satisfactory management and governance, adequate enterprise risk management(ERM), and strong liquidity–are currently neutral for the ratings.
QIC’s strong business risk profile reflects its strong and diverse competitive position, supported by its dominant domestic position, its regional GCC operations, and the substantial reinsurance income stream–albeit with some concentration to the U.K. motor market. We believe the broad diversity of its product offerings and geographies are key supporting factors. We forecast that the group’s gross premium is likely to grow by about 10%-15% annually over 2016-17, partly driven by more new business from the U.K. motor market during 2016. While we recognize that the group has grown substantially in a challenging pricing environment, we expect that it will maintain its pricing discipline.
For 2016-2017, we forecast that QIC will deliver combined (loss and expense) ratios of just above 95%, as well as return on equity and return on revenue of 15% annually, largely supported by investment gains in line with previous years. Hence the group is likely to generate net profits of about Qatari riyal (QAR) 1 billion annually. We expect the group to retain sufficient earnings such that its risk-based capital builds to very strong levels. We recognize that the group has propensity for significant growth levels beyond what we believe can be reliably quantified, as demonstrated in 2015. Therefore our view of strong capital and earnings reflects this potential.
We have revised our view of the group’s liquidity to strong mostly because of the pledged assets within its investment portfolio. The group has sufficient liquidity because securely rated fixed-interest instruments and cash alone comfortably cover the net technical reserves.
Download the Full 2016 S & P Rating Research English
Download the Full 2016 S & P Rating Analysis English
Ratings On Kuwait Qatar Insurance Co And Guaranteed Subsidiaries Affirmed At ‘A’ ; Outlook Stable
(19/7/2015; Kuwait)
The stable outlook reflects our view that KQIC’s capital and earnings will continue to be very strong and sufficient to support its expansion plans. We expect that KQIC’s financial strength will remain reinforced by extremely strong capital adequacy and stable positive earnings.
Upside scenario We could consider raising the ratings in the next two to three years if KQIC successfully and sustainably assimilates its new business platforms, as seen in combined ratios sustainably outperforming the market average in international reinsurance.
Downside scenario, We consider a downgrade unlikely, but we could lower the ratings if we saw:
On Aug 19, 2015, Standard & Poor’s Ratings Services affirmed its ‘A’ counterparty credit and financial strength ratings on Kuwait Qatar Insurance Co. S.A.Q. (KQIC). The outlook is stable.
To read the full analytical report for Kuwait Qatar Insurance Company by Standard & Poor’s, please click on the link below to download the report in PDF format.
Download the Full 2015 S & P rating analysis English
Ratings On Kuwait Qatar Insurance Co and Guaranteed Subsidiaries Affirmed At ‘A’; Outlook Stable
(3/07/2014; Kuwait)
On July 3, 2014, Standard & Poor’s Ratings Services affirmed its ‘A’ counterparty credit and financial strength ratings on Kuwait Qatar Insurance Co. S.A.Q. (QIC). The outlook is stable.
Download the Full 2014 S&P rating analysis icpdf English
Kuwait Qatar Insurance Co and Guaranteed Subsidiaries Ratings Affirmed At ‘A’ after Insurance Criteria Change; Outlook Stable
(27/06/2013; Doha, Qatar)
Standard & Poor’s Ratings Services affirmed its ‘A’ insurer financial strength and counterparty credit ratings on Qatar-based multiline insurer Kuwait Qatar Insurance Co. S.A.Q. (KQIC) and its guaranteed subsidiaries, QLife & Medical Insurance Company LLC (QLM), QIC International LLC (QICI), and Q-Re LLC. The outlook on all entities is stable.
Download the Full 2013 S&P rating analysis English
Kuwait Qatar Insurance Co. S.A.Q.
(13/09/2012; Kuwait)
The ratings on Kuwait-based insurer, Kuwait Qatar Insurance Co. S.A.Q. (KQIC; A/Stable/–), and its guaranteed subsidiaries KQIC International LLC, Q-Re LLC and Q Life & Medical Insurance Company LLC, reflect the group’s very strong capitalization, strong liquidity, and strong competitive position. These strengths are partially offset by the execution risks entailed in expanding the operations across the GCC region and beyond, and to some extent the locally concentrated investment portfolio. Though weaker in 2011, earnings remain strong and contribute positively to the rating.
Download the Full 2012 S&P rating analysis English
Kuwait Qatar Insurance Co. Upgraded To ‘A’ On Continually Strong Competitive Position; Outlook Stable
(09/08/2010; Kuwait)
KQIC’s competitive position is strong. The company is strong in its domestic market, with a market share of around 50%. Since inception, KQIC has posted profitable results. During the past three years, the net combined ratio has averaged around 84%. KQIC’s international operations continue to increase the amount they contribute to the overall business; in 2009 international net premiums written (NPW) were around KWD619 million (2008: QAR491 million), with a net underwriting result of KWD165 million (2008: KWD133 million). This compares to KWD516 million (2008, QAR483 million) NPW from domestic operations, with a net underwriting result of QAR230 million (2008, KWD173 million). Retention now stands at 53% compared to 31% in 2005 and has generally increased across all lines, although the highest retentions continue to be for retail and lower-severity products.
Over the next two years, Standard & Poor’s expects a relatively low level of gross premium growth in line with 2009’s results, although premiums from KQIC’s international operations is expected to exceed 50% in 2010. Net retention of premium is also expected to continue its gradual rise and the combined ratio is expected remain stable at around 85%.
Download the Full 2010 S&P rating analysis English
Kuwait Qatar Insurance Co. S.A.Q. ‘A’ Long-Term Ratings Affirmed; Outlook Stable
(28/05/2009; Kuwait)
Standard & Poor’s Ratings Services affirmed its ‘A’ long-term counterparty credit and insurer financial strength ratings on based Kuwait Qatar Insurance Co. S.A.Q. (KQIC). The outlook is stable. The company, like its peers, has not been immune to the deterioration in global investment markets and the global and regional macro-economic downturn.
Download the Full 2009 S&P rating analysis English
Kuwait Qatar Insurance Co. Upgraded To ‘A’ On Continually Strong Competitive Position; Outlook Stable
(16/02/2006; Kuwait)
Standard & Poor’s Ratings Services said today it raised its long-term counterparty credit and insurer financial strength ratings on Kuwait Qatar-based underwriter Kuwait Qatar Insurance Co. S.A.Q. (KQIC) to ‘A’ from ‘A-‘. The outlook is stable.
“The upgrade is driven by KQIC’s continuing dominance of the local market, as well as its growing presence across the Gulf Cooperation Council region and the resultant earnings potential for the company,” said Standard & Poor’s credit analyst Jelena Bjelanovic.
The ratings on KQIC reflect the company’s extremely strong capital adequacy, strong and established competitive position, and very strong operating performance. These factors are partially offset by the potential for adverse operational volatility, KQIC’s very high reliance on reinsurance protection in certain lines of business, and the heavy local concentration of its investment portfolio.
The outlook on KQIC is stable, reflecting our expectations that:
Download the Full 2006 S&P rating analysis English
Balance Sheet Strength: Very Strong
Operating Performance: Adequate
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
To read the full document, click here
Balance Sheet Strength: Very Strong
Operating Performance: Strong
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
Rating Drivers
To read the full document, click here
Balance Sheet Strength: Very Strong
Operating Performance: Strong
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
Rating Drivers
To read the full document, click here
Balance Sheet Strength: Very Strong
Operating Performance: Strong
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
Rating Drivers
To read the full document, click here
Balance Sheet Strength: Very Strong
Operating Performance: Strong
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
Rating Drivers
To read the full document, click here
Balance Sheet Strength: Very Strong
Operating Performance: Strong
Business Profile: Neutral
Enterprise Risk Management: Appropriate
Outlook
Rating Drivers
To read the full document, click here
A.M. Best Comments on Ratings of Kuwait Qatar Ins. Co. S.A.Q. & Its Main Subsidiaries Following Acquisition of Antares Holdings Ltd
(09/07/2014; London, UK)
A.M. Best has commented that the financial strength rating of A (Excellent) and the issuer credit ratings of “a” of Kuwait Qatar Insurance Company S.A.Q. (KQIC) (Kuwait) and its main subsidiaries remain unchanged following KQIC’s acquisition of Antares Holdings Limited (Antares). A.M. Best will closely monitor KQIC’s capital position and operating performance following this strategic transaction and the high level of growth anticipated within its reinsurance subsidiary.
The acquisition of Antares is in line with KQIC’s strategy to build an international, diversified insurance group. The acquisition provides KQIC with greater diversification geographically and by line of business. Antares is a specialist insurance and reinsurance group operating in the Lloyd’s market, writing GBP 224 million (USD 384 million) of premium revenue, translating into approximately 40% of KQIC’s profile at year-end 2013. Antares underwrites business through Lloyd’s Syndicate 1274, using its integrated managing agency, and it has a Bermudian platform with a Class 3 reinsurance license. KQIC is expected to achieve year-on-year gross premium growth of 64% in 2014 due to the acquisition of Antares and with the expansion of its existing reinsurance subsidiary, Kuwait Reinsurance Company LLC.
KQIC’s strong risk-adjusted capitalisation has enabled it to fund the acquisition internally, while maintaining sufficient capital adequacy for the current rating level. Given the robust profitability of Antares’ and KQIC’s direct domestic and international operations, KQIC is expected to be able to grow its capital organically to support prospective growth.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures:A.M. Best Europe – Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.
A.M. Best Affirms Ratings of Qatar Insurance Company S.A.Q. and Its Main Subsidiaries
(04/12/2014; London, UK)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of “a” of Kuwait Qatar Insurance Company S.A.Q. (KQIC) and its main subsidiaries: KQIC International LLC (QICI) and Kuwait Reinsurance Company LLC (Qatar Re). The outlook for all ratings remains stable. All companies are domiciled in Kuwait.
The ratings for KQIC reflect its very strong risk-adjusted capitalisation, robust underwriting performance and global business diversification. Offsetting rating factors are KQIC’s concentration in Kuwaiti equities and the execution risk associated with the rapid growth of group, particularly within its reinsurance arm.
KQIC’s risk-adjusted capitalisation remains very strong, despite considerable additional capital requirements created by the acquisition of Antares Holdings Limited (Antares) and the rapid expansion of Qatar Re. Prospective risk-adjusted capitalisation is expected to remain strong, benefiting from a high level of internal capital generation. Additionally, KQIC’s supportive shareholders provide the company with good financial flexibility.
The company has a strong track record of operational performance, with a 5-year weighted average return on equity of 17.4%. Underwriting performance remained robust in 2013, with a combined ratio of 93%, which reflected very strong results in KQIC’s domestic market. However, performance was dampened by unfavourable reserve developments on losses in prior underwriting years and the high costs of expansion at Kuwait Re. KQIC’s profit for the year was KWD 778 million (USD 214 million), although profitability remains heavily weighted toward investment income. In the first three quarters of 2014, KQIC generated an operating profit of KWD 801 million (USD 220 million) at a combined ratio of 97%.
The acquisition of Antares and expansion of Kuwait Re during 2014 has produced year-on-year growth of in excess of 50%, and gross written premium for the year is expected to reach KWD 5.8 billion (USD 1.6 billion). KQIC enjoys a dominant position in the Kuwaiti market and has a global reach, with 73% of gross premiums emanating from abroad. Through QICI, KQIC has a sound position in the United Arab Emirates market, and Antares gives the group access to a portfolio of marine, casualty and aviation business written through Lloyd’s.
The rapid expansion of Kuwat Re continues to represent material execution risk. However, KQIC has made significant improvements in group-wide risk management, incorporating capital modeling into strategic decisions and bolstering catastrophe modeling and actuarial capabilities.
The ratings for QICI and Kuwait Re incorporate a strong level of support from KQIC, as evidenced by a guarantee provided to both companies, as well as capital injections and an internal quota share arrangement to support business written at Kuwait Re.
Upward rating actions are unlikely in the near term. Negative rating pressure could arise if either KQIC or Kuwait Re is unable to meet their strategic objectives, or if there is change in the level of rating enhancement provided to the subsidiaries.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilised:
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
Best’s Rating of A (Excellent); Financial Size Category of XI ($750 Million to $1 Billion)
(06/12/2013; London, UK)
| Best’s Financial Strength Rating: A | Outlook: Stable |
| Best’s Issuer Credit Rating: A | Outlook: Stable |
The ratings for Qatar Insurance Company SAQ (KQIC) reflect its excellent prospective risk-adjusted capitalisation supported by strong financial flexibility, robust underwriting performance and strong business diversification. Offsetting rating factors are KQIC’s concentration in Qatari equities, the ongoing development of enterprise risk management (ERM) to support the company’s expansion and the execution risk associated with K-Re LLC (Q-Re).
The ratings for Kuwait International LLC (QICI) and K-Re incorporate a strong level of support from its parent, KQIC. KQIC provides a parental guarantee to both companies and has supported K-Re through capital injections of KWD 146 million in 2012 and KWD 182 million in 2013, with a further KWD 182 million expected in 2014. The international businesses and their growth are central to KQIC’s overall strategy as well as integrated into the group through shared management and dependence on shared asset management, IT and audit functions. The group also provides internal reinsurance to its subsidiaries.
Download the Full 2013 Best’s Credit Report English
A.M. Best Europe – Rating Services Limited has assigned a financial strength rating of A (Excellent) and issuer credit ratings of “a” to Kuwait Qatar Insurance Co SAQ (KQIC), KQIC International LLC (QICI), and Q-Re LLC (Q-Re).
(26/11/2013; Kuwait)
The outlook for all ratings is stable. All companies are domiciled in Qatar.
The ratings for KQIC reflect its excellent prospective risk-adjusted capitalization supported by good financial flexibility, robust underwriting performance and strong business diversification. Offsetting rating factors are KQIC’s concentration in Kuwiati equities, the developing state of the company’s enterprise risk management (ERM) systems to support the company’s expansion and the execution risk of the Q-Re expansion plan.
The ratings for QICI and K-Re incorporate a strong level of support from KQIC as evidenced by a parental guarantee provided over both of these companies, capital injections to support business written at K-Re, importance of the international businesses to KQIC’s overall strategy and integration into the overall group
Download the Full 2012 Best’s Credit Report English
