A.M. Best Assigns Ratings to Misr Life Insurance Company

LONDON--(BUSINESS WIRE)-- A.M. Best has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb” to Misr Life Insurance Company (Misr Life) (Egypt), a wholly owned subsidiary of Misr Insurance Holding Company (Misr Holding). The outlook assigned to both ratings is stable.

The ratings of Misr Life reflect its solid risk-adjusted capitalisation, track record of strong and stable technical results and its superior market position as a leading life insurer in the domestic market. These positive rating factors are partially offset by its satisfactory albeit emerging enterprise risk management, in addition to the elevated level of economic and financial system risk associated with Egypt. The ratings also factor in the financial strength and flexibility of the parent company, as well as Misr Life’s strategic importance to the group.

Misr Life has established an excellent business profile within Egypt’s domestic life insurance market, with its leading position contributing to a market share of approximately 42% of life gross written premiums. The business mix consists mainly of group life products and individual endowment policies. The company has an extensive agency network allowing it access to the entire country. Misr Life intends to further diversify its market profile by providing unit-linked products once the distribution platforms are in place.

Misr Life has solid risk-adjusted capitalisation at financial year-end of 2015 with capital requirements largely driven by the company’s asset portfolio, which is largely driven by life products and restricted to Egypt. Misr Life’s capital position is expected to decline due to high earnings distribution; however, it is expected to remain supportive of the ratings and sufficient to absorb its strategic objectives over the next few years. The company’s risk-adjusted capitalisation is bolstered by its real estate portfolio, for which market values are significant in excess of net book values. Hence, Misr Life’s capital position is subject to volatility given its sensitivity to movements in the market price of its real estate portfolio. Misr Life has produced a track record of strong operating results underpinned by stable technical earnings and relatively stable investment income. The company has a mature portfolio benefitting from strong new business generation and low lapse rates. Misr Life’s prudent approach to pricing and reserving has ensured that its commitment to guaranteed business is adequately covered by the income generated from its core operations.

Misr Life has a silo approach to manage risk with good handling and understanding of its key exposures. Misr Life is in the process of formalising and implementing its risk management framework with the assistance of its lead reinsurer. In addition, Misr Life is recruiting a full time manager to take the ownership and implement the new and enhanced framework.

Political and financial instability, as well as social unrest in Egypt have the potential to disrupt the economic conditions in Egypt. Despite Misr Life’s track record of successfully navigating these challenging market conditions, A.M. Best continues to monitor the impact these external factors may have on the company’s operations.

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 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.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best
Fahim Awan
Financial Analyst
+(44) 20 7397 0315
[email protected]
or
Mahesh Mistry
Director, Analytics
+(44) 20 7397 0325
[email protected]
or
Christopher Sharkey
Manager, Public Relations
+(1) 908 439 2200, ext. 5159
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
[email protected]

Source: A.M. Best Company

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