Bahrain Kuwait Insurance Company (GIG Bahrain) has a track record of strong operating performance, notes AM Best. In 2023 (under IFRS 17), the insurer generated a return on equity of 11.4% and a net-net combined ratio of 95.7% (both as calculated by AM Best).
GIG Bahrain’s underwriting profitability has supported its overall earnings historically, with the company generating technical profits on its non-life account in each of the past five years; over the same period, investment returns also have contributed toward profitability. AM Best expects the company’s underwriting performance to remain strong over the medium term.
GIG Bahrain reported increased insurance service revenue of BHD110.0m ($292m) at year-end 2023 (2022: BHD101.9m), driven by growth of conventional property, engineering and medical business.
Ratings affirmed
AM Best has affirmed the Financial Strength Rating of ‘A-’ (Excellent) and the Long-Term Issuer Credit Ratings of ‘a-’ (Excellent) of GIG Bahrain and its subsidiary, Takaful International Company (GIG Bahrain Takaful), both of which are domiciled in Bahrain. The outlook of these credit ratings is ‘Stable.’
The ratings reflect GIG Bahrain’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile, and appropriate enterprise risk management. The ratings also factor in lift from GIG Bahrain’s parent company, Kuwait-headquartered Gulf Insurance Group, due to the strategic importance of GIG Bahrain to the group.
GIG Bahrain Takaful’s ratings consider its strategic importance to GIG Bahrain. GIG Bahrain Takaful provides a platform to underwrite takaful business domestically and increases the overall operation’s market share and product offerings in Bahrain. Following its acquisition by GIG Bahrain, GIG Bahrain Takaful reported improved technical results.
Balance sheet strength
GIG Bahrain’s balance sheet strength is underpinned by its risk-adjusted capitalisation which was at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). GIG Bahrain benefits from a relatively conservative asset allocation and a reinsurance programme placed mostly with reinsurers of excellent credit quality, which mitigates the elevated credit risk associated with the company’s high cessions on commercial risks. AM Best expects GIG Bahrain’s risk-adjusted capitalisation to be maintained at the strongest level.
Business profile
GIG Bahrain commands a leading position in Bahrain’s insurance market and a strong competitive position in Kuwait. The company maintains an excellent domestic franchise, which was strengthened following its acquisition of GIG Bahrain Takaful.
The company writes a well-diversified portfolio on a gross basis, although is concentrated to motor and medical business lines after reinsurance.