National General Insurance Company (NGI) has a track record of strong operating performance and generated a return on equity of 14.4% in 2023 [2022: 9.1%] (as calculated by AM Best).
The company’s earnings continue to be supported by robust underwriting results stemming from both its non-life and life portfolio, which have reported overall profits in each of the past five years of operation (2019-2023), says AM Best.
Furthermore, positive investment returns have contributed to overall profitability. Despite highly competitive conditions in NGI’s core lines of business, including medical and motor, the company reported net profits of AED74.9m ($20.4m) in 2023.
AM Best has affirmed NGI’s Financial Strength Rating of ‘A-’ (Excellent) and Long-Term Issuer Credit Rating of ‘a-’ (Excellent). The outlook of these credit ratings is ‘Stable’.
The ratings reflect NGI’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Balance sheet strength
NGI’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects the company’s risk-adjusted capitalisation to remain at the strongest level, supported by continued internal capital generation. The company’s balance sheet strength is supported further by a strong liquidity profile. The company has a well-balanced investment portfolio by asset class; however, its concentration in the UAE and moderate exposure to higher-risk assets including local equities and real estate are offsetting factors.
NGI holds a well-established position in the UAE insurance market as a mid-tier player, reporting insurance revenue of AED745.8m in 2023 (AED621.4m in 2022). NGI’s business is concentrated largely to the UAE market, and the company’s revenue is weighted toward medical business on a net basis. AM Best expects the company to grow modestly over the short-to-medium term, with a focus on achieving bottom line profitability and maintaining a balanced underwriting portfolio.