AM Best has placed under review with developing implications the Financial Strength Rating of 'B' (Fair) and the Long-Term Issuer Credit Rating of 'bb' (Fair) of Arabia Insurance Company - Jordan (AICJ).
The rating action follows the announcement on 21 May that AICJ’s parent, Arabia Group Holding, has signed an agreement to sell a 39.391% stake in the company to Jerusalem Insurance Company (Jerusalem Insurance), according to a bourse announcement that AICJ filed with the Amman Stock Exchange.
The deal, which received regulatory approval states that Jerusalem Insurance will buy 3,151,286 shares of AICJ.
AM Best said, “The ‘Under review with developing implications’ status reflects uncertainty over AICJ’s future strategy and its financial strength. The ratings are expected to remain under review with developing implications until AM Best has assessed the impact on AICJ’s credit rating fundamentals, which includes an assessment of the acquirer’s creditworthiness.”
Due diligence for the acquisition has been ongoing for several months, according to market sources who say that Jerusalem Insurance aims to expand its market portfolio and command a stronger presence in the Jordan insurance market.
The move also comes as composite insurers were required to increase their capital base to JOD8m ($11.3m), up from JOD4m, by the end of April 2025.