Damaan Islamic Insurance Company (Beema) has shown strong operating performance, consistently reporting robust technical performance, notes AM Best.
Earnings are well-balanced between shareholders and policyholders with both funds achieving consistent growth over the past 10 years.
Beema is a takaful insurer and operates through a hybrid model, whereby the shareholders’ fund charges the policyholders’ fund (PHF) a wakala fee based on gross written contributions (GWC) and a mudarabah fee based on investment income.
The takaful company has a five-year (2020-2024) weighted average combined ratio of 80.5%. The combined ratio increased in 2024 to 93.4% (2023: 82.2%), driven predominantly by losses incurred on its international facultative reinsurance portfolio following the UAE floods, which took place in the first half of the year.
Despite the deterioration in non-life underwriting results in 2024, the company continues to demonstrate strong profitability in its core life & health segment.
Ratings affirmed
AM Best has affirmed Beema’s Financial Strength Rating of ‘A-’ (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’. The outlook of these credit ratings is ‘Stable’.
The ratings reflect Beema’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
Beema’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 assesses the company’s risk-adjusted capitalisation on a combined basis, including its policyholders’ and shareholders’ funds, due to the strength of domestic regulation and requirements that the shareholders’ fund would have to support the policyholders’ fund if the latter was to fall into a deficit.
Other positive balance sheet strength factors include Beema’s track record of internal capital generation through the retention of earnings and its ability to accumulate surpluses within the PHF whilst regularly distributing surplus back to policyholders. At year-end 2024, Beema reported capital and surplus of QAR795.0m [$218m] (inclusive of QAR237.4m of accumulated policyholder surplus), an 11.1% increase as compared with year-end 2023.
Business profile
Beema holds a niche position within its domestic insurance market, as the second-largest takaful player by GWC. However, in the context of the wider Qatari insurance market, Beema has a more modest profile, with a market share of approximately 4%.
The company’s concentration of contributions from a single market is partially mitigated by a diversified portfolio by lines of business, both on a gross and net written contributions basis. Further diversification is achieved through a small, albeit growing, portfolio of inward international facultative reinsurance.