The operating performance of Bahrain-based Life Insurance Corporation (International) [LICI] is adequate, albeit subject to some volatility, primarily due to movements in interest rates, says AM Best.
The company has reported a three-year (2023-2025) average return-on-equity ratio of 8% under IFRS 17, with the performance primarily driven by investment results. The underwriting results in 2025 were negatively impacted by the establishment of a provision for future bonuses on participatory products, in line with the reporting requirements. AM Best expects LICI’s operating performance to remain adequate over the medium term.
Upgrade to Long-Term ICR
AM Best has upgraded LICI’s Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” (Fair) from “bb” (Fair) and affirmed the Financial Strength Rating of “B “(Fair). The outlook of these credit ratings is ‘Stable’.
The ratings reflect LICI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and weak enterprise risk management (ERM). The ratings also reflect rating enhancement, in the form of lift, from its ultimate shareholder, the Indian government.
The upgrade to the Long-Term ICR reflects stability in the company’s risk-adjusted capitalisation over the recent years, which was comfortably within the strongest level in 2025, as measured by Best’s Capital Adequacy Ratio (BCAR), and the increase in its capital and surplus. AM Best expects LICI’s BCAR to remain at the strongest level, driven by its conservative investment strategy and sustained internal capital generation.
Business profile
LICI benefits from its niche market position, mainly targeting India’s expatriate community in the Gulf Cooperation Council countries by leveraging the Life Insurance Cooperation of India group’s strong brand and the portability of its policies back to India. Nonetheless, the company’s profile has been decreasing for the past several years following its strategic shift from traditional endowment products in favour of less capital-intensive unit-linked products. AM Best will continue to monitor management’s execution of its strategic growth plans.
Risk management
LICI’s ERM framework is assessed as weak, which has been evident through poor capital management capabilities in the past and material restatements of the 2023 financial statements under IFRS 17. Historically, the company’s risk management has proven to be more reactive than proactive, often leading to prolonged delays in executing remedial actions.
AM Best acknowledges that the company has largely resolved its capital management and IFRS 17 reporting challenges and expects LICI to continue to formalise and enhance its risk management framework and capabilities.