Dubai-Based Insurer Salama/IAIC Ratings Lowered As Problems At Reinsurance Subsidiaries Continue; Outlook Negative
Standard & Poor’s Ratings Services has lowered the counterparty credit and financial strength ratings on Dubai-based Salama/Islamic Arab Insurance Co. (Salama/IAIC) to ‘BBB ’ from ‘A-’ . The outlook is negative. The counterparty credit and financial strength ratings on Salama/IAIC’s wholly-owned, Malaysia-based reinsurance subsidiaries, BEST RE and BEST RE Family have also been lowered to ‘BBB’ from ‘A-’ . The consolidated Salama/IAIC group displays a satisfactory business risk profile, and a strong financial risk profile. S&P has revised its view of the BEST RE subgroup’s group status to its parent to strategically important from core because the subgroup’s activities, size, and earnings potential have reduced. Despite the group and subgroup’s current difficulties, the rating agency continues to regard the consolidated Salama group’s capital adequacy as extremely strong. The outlook can be revised to stable if the situation at BEST RE stabilizes without causing material financial or reputational issues for Salama/IAIC.