ARABIA Insurance assigned B++ by AM Best

Rating agency AM Best has assigned ARABIA Insurance a financial strength rating of B++, and an issuer credit rating of bbb+. The agency said that both ratings have a stable outlook.

In a statement the rating agency said: “Although AIC’s level of risk-adjusted capitalisation is likely to be eroded marginally as the company grows over the medium term, it is expected to be maintained at a good level.

AIC’s reinsurers are generally of a good credit quality, and net premium leverage (net premiums written to capital and surplus) is unlikely to increase above 125% over the next two years.

“Owing to a reasonably high proportion of equity securities within AIC’s investment portfolio (equity securities are expected to account for almost one third of total investments in 2011), risk-adjusted capitalisation is exposed to potential volatility.”