IIRA reaffirms Islamic Insurance Company takaful ratings
MANAMA, November 16, 2015
Islamic International Rating Agency (IIRA) has reaffirmed the Takaful Financial Strength (TFS) rating of The Islamic Insurance Company (IIC), Jordan, at ‘A’ (Single A).
The outlook on the assigned rating is ‘Stable,’ said a statement.
The fiduciary score has been reassessed in the range of ‘71-75’, reflecting adequate fiduciary standards, it said.
It is an aggregation of scores assigned to its two sub-sections, that is, asset manager quality and shari’a governance.
IIC is the first and the oldest takaful operator in Jordan and has a market share of 4.1 per cent in total industry premiums.
The underwriting results have sustained a positive trend, given increasing net contributions and a declining claims ratio.
Moreover, the company’s business mix has improved with sizable growth in life business. Reforms introduced in the regulatory motor TPL pricing policy will further support underwriting performance.
The company’s liquidity and capitalization indicators are also sound. IIC’s business mix however continues to depict concentration, with the region’s adverse macroeconomic and sociopolitical situation posing further challenges to diversify.
While growth in business volumes has been steady at around an annual ten per cent over the past five years, the company has been cautious against larger and riskier corporate exposures.
Alternative delivery channels such as bancassurance may be explored more aggressively, to keep pace with industry growth, without compromising the quality of risk exposures.
With Jordan Islamic Bank, which has a significant retail franchise, as its main sponsor, the company possesses a noteworthy advantage.
The company has generated a significant amount of profitable associated business from JIB and its business relations with three other Islamic banks in Jordan are also strong.
The governance practices are adequate keeping in view the size of the organisation. Further improvements can be made by benchmarking against larger players operating internationally. - TradeArabia News Service
