AM Best Affirms Credit Ratings of Alliance Insurance (PSC)

·3-min read

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of Alliance Insurance (PSC) (Alliance) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Alliance’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Alliance’s risk-adjusted capitalisation is at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). Over the medium term, BCAR scores are expected to remain comfortably above the threshold required for the strongest BCAR assessment, supported by the company's low underwriting leverage and conservative asset allocation. An offsetting factor is the company's modest reliance on reinsurance for non-life insurance risks; however, the associated credit risk is partially mitigated by the use of a panel of financially strong reinsurers. The ratings also consider AM Best’s country risk assessment of low economic and financial system risk and moderate political risk in the UAE.

Alliance has a track record of strong operating performance, as evidenced by a five-year (2015-2019) weighted average return on equity (ROE) and return on gross written premium of 9.9% and 15.7%, respectively. Underwriting results remain strong and are driven by the life insurance portfolio, with life results accounting for over 80% of the 2019 total combined technical result. Over the cycle, the company has demonstrated solid non-life underwriting performance, posting a five-year (2015-2019) weighted average combined ratio of 71.9%. Non-life underwriting results deteriorated in 2019, generating a combined ratio of 89.6%, impacted primarily by an increase in the expense ratio. Although the combined ratio at first-half 2020 stood at 87.0%, AM Best expects underwriting metrics to revert in line with historical averages over the medium term.

Alliance’s business profile as a midtier domestic market participant is unlikely to change over the near term, as the company focuses on underwriting profitability in an increasingly competitive market. Whilst Alliance has been successful in its current strategy to deliver strong financial metrics, the company will be challenged to broaden its distribution platforms to find profitable growth opportunities.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data provider specialising in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Ben Diaz-Clegg
Financial Analyst
+44 20 7397 0293

Christopher Sharkey
Manager, Public Relations
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Alex Rafferty, ACA
Associate Director, Analytics
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Jim Peavy
Director, Communications
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