LONDON--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of “bb+” (Fair) to Compagnie Algérienne des Assurances (CAAT) (Algeria). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect CAAT’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).
CAAT’s strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain comfortably at the strongest level, supported by low net underwriting leverage and good earnings retention. AM Best considers CAAT to have a conservative investment portfolio by asset class, comprised of mainly bonds and cash. However, asset quality is limited with nearly all assets invested domestically, in line with local regulatory requirements, which exposes CAAT to the elevated levels of economic, political and financial system risks prevailing in Algeria. Further partially offsetting factors in the balance sheet strength assessment are the high exposure to credit risk from insureds and CAAT’s important dependence on reinsurance.
CAAT has a track record of strong operating performance underpinned by robust underwriting results and increasing investment income, with profit before tax ranging from DZD 2.9 billion to DZD 3.3 billion (USD...
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