AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Abu Dhabi National Insurance Company P.J.S.C. (ADNIC) (United Arab Emirates) [UAE]. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ADNIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
ADNIC’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level. AM Best expects the company’s risk-adjusted capitalisation to remain comfortably at the strongest level, underpinned by sufficient organic capital generation to support business plans. The company’s balance sheet strength assessment also benefits from its excellent liquidity position and good financial flexibility. An offsetting factor in the balance sheet strength assessment is ADNIC’s high dependence on reinsurance to write large commercial risks; however, the associated credit risk is mitigated partially by the use of a diversified reinsurance panel of sound financial strength.
ADNIC has a track record of strong operating performance, evidenced by return on equity exceeding 12% in all of the last five years (2020-2024). The company’s earnings are driven by robust non-life underwriting profits, the result of good underwriting discipline and investment returns, which contributed to the strong post-tax-profit of AED 419.5 million reported in 2024 (2023: AED 401.2 million). Despite challenging market conditions and exposure to weather related events in the UAE in 2024, ADNIC reported a net-net combined ratio of 94.5% (as calculated by AM Best) (2023: 93.5%).
ADNIC holds a market leading position in the UAE, where it ranks as the second-largest insurance company by insurance revenue, among listed insurers. During 2024, ADNIC expanded its geographical reach through the acquisition of a 51% shareholding of Allianz Saudi Fransi Cooperative Insurance Company (subsequently renamed to Mutakamela Insurance Company), a mid-tier insurer in Saudi Arabia. The acquisition, whilst enhancing geographical diversification, has contributed partly to the company’s 55% growth in reported insurance revenue to AED 7.2 billion (USD 1.9 billion). ADNIC writes a well-diversified portfolio by line of business, although the portfolio is weighted to domestic medical business on a net basis.
