LONDON–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Damaan Islamic Insurance Company ‘BEEMA’ Q.P.S.C. (Beema) (Qatar). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Beema’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Beema holds a leading position within its domestic insurance market, as the second largest takaful player by gross written contributions (GWC). The company has good diversification by line of business, offering a range of Sharia-complaint insurance products. In 2022, Beema wrote GWC of QAR 393 million (USD 108.5 million). The business profile assessment is constrained by the company’s geographical concentration and modest scale by international standards.
Beema operates through a hybrid takaful model, whereby the shareholders’ fund charges the policyholders’ fund (PHF) a Wakala fee based on GWC and a Mudarabah fee based on investment income. Beema’s ability to accumulate surpluses within the PHF, whilst regularly distributing surplus back to policyholders, supports the sustainability of its takaful model.
Beema’s balance sheet strength is underpinned by the strongest level of risk-adjusted capitalisation on a consolidated basis, as measured by Best’s Capital Adequacy Ratio (BCAR). Other positive balance sheet factors include the company’s track record of internal capital generation through the retention of earnings. In 2022, Beema reported capital and surplus of QAR 640 million (inclusive of QAR 179 million of accumulated policyholder surplus), a 3.7% increase as compared with year-end 2021. The company introduces operating leverage to the balance sheet through Murabaha financing as part of its investment strategy and to support enhanced returns.
Beema’s operating performance is viewed as strong. The company has consistently reported robust technical performance, with a five-year average (2018-2022) combined ratio of 80.5%. Whilst a small component of overall earnings, investment returns have continued to be positive in each of the last five years. Earnings can be viewed as well balanced between the shareholders’ fund and policyholders’ fund with dividends and policyholder surpluses distributed in each of the last 10 years (2013-2022).
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Contacts
Emily Thompson
Senior Financial Analyst
+44 20 7397 0291
[email protected]
Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159
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Kanika Thukral
Associate Director, Analytics
+44 20 7397 0327
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Al Slavin
Senior Communications Specialist
+1 908 439 2200, ext. 5098
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