Manama - Islamic International Rating Agency (IIRA) has reaffirmed the Takaful Financial Strength (TFS) rating of The Islamic Insurance Company PLC (IIC or 'the company'), Jordan, at 'A' (Single A). Outlook on the assigned rating is 'Stable'. The fiduciary score has been reassessed in the range of '71-75', reflecting adequate fiduciary standards. The fiduciary score is an aggregation of scores assigned to its two sub-sections i.e. 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% in total industry premiums. 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 percent 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 generates a significant amount of profitable associated business from JIB and its business relations with three other Islamic banks in Jordan are also strong.
Governance practices are adequate keeping in view the size of the organization. Further improvements can be made by benchmarking against larger players operating internationally. For further information on this rating announcement, please contact Mr. Raza Lakhani, CFA at raza.lakhani@iirating.com or email to iira@iirating.com.
Sabeen Saleem, CFA
Chief Executive Officer
© Press Release 2015
