A.M. Best has revised the outlooks from stable to negative of Doha Insurance Group Q.P.S.C., reflecting the continued deterioration of its underwriting performance, combined with concerns around its underwriting risk management practices.
At the same time, A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of the firm.
The revised outlook comes as the firm’s technical earnings have continued to decline to below historical averages and that of regional peers. The re/insurer fell to a technical loss in 2018, and while its insurance operations in Qatar still produce solid returns, these have been offset by large losses within the group’s regional property reinsurance business.
As a result of a one-off gain from the sale of real estate, the company did still record a fairly healthy operating profit in 2018 despite the underwriting loss.
The firm has taken steps to improve its situation, and this includes placing its property reinsurance business into run-off during the end of 2018. But despite this, A.M. Best warns that “considerable uncertainty and execution risk” threaten its strategic initiatives.
Gross premiums written also improved in 2018 by 15%, but the ratings agency warns that future growth is expected to be muted as the re/insurer places its property and engineering reinsurance book into run-off.
In recent years, Doha Insurance Group’s premium retention has increased, although A.M. Best states that the firm is still very reliant on the use of reinsurance protection.
