Founded in 1899, A.M. Best Company is the world s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. A.M. Best CoMpAny World HeAdquArters Ambest Road, Oldwick, NJ 08858 Phone: +1 (908) 439-2200 WAsHInGton office 830 National Press Building 529 14th Street N.W., Washington, DC 20045 Phone: +1 (202) 347-3090 Segment Review Reinsurers Remain Key to Supporting MENA Growth September 2014 A.M. Best AMérICA latina, s.a. de C.V. Paseo de la Reforma 412 Piso 23 Mexico City, Mexico Phone: +52-55-5208-1264 A.M. Best europe rating services ltd. A.M. Best europe InForMAtIon services ltd. 12 Arthur Street, 6th Floor, London, UK EC4R 9AB Phone: +44 (0)20 7626-6264 A.M. Best AsIA-pACIFIC ltd. Unit 4004 Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Phone: +852 2827-3400 A.M. Best MenA, south & CentrAl AsIA Office 102,Tower 2 Currency House, DIFC PO Box 506617, Dubai, UAE Phone: +971 43 752 780 www.ambest.com
BEST S SPECIAL REPORT Our Insight, Your Advantage. Segment Review September 1, 2014 Retentions are increasing at the primary level; however, reinsurance dependence remains high. Presence of Reinsurers Remains Key To Supporting MENA Growth The Middle East and North Africa (MENA) insurance markets have experienced significant growth in recent years, making them attractive to both reinsurance and retakaful companies. Given the low penetration rates and robust profitability experienced by primary insurers, reinsurers view MENA as having significant income-generating potential. Many of these markets, such as the Gulf Cooperation Council (GCC) countries, are perceived to be benign as to catastrophe events, allowing reinsurers to diversify their portfolios and to some extent reduce volatility. Although there are indications that some reinsurers have more recently been seeking to reduce their exposure to the region, plenty of reinsurance capacity remains in the market. Furthermore, the expansion of players operating within the Indian subcontinent, the Asia- Pacific territories and Africa has brought additional capacity to the MENA market. International reinsurers play an important role in MENA s insurance markets, providing capacity and technical expertise to local participants, particularly for high-value risks. Primary insurers dependence on reinsurance support remains high among companies based in the region. Despite a gradual increase in premium retention from primary insurers, the markets are expected to remain dependent on foreign reinsurers in the foreseeable future. MENA insurance markets generated more than USD 35 billion of premiums in 2013, with the main insurance markets being the United Arab Emirates, Saudi Arabia and Turkey. Within the MENA markets, the vast majority of high-value commercial risks such as energy and infrastructure are ceded to the international reinsurance market, with primary insurers either fronting these risks or retaining very little. Despite the region s economic slowdown from 2008 to 2012 (owing to depressed world financial markets), potential growth in commercial risks is expected to remain and continue to create opportunities for reinsurers. Spending on infrastructure has increased over the past year, along with high levels of consumer confidence. This has led to a significant rebound in asset prices, with equity and real estate markets showing signs of improvement. These developments, in addition to the introduction of further mandatory cover, will continue to fuel demand within the insurance sector. Analytical Contact Mahesh Mistry, London +44 20 7397 0325 Mahesh.Mistry@ambest.com Michael Dunckley, London +44 20 7397 0321 Michael.Dunckley@ambest.com Researcher and Writer Richard Hayes Editorial Management David Pilla Most MENA markets are open with limited restrictions on reinsurance; however, there are initiatives to foster growth and retain business within the region. Mandatory cessions are important to the dynamics of markets such as Algeria and Morocco. In these countries, local players are obliged to cede a proportion of their reinsured premiums to the state reinsurers. This bolsters the state s involvement and intention to retain more of the risks within the country, or to support the country in the event of natural catastrophes. Another retention mechanism in place is the establishment of long-standing local and regional reinsurance companies, in addition to reinsurance pools, whereby shareholders or pool members are largely local or regional insurance companies. In these cases, the companies may have vested interests in serving the local market and supporting the regional reinsurance markets. Despite these market dynamics, MENA s insurance markets are still young and depend on international reinsurance support, with local and regional reinsurers generally acting as followers in such markets. While some reinsurers have exited the market, the number of Copyright 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. No part of this report or document may be distributed in any electronic form or by any means, or stored in a database or retrieval system, without the prior written permission of the A.M. Best Company. For additional details, refer to our Terms of Use available at the A.M. Best Company website: www.ambest.com/terms.
new entrants is far greater than those exiting. The proliferation of surplus capital and the desire for diversification have led to excess capacity and increased pressure on pricing. Primary insurers have tended to maintain low premium retentions, relying heavily on ceding risks to the reinsurance market, particularly for commercial risks. This is partly a result of insurers encountering challenges in developing technical expertise, and due to the increased reinsurance commissions available. Insurers have tended to be risk-averse, while reinsurance commissions received tended to cover the majority, if not all, of the commissions that insurers have been required to pay to agents. Despite insurers beginning to retain increasing amounts of business in recent years, the dependence on reinsurance remains high. MENA Market Strategies Vary Strategies adopted by reinsurers to penetrate the MENA markets vary considerably. Five years ago, reinsurers tended to operate from a distance, with the vast majority of commercial risks placed through the London market. However, the dynamics of the landscape have changed materially. The introduction of financial centres such as the Dubai International Financial Centre (DIFC) and Qatar Financial Centre (QFC), alongside strongly regulated offshore centres (e.g. Bahrain under the Central Bank of Bahrain), have helped open the market and encouraged international participants to establish operations in the region. This has been the case in particular for reinsurers and brokers, with most major reinsurance institutions having some form of regional presence. A.M. Best has seen an influx of Lloyd s syndicates establishing a regional presence in 2013 and 2014, including Catlin and Talbot. Moreover, the DIFC continues to draw interest in the Middle East from other markets, such as Africa and Asia. The concept of a regional financial hub has now been replicated in Casablanca, Morocco, where the Casablanca Financial City (CFC) has been established. A number of regional reinsurers have expressed an interest in using the CFC to service the expanding African insurance markets. Proximity to the market is seen as increasingly important to understanding its characteristics, creating closer ties between companies and cedents, and demonstrating a keen willingness to support the market. While some reinsurers have left the market, the number of participants and capacity continue to increase. A growing amount of business is being placed directly within the MENA region, with this trend likely to continue. For reinsurers, risk selection is critical, with risk management practices of clients and cedents being important to the quality of risk underwritten. Increasing Retention Cession rates vary significantly among MENA insurers, although in general the level of business ceded to reinsurers has gradually decreased in the past few years. A.M. Best s analysis of 152 companies based in the GCC countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) shows that in 2002 more than 60% of direct premiums written were ceded to reinsurers. However, in 2013 cession rates for companies in this data set were less than 40% of gross premiums. The reduction in part indicates a change in the market s mix of business, with healthcare becoming mandatory in many jurisdictions and playing an increasingly important role in insurers profiles. The retention on medical remains high, and therefore primary insurers have improved their overall retention. For commercial risks, retention is gradually improving as companies seek to increase expertise and retain larger lines, yet insurers are still largely dependent on reinsurers. The MENA market largely utilises proportional reinsurance, although there has been a gradual shift toward nonproportional cover in recent years. Within the region there is extensive use of bouquet 2
treaties, whereby most non-life lines are placed together under the same treaty to service group multirisk accounts. This makes pricing the treaty for the whole portfolio more critical, factoring in both under- and overperforming lines. In most cases, healthcare is placed separately. Historically, MENA insurers have benefited from reinsurance rates that have been among the lowest in emerging markets. While reinsurance prices have been under pressure in recent years, it is likely that prices are starting to increase in the short term. For rates to materially increase there would need to be a major shock to the reinsurance market. This could be triggered by a major catastrophe in the region, or a series of large losses on high-value risks, such as energy and infrastructure risks. Medical healthcare has historically been written on a proportional basis. However, the level of competition in medical has contributed to underwriting losses among many insurers and reinsurers. The latter may have suffered more in some instances because of the outward commission structures attached to these treaties. As a result, reinsurers are dictating terms more aggressively as they threaten to remove capacity, move from proportional treaties to excess-ofloss cover, reduce commissions or shift to sliding-scale commissions. The dominance of medical in the region makes it important for the markets to have reinsurers continued support. In the medium term, MENA insurers are under pressure to maintain greater focus on technical profitability, given depressed investment returns. There is pressure from reinsurers to increase rates, enforce stricter terms or reduce commission levels, which will further encourage companies to concentrate more on gross rather than net profitability. Furthermore, insurers are taking active steps to improve profitability, with increased retentions as one measure. They are also performing back-testing (sometimes with the assistance of third parties) on their reinsurance utilisation to see the overall benefits of reinsurance coverage, aiming to leverage their positions to negotiate improved terms and conditions. The following measures have been introduced over the past two years, driven by the international market: the introduction of event limits following the windstorms in Oman and floods in Saudi Arabia; reduced cover and capacity for risks co-insured or inward facultative business under the same treaty programme to manage accumulation more appropriately, and; stronger policy wordings following disagreements over the definition of strike, riot or civil commotion (SRCC) insurance that followed the regional political unrest. While these measures may not provide improved rates for reinsurers, they definitely reduce downside risks. Additionally, after the political unrest in the region, reinsurers have been expanding their profiles by providing support to primary insurers to attach riders to policies, such as those that cover political violence and terrorism. Generally these risks are fronted by primary insurers, which would follow the terms and conditions set by the reinsurer or broker. These additional risks tend to be selective based on the location and risk mitigation measures taken by the cedent. Domestic Market Participants There has been an influx of capital entering the reinsurance market from local market participants in the past five years. The substantial growth in the primary market has led to the establishment of five regional reinsurers: Gulf Reinsurance Ltd., Saudi Reinsurance Cooperative Co., Emirates Retakaful Ltd. (formerly Al Fajer Retakaful Co.), Asia Capital Retakaful and Oman 3
Reinsurance Co. Moreover, long-established regional reinsurers continue to generate capital internally or inject capital to increase capacity and service the growing markets. Despite the robust levels of profitability for leading primary insurers, increasing competition and pricing pressures have led such companies to adopt different strategies. Most insurers within MENA hold strong capital positions and are under pressure from investors to utilise capital more efficiently. As such, given the concentrated domestic markets, primary insurers are seeking greater diversification through regional markets, writing inward facultative reinsurance or recipricatory business with other market participants. These strategies must be viewed with caution, as many companies may have limited experience and expertise in writing regional reinsurance business, and such risks must be complemented by adequate risk management practices to ensure accumulations are managed and sufficient reinsurance protection is in place. Exhibit 1 Middle East & North Africa Reinsurance Top Rated Domiciled Writers, 2013 Ranked by gross premiums written. (USD millions) Company Gross Written Premiums Net Written Premiums Technical Result Milli Reasurans Turk Anonim Sirketi $433 $374 -$20 Trust International Ins & Reins Co. B.S.C. (c) Trust Re 389 251 10 Qatar Reinsurance Co. LLC 337 131-19 Societe Centrale de Reassurance 266 185 55 Arab Insurance Group (B.S.C.) 262 246 4 Compagnie Centrale de Reassurance 261 165 32 Kuwait Reinsurance Co. K.S.C.P 144 130 1 Saudi Reinsurance Co. 112 103-35 Arab Reinsurance Co. SAL 86 67-3 Al Fajer Retakaful Insurance Co. K.S.C. (Closed) 67 63 1 Societe Tunisienne de Reassurance 52 26 0 Gulf Reinsurance Ltd. 51 46-10 ACR ReTakaful MEA B.S.C. (c) 22 5 7 Note: Technical result for retakaful operations may include Wakala fees and not the appropriate underlying expense allocation. Premiums are not restricted to MENA region. Source: Best s Statement File Global A minority of ceded premiums from the MENA region are accepted by domestic reinsurers, with international reinsurers providing the bulk of capacity. The 14 reinsurers in Exhibit 1 account for most of the volume in this sector, representing USD 2.6 billion of gross written premiums in 2013 and approximately USD 2 billion on a net basis. This group achieved 5% growth in 2012 and 2013. The profiles of these reinsurers vary considerably, with some concentrating on key MENA markets or niche territories and others seeking further diversification and broadening their reach worldwide. A.M. Best notes that the underwriting performance of domestic domiciled reinsurers is varied, as seen in Exhibits 1 & 2. Those reinsurers that have a strong presence in a single market, such as Société Centrale de Reassurance (SCR) (Morocco) and Compagnie Centrale de Reassurance (CCR) (Algeria), generally benefit from compulsory cessions and have demonstrated a strong track record of profitability. Moreover, those reinsurers that have limited their exposure to select markets, such as the MENA region, have produced solid combined ratios below 100%. Conversely, those reinsurers that have sought greater diversification have been the most affected by worldwide catastrophe losses, as indicated by the high combined ratios in 2011 and 2012 and subsequent reserve strengthening in later years. The exposure of these reinsurers has mainly been through their participation in Lloyd s syndicates and global retrocession programmes. Given that some of the exposures were unlimited and unprotected by retrocession, the cumulative 4
Exhibit 2 Middle East & North Africa Reinsurance Non-Life Underwriting Ratios Loss Ratio (%) Combined Ratio (%) Company Country 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Milli Reasurans Turk Anonim Sirketi Turkey 82 80 104 77 79 111 109 131 108 115 Trust International Ins & Reinsurance Co. B.S.C. (c) Trust Re Bahrain 66 62 69 66 64 86 86 94 95 95 Qatar Reinsurance Co. LLC Qatar N/A 52 101 87 82 N/A 76 122 114 111 Societe Centrale de Reassurance Morocco 64 66 62 50 28 99 97 96 84 67 Arab Insurance Group (B.S.C.) Bahrain 68 68 72 59 63 99 104 109 97 99 Compagnie Centrale de Reassurance Algeria 53 42 44 47 47 83 73 74 78 76 Kuwait Reinsurance Co. K.S.C.P Kuwait 70 75 73 68 70 94 106 101 94 97 Saudi Reinsurance Co. Saudi Arabia 75 70 107 59 113 226 148 142 84 137 Arab Reinsurance Co. SAL Lebanon 78 68 68 65 72 113 101 102 97 105 Societe Tunisienne de Reassurance Tunisia 58 57 64 55 50 95 95 110 100 98 Gulf Reinsurance Ltd. UAE 63 60 54 72 86 99 95 92 104 121 ACR ReTakaful MEA B.S.C. (c) Bahrain 65 59 150 76 28 76 87 191 178 177 Emirates Retakaful Ltd. UAE 87 80 83 59 62 110 108 116 96 98 Notes: A: A.M. Best notes that the combined ratios for Retakaful operators include a Wakala fee in the calculation of combined ratios, which may result in a material distortion of overall performance. B: Ratios are calculated as componants of loss ratio and expense ratio. Loss ratio: claims incurred/net earned premiums Expense ratio: Net operating expenses/net premiums written Source: Best s Statement File Global impact has been greater than their expected tolerances. Consequently, this has highlighted risk management weaknesses within some companies, and an overhaul of their approach to managing and mitigating risk should provide greater stability for the future. A handful of these reinsurers are in their start-up phase and thereby have been affected by high expenses. The change in the operating environment with lower than anticipated growth opportunities has meant many new entrants have not been able to achieve sufficient scale to dilute their expense base. These companies are subject to greater volatility in underwriting performance, as their profile is more susceptible to fluctuations from catastrophes or large losses. A.M. Best notes that the combined ratios for Retakaful operators include a Wakala fee in the calculation of combined ratios, which may result in a material distortion of overall performance. Exhibit 3 compares the return on equity (ROE) performance in the period 2009-2013 of two groups of companies within this sector: Exhibit 3 Middle East & North Africa Reinsurance Return on Equity Established reinsurers vs. new entrants. 25 20 15 New Entrants Established Reinsurers Established companies: Milli Re, Trust International, SCR, ARIG, CCR, Kuwait Re, Arab Re and Tunis Re, and; New entrants: Qatar Re, Saudi Re, Gulf Re, ACR ReTakaful and Emirates Retakaful. The newer companies demonstrate notably weaker performance over the period. The new entrants have smaller profiles and have not yet achieved economies of scale, requiring more underwriting and investment income to cover (%) 10 5 0-5 Source: 5 2009 2010 2011 2012 2013 Best s Statement File Global
fixed expense bases. Additionally, where these companies are experiencing greater pressure to grow and achieve a stronger market profile, they may not be able to underwrite as selectively as more established participants and therefore achieve weaker technical results. Capitalisation is fundamental to A.M. Best s analysis of reinsurance companies. Exhibit 4 examines the effect of the MENA reinsurance sector s operating and financing activities on available capital. New capital is provided to the market each year, with the GCC s class of 2008 (Saudi Re, ACR Retakaful and Al Fajer Retakaful [now Emirates Retakaful Ltd.] and Gulf Re) responsible for approximately USD 750 million of additional capital in that year. A significant proportion of new capital after 2008 is represented by Qatar Insurance Co. supporting with capital injections the international growth of its subsidiary, Qatar Re. Given the modest level of underwriting profitability from 2008 to 2013, technical performance has not contributed significantly to internal capital generation. By contrast, investment income has been the primary driver of overall earnings, with reinsurers taking advantage of marginally higher returns in regional investment markets despite their relatively conservative investment profile. In 2011, total capital and surplus fell (by 9%) due to a combination of underwriting losses and considerable unrealised investment losses. Following the weak performance in 2011, the total dividends paid by the sector decreased considerably in 2012 and 2013, allowing reinsurers to retain profits and continue to strengthen their capital positions. This retention of profits and growth of capital ahead of net premiums allowed the sector to decrease net premium leverage from 78% to 64% between year-end 2011 and year-end 2013. Retakaful Trends Retakaful operators represent an important sector within the MENA reinsurance market. However, as these operators tend to be new entrants, they are finding it difficult to establish themselves. Creating a balance between market franchise and profitability has been a significant challenge to the retakaful sector. Rather than distinguish themselves through targeting new, untapped market segments, retakaful operators tend to compete directly with their conventional counterparts. Given that some existing Exhibit 4 Middle East & North Africa Reinsurance Movement in Capital & Surplus 1100 900 USD Millions 700 500 300 100 % Change in C & S -100-300 2008 2009 2010 2011 2012 2013 40 35 30 25 20 15 10 5 0-5 -10-15 Dividend Investment Income (Realised and Unrealised) Technical Profit/Loss Change in Paid-Up Capital Change in Capital & Surplus Source: Source: AM Best data & research 6
conventional reinsurers benefit from strong reputations and economies of scale, some retakaful operators find it difficult to establish a foothold in the market. Moreover, pressure from shareholders to service capital can lead to the pursuit of premium income through inadequate pricing practices. Many primary companies would like to place business with retakaful companies, but in practice, risk is often ceded to conventional reinsurers as retakaful operators do not possess sufficient capacity to support large and volatile commercial risks or lack the ratings required by the ultimate insureds. Ratings Issues for MENA Reinsurers All A.M. Best-rated reinsurers domiciled in the MENA region have secure Financial Strength Ratings (FSRs). The highest rating achieved at present is an FSR of A (see Exhibit 5). In all but one instance, the outlook for the FSR and Issuer Credit Rating (ICR) is stable. Reinsurers in MENA are generally strongly capitalised, with existing participants reinforcing their capital position and new entrants having surplus capital to support their expanding franchises. Capital requirements are largely driven by underwriting leverage, with most reinsurers adopting conservative and diverse investment profiles and high net retentions that minimise counterparty credit risk. However, recent events in the market have made the operating environment challenging. These include global catastrophe events that have affected underwriting performance for some MENA reinsurers and political unrest that has dampened growth prospects. Combined with this, an increasing number of market participants have created surplus capacity, and elevated competition in the region has placed greater pressure on pricing. Most reinsurers in the MENA countries are now underwriting business outside the region. While the markets continue to expand, reinsurers will find opportunities to grow but need to ensure underwriting is adequately controlled, particularly given the small scale of their operations. MENA insurers operating in countries that have suffered political unrest and economic instability have seen their top lines affected. However, many A.M. Best-rated Middle Eastern reinsurers have shown resilience in their operating performance due to their diversified portfolios and flexible business continuity plans. Reinsurers have felt obliged to support affected markets during the turbulent period, however. After the initial unrest, policy wording Exhibit 5 Middle East & North Africa Reinsurance A.M. Best Rated Companies Ratings as of August 08, 2014. 7 Best's Financial Strength Rating (FSR) Best's Long- Term Issuer Credit Rating (ICR) FSR & ICR Rating Action Rating Effective Date Best's FSR & Domicile Company ICR Outlook Algeria Compagnie Centrale de Reassurance B+ bbb- Stable Affirmed July 10, 2014 Bahrain ACR ReTakaful MEA B.S.C. (c) A- a- Stable Affirmed Dec. 20, 2013 Bahrain Arab Insurance Group (B.S.C.) B++ bbb+ Positive Affirmed Dec. 19, 2013 Bahrain Trust International Insurance & Reinsurance Co. B.S.C. A- a- Stable Affirmed Aug. 22, 2013 (c) Trust Re Kuwait Kuwait Reinsurance Co. K.S.C.P A- a- Stable Affirmed April 25, 2014 Lebanon Arab Reinsurance Co. SAL B+ bbb- Stable Affirmed Dec. 11, 2013 Morocco Societe Centrale de Reassurance B++ bbb Stable Affirmed Aug. 08, 2014 Qatar Qatar Reinsurance Co. LLC A a Stable Affirmed Nov. 20, 2013 Tunisia Societe Tunisienne de Reassurance B+ bbb- Stable Affirmed July 10, 2014 Turkey Milli Reasurans Turk Anonim Sirketi B+ bbb- Negative Affirmed June 13, 2014 United Arab Emirates Emirates Retakaful Ltd. B++ bbb+ Stable First Nov. 15, 2013 United Arab Emirates Gulf Reinsurance Limited A- a- Stable Affirmed May 15, 2014 Source: Best s Statement File Global
has materially tightened in the region, driven by the international reinsurance market s desire to alleviate uncertainty or conflict arising from strike, riot and civil commotion. In relation to the uncertainty of natural catastrophes and the increased frequency of regional catastrophe events, focus has increased on introducing event limits in the region. This should provide further protection to reinsurers in the event of a major adverse loss scenario. These issues over the past few years have highlighted the need for greater transparency in policy wording and conditions offered in MENA markets. Moreover, the reduction of co-insurance has decreased the risk of accumulation and allows reinsurers greater control over their portfolios. MENA markets generally allow reinsurers to diversify into relatively less catastrophe-prone territories. While insurers seek to increase their retention levels, reinsurers will continue to play an important role in the market. As market complexity develops, reinsurers proximity to clients in the region will remain important. Despite the growth opportunities created by the MENA markets, the level of retained premiums and regionally reinsured premiums remain low. Domestic technical expertise and capacity will improve, but the international reinsurance market will continue to play a critical role in the years to come. Published by A.M. Best Company Special Report Chairman & President Arthur Snyder III Executive Vice President Larry G. Mayewski Executive Vice President Paul C. Tinnirello Senior Vice Presidents Douglas A. Collett, Matthew C. Mosher, Rita L. Tedesco, Karen B. Heine A.M. Best Company World Headquarters Ambest Road, Oldwick, NJ 08858 Phone: +1 (908) 439-2200 WASHINGTON OFFICE 830 National Press Building 529 14th Street N.W., Washington, DC 20045 Phone: +1 (202) 347-3090 A.M. Best América latina, S.A. de C.V. Paseo de la Reforma 412 Piso 23 Mexico City, Mexico Phone: +52-55-5208-1264 A.M. Best Europe Rating Services Ltd. A.M. Best Europe Information Services Ltd. 12 Arthur Street, 6th Floor, London, UK EC4R 9AB Phone: +44 (0)20 7626-6264 A.M. Best asia-pacific LTD. Unit 4004 Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Phone: +852 2827-3400 Dubai Office (MENA, SOUTH & CENTRAL ASIA) Office 102, Tower 2 Currency House, DIFC PO Box 506617, Dubai, UAE Phone: +971 43 752 780 A Best s Financial Strength Rating is an independent opinion of an insurer s financial strength and ability to meet its ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company s balance sheet strength, operating performance and business profile. The Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance policy and contract obligations. These ratings are not a warranty of an insurer s current or future ability to meet contractual obligations. The rating is not assigned to specific insurance policies or contracts and does not address any other risk, including, but not limited to, an insurer s claims-payment policies or procedures; the ability of the insurer to dispute or deny claims payment on grounds of misrepresentation or fraud; or any specific liability contractually borne by the policy or contract holder. A Financial Strength Rating is not a recommendation to purchase, hold or terminate any insurance policy, contract or any other financial obligation issued by an insurer, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser. A Best s Debt/Issuer Credit Rating is an opinion regarding the relative future credit risk of an entity, a credit commitment or a debt or debt-like security. 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Founded in 1899, A.M. Best Company is the world s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. A.M. Best CoMpAny World HeAdquArters Ambest Road, Oldwick, NJ 08858 Phone: +1 (908) 439-2200 WAsHInGton office 830 National Press Building 529 14th Street N.W., Washington, DC 20045 Phone: +1 (202) 347-3090 Segment Review Reinsurers Remain Key to Supporting MENA Growth September 2014 A.M. Best AMérICA latina, s.a. de C.V. Paseo de la Reforma 412 Piso 23 Mexico City, Mexico Phone: +52-55-5208-1264 A.M. Best europe rating services ltd. A.M. Best europe InForMAtIon services ltd. 12 Arthur Street, 6th Floor, London, UK EC4R 9AB Phone: +44 (0)20 7626-6264 A.M. Best AsIA-pACIFIC ltd. Unit 4004 Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Phone: +852 2827-3400 A.M. Best MenA, south & CentrAl AsIA Office 102,Tower 2 Currency House, DIFC PO Box 506617, Dubai, UAE Phone: +971 43 752 780 www.ambest.com