AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of 'a+' (Excellent) of Orient Insurance PJSC (Orient) (United Arab Emirates) and its subsidiaries, Orient Takaful Insurance Company (S.A.E.) (Orient Takaful) (Egypt) and Orient Takaful PJSC (United Arab Emirates).

The outlook of these Credit Ratings (ratings) is stable. These companies collectively are referred to as Orient or the group.

The ratings reflect Orient's balance sheet strength, which AM Best assesses as very strong, as well as its very strong operating performance, neutral business profile and appropriate enterprise risk management.

Orient's balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The group's balance sheet strength is supported by its prudent reserving practices and strong liquidity position. The majority of capital consumption arises from the group's investment portfolio, which includes a material strategic equity holding that accounted for approximately 17% of total invested assets at year-end 2021. The investment continues to create some volatility in Orient's capital and surplus, owing to fair value movements. However, Orient's capital buffers to date have been sufficient to absorb these fluctuations. In 2021, Orient continued to diversify its investment portfolio by asset class with a further increase in fixed-income securities.

The group has a track record of consistently outperforming its peers in terms of underwriting and overall profitability, which has been largely free of material fluctuations despite severe competition in the UAE market. Orient continues to demonstrate very strong operating performance, as evidenced by its excellent five-year (2017-2021) weighted average combined ratio and return on equity of 78.9% and 13.9% (as calculated by AM Best), respectively. In 2021, Orient reported a technical profit of AED 276.9 million, equating to a combined ratio of 80.7%. AM Best expects that Orient's prudent approach to risk selection and focus on profitability over top-line growth will sustain its very strong technical performance.

Orient's solid business profile in the UAE, derived from its strong brand and control over its distribution network, assisted the group in maintaining a leading market position. Orient's business profile continues to benefit from its multichannel distribution network and affiliation with the Al-Futtaim group. AM Best expects Orient to increase its penetration in the UAE's life insurance and non-life retail segments and continue to develop its regional presence in line with the Al-Futtaim group's expansion where feasible. AM Best expects the group also to benefit from access to the takaful insurance markets in the UAE and Egypt through its takaful subsidiaries.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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