AM Best Affirms Credit Ratings of Misr Life Insurance Company

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Misr Life Insurance Company (MLIC) (Egypt). The outlook of these Credit Ratings (ratings) is stable. MLIC is the life insurance subsidiary of Misr Insurance Holding Company (MIHC).

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

MLIC’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s risk-adjusted capitalisation is supported by a considerable amount of soft capital, including discretionary bonus reserves and unrealised gains on real estate assets. AM Best expects MLIC’s BCAR scores to remain comfortably above the minimum level required for the strongest assessment, supported by its good internal capital generation. Despite the company’s relatively conservative investment allocation by asset class, AM Best considers the quality of MLIC’s assets to be weak given their concentration in Egypt. The balance sheet strength assessment also factors in Egypt’s high economic risk and political risks, and very high financial system risk.

MLIC has a track record of strong operating performance, as demonstrated by a five-year (2018-2022) weighted average return-on-equity (ROE) of 17.2%. Overall performance has been consistently strong in recent years, and MLIC reported an ROE of 18.7% for the year-ended 30 June 2022 (fiscal-year 2022). The company’s underwriting performance continues to contribute positively to its overall profitability. AM Best expects that the successful execution of the company’s strategic growth plan will help it maintain strong operating performance.

MLIC has an excellent position in its domestic market. The company’s gross written premium increased by 18.8% during fiscal-year 2022 to EGP 9.2 billion (USD 491.5 million). This further supported the company’s market-leading position in Egypt’s life insurance sector, where it has a market share of approximately 30%. Management continues to pursue a number of strategic initiatives to enhance its business profile, including expanding its base of domestic bancassurance agreements and further developing its direct sales force.

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.

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