Cairo – Mubasher: Moody's Investors Service on Thursday has changed its outlook for Egypt's Arab Misr Insurance Group gig (AMIG) to positive from stable, affirming its 'BA3' insurance financial strength rating (IFSR).
The other ratings of the GIG group were not affected by this rating action, Moody’s said in a statement.
The ratings action follows Moody's upgrade of Egypt’s outlook to positive from stable on the B3 bond rating, the statement added.
“GIG Egypt's stand-alone credit profile reflects its top-five position in the Egyptian P&C insurance market and a growing brand, good product diversification of non-life products and very good operating profitability,” the global ratings agency said.
GIG Egypt has maintained solid healthy growth across all client segments with a rate of 40% in fiscal year 2017/2018.
However, GIG Egypt's standalone credit profile, as well as its published BA3 IFSR, are still limited by the meaningful direct exposure to Egypt's sovereign risk in terms of the investment portfolio and the operating risks inherent in the increasingly competitive Egyptian insurance market, the report noted.
The Egypt-based insurance group’s outlook mirrors the macroeconomic progress of the country’s sovereign rating that will help the group maintain growth and obtain strong market position while delivering robust results, Moody’s noted.
On the other hand, the rating could be reiterated with a stable outlook if the North African nation’s B3 government bond rating affirmed is and outlook changed to stable from positive.
The rating may also be affirmed with a stable outlook if GIG Egypt begins losing market share and position and/or if there is a downturn in profitability, the rating agency concluded.
It is worth noting that Cairo-based GIG Egypt is the main P&C Egyptian subsidiary of Gulf Insurance Group.