Abu Dhabi – Mubasher: Standard & Poor's (S&P) Global Ratings announced it has affirmed Al Buhaira National Insurance Co’s (ABNIC) long-term insurer financial strength and issuer credit ratings at 'BB+', with a negative outlook.
“The negative outlook reflects our view of the ongoing risk that ABNIC’s future financial performance will fall short of the recovery plan it has submitted to the regulator,” according to a press release.
The US-based financial services company also predicted ABNIC’s fixed-charge coverage ratio to remain below 4x over the coming three years.
Based on ABNIC’s business plan for the next three years, bank borrowing is likely to fall to AED 231 million by the end of 2021, S&P added.
“We believe the reduction in bank borrowing and retention of future profits will facilitate improvement of ABNIC's liquidity over the next three years,” the rating company said.
S&P also projected ABNIC’s premiums to grow at nearly 10% over 2019-2021, while the net combined ratio is expected to remain below 95% and net income is likely to reach AED 40 million per year on average over the coming three years.
