AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of GIG Insurance - Egypt S.A.E. (GIG-Egypt) (Egypt). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect GIG-Egypt’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating lift from GIG-Egypt’s parent company, Gulf Insurance Group K.S.C.P. (GIG), reflecting the strategic importance of GIG-Egypt to GIG.

GIG-Egypt’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by internal capital generation. Although the company's investment portfolio is of good liquidity, asset risk is relatively high as assets are concentrated in Egypt, thereby exposing the balance sheet to the country’s high economic and political risk and very high financial system risk. Domestic regulatory restrictions limit the investment opportunities available to GIG-Egypt; however, the company’s capital position is sufficiently robust to absorb the higher risk charges associated with assets held locally. The company relies heavily on reinsurance; however, credit risk is mitigated by the use of a reinsurance panel of generally excellent credit quality.

GIG-Egypt has a record of generating strong earnings despite the challenging operating conditions and high inflationary environment of Egypt. GIG-Egypt generated a five-year (2020-2024) weighted average return on equity of 31.9%, which was above the average inflation rate for the same period. The company’s five-year (2020 – 2024) weighted average combined ratio of 83.8% is evidence of its disciplined underwriting. Robust underwriting profitability is expected to continue prospectively.

GIG-Egypt holds a good competitive position in its domestic market as the third-largest non-life insurer, as measured by gross written premium. Nevertheless, the company’s profile is limited to its domestic market and is concentrated heavily toward the motor business line on a net premium basis. GIG-Egypt is operationally integrated within the broader GIG group, which provides support in areas such as reinsurance purchasing, risk management, pricing, reserving and investment management. In addition, the company benefits from an affiliate guarantee agreement, which shows the level of explicit support that GIG-Egypt receives from its parent.

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