Standard & Poor’s Ratings Services placed its ‘BBB-‘ long-term counterparty credit and insurer financial strength ratings on United Arab Emirates (UAE)-based Noor Takaful Family PJSC (NTF) and Noor Takaful General PJSC (NTG) on CreditWatch with negative implications.
The CreditWatch placements reflect our view of material underperformance by NTG in 2011. “We see this in poor loss ratios from its core motor account, and a subsequent decline in transaction volumes, which have exacerbated underwriting expenses. Owing to the resulting net deficit, NTG’s capital base has deteriorated materially in 2011 and is now below the notional regulatory minimum,” S&P, said.
Standard & Poor’s expects to resolve the CreditWatch placements in early January, once we have reassessed the capital strength and liquidity at NTG. If it is not restored to a level that supports the current rating, and if it is not sufficient to support the company’s planned and actual trading until it reaches a break-even level, then we may lower the ratings on NTF and NTG by up to two notches.