Standard & Poor’s Ratings Services affirmed its long-term counterparty credit and insurer financial strength ratings on Bahrain-based Bahrain Kuwait Insurance Co. BSC (BKIC) at ‘BBB’. The outlook remained negative. S&P said that it withdrew the ratings at the issuer’s request.
At the time of withdrawal, the ratings on BKIC reflected our view of the company’s strong operating performance, strong capitalization, and its strategic importance to its parent, Gulf Insurance Co.
The ratings remained constrained because BKIC’s business and financial profiles are both significantly exposed to the Bahraini market and the credit quality of the Kingdom of Bahrain (BBB/Negative/A-3). About two-thirds of the company’s business stems from Bahrain and it holds half of its invested assets (including 42% of its cash) in the country. S&P added that it therefore view its exposure to Bahrain as material.
“The credit quality of the Bahraini market is influenced by the sovereign’s credit quality. In early 2011, political instability and unrest in Bahrain prompted a downgrade of the sovereign rating, which in turn increases our view of economic and industry risk,” it added.
“The negative outlook at the time of the withdrawal reflected the negative outlook on the sovereign.”