QIC and Antares Re face rating downgrade over profit concerns

Ratings agency  AM Best has downgraded the financial strength rating of  Qatar Insurance Company (QIC), and its subsidiary  Antares Reinsurance Company (Antares Re).

The downgrades reflect a revision in AM Best’s assessment of QIC’s operating performance to “adequate from strong”.

The group’s underwriting results have been unprofitable and volatile in recent years, evidenced by a five-year (2017-2021) weighted average combined ratio of 105% with a standard deviation of 5%.

AM Best believes that despite being generally profitable, the group’s overall results are “no longer supportive of a strong operating performance assessment.”

In 2021, QIC reported gross written premium (GWP) of QAR 12.6 billion ($3.5 billion), an increase of 4% over 2020. Approximately 80% of GWP is derived from Antares Global (previously Qatar Global, rebranded in early 2022), QIC’s international division, which benefits from a geographically diversified multi-platform approach, including a Lloyd’s platform, a Bermuda reinsurer and carriers in Europe. QIC has a leading position in Qatar and a robust foothold in the United Arab Emirates market, though these markets comprise a relatively small proportion of overall group revenue.

QIC’s business mix has been volatile in recent years, with a growing focus on motor insurance which exceeded 50% of consolidated GWP in 2021, AM Best noted. However, the group's recent announcement stating its intention to divest from its Gibraltar-based carriers - which largely underwrite UK motor business - will likely halt this trend and result in a decline of motor premium over the medium-to-long term.

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