AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Al Dhafra Insurance Company P.S.C. (ADIC) (United Arab Emirates). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect ADIC’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.

ADIC’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), a history of good internal capital generation and strong liquidity. Offsetting factors in the balance sheet strength assessment include ADIC’s investment concentration toward domestic equities and its high reinsurance dependence with a retention ratio below 30% over the last few years. However, management is taking steps to de-risk the investment portfolio. The credit risk associated with this dependence is mitigated partially by the use of a well-diversified reinsurance panel of sound financial strength.

ADIC benefits from a history of positive operating performance with good, albeit somewhat volatile, investment returns, resulting in a return-on-equity that has fluctuated between 5.1% and 9.1% over the last five years (2021-2025), as calculated by AM Best. However, underwriting performance has been challenged since 2023, with the company reporting a combined ratio of more than 100% in 2024 for the first time in the last five years. The company’s recent performance has improved on account of higher ‘other underwriting income,’ which is mainly comprised of fees charged for miscellaneous services and the release of extra premium loadings, with the company reporting a net-net combined ratio, as calculated by AM Best, of 94.9% for the year ended 31 December 2025.

ADIC’s business profile is considered to be in line with a limited assessment. The company is a mid-tier insurer in the UAE, with the insurance revenue of AED 379.0 million (USD 103.2 million) for the year ended 31 December 2025. ADIC reported substantial growth during the first half of 2026, with a gross insurance revenue of AED 682 million (2Q 2025: AED 185 million). The growth has been primarily driven by marine war cover, due to the ongoing conflict in the region, which is fully reinsured. Growth in this line is expected to normalise over the next few years. The company’s underwriting portfolio is concentrated geographically in the highly competitive UAE market. While ADIC benefits from a diversified underwriting portfolio by line of business on a gross basis, its retained portfolio has concentration in the motor and medical lines of business.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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