Dubai – Mubasher: S&P Global Ratings announced it has upgraded its insurer financial strength and issuer credit ratings on Islamic Arab Insurance Co (Salama) to 'BBB' from 'BBB-', with a stable outlook.

This rating comes following a review of Salama under S&P’s revised criteria published 1 July 2019, according to a press release.

The stable outlook shows that Salama will carry on improving its operating performance along with maintaining its capital adequacy and liquidity at current levels, S&P added.

The US financial services firm also projected that Salama’s business in the North African insurance markets would ease over the coming two years.

S&P may upgrade the Dubai-based company’s ratings over the coming two years if it maintains improving its investment portfolio’s credit quality for a sustained period by moving away from speculative-grade bonds and deposits, the release noted.

However, the rating agency could consider a downgrade over the coming two years if Salama’s capital adequacy and liquidity deteriorate due to a surge in premiums or technical reserves, or due to underwriting or investment losses.

In May, Salama, listed on the Dubai Financial Statement, revealed it had generated a net profit of AED 18 million for the first quarter of 2019, up 9% from AED 16.5 million in Q1-18.