Factors that could return AFNIC to a stable outlook in the medium term include (i) a material improvement in the operating and/ or sovereign environment of Fujairah; and/or (ii) explicit support from the Government of Fujairah.
Factors that could result in a downgrade include, but are not limited to (i) any perceived or actual decline in the implicit support from the Government of Fujairah for AFNIC or a material deterioration in the operating and/ or sovereign environment of Fujairah; and/ or (ii) a weakened capital position, with gross underwriting leverage increasing to over 2x or loss of major cedents in the reinsurance program; and/or(iii) a significant deterioration in the underwriting performance, with COR above 100 per cent for several years, or significant losses related to the investment portfolio; and/or (iv) a deterioration in the quality and liquidity of the asset portfolio; and/or (v) a significant reduction in market share.
E-mail exchange between the author and AFNIC
personnel, 21 April 2015.
one of only 3 insurers actively operating in Fujairah, AFNIC has a
Moody's notes that AFNIC has reported consistent underwriting profits in
Furthermore, as AFNIC is 80% owned by the Government of Fujairah,
One common theme that emerged from interviewing parents revolved around educators treating parents more positively within the presence of an advocate, particularly an advocate from AFNIC.
Initially, parents were most likely to become members of family support groups similar to AFNIC due to experiencing negative outcomes from school districts which likely influenced the research findings.
The rating upgrade for AFNIC reflects key improvements in its standalone credit metrics including (i) the improved levels of capitalisation, with gross underwriting leverage (GUL) improving to 1.
The Baa1 IFSR also reflects support from the Government of Fujairah, benefiting from the strategic importance of AFNIC to the Emirate of Fujairah given the current ownership level.
However, we still consider asset risk as the predominant credit risk for AFNIC.
According to Moody's, the rating could be upgraded if there is: i) A meaningful improvement in asset risk, for example high risk assets falling below 100 per cent of shareholders' equity (year end 2012: 151 per cent), ii) Financial leverage consistently below 15 per cent (year end 2012: 30 per cent), and/or iii) AFNIC delivers improved levels of capitalisation, for example gross underwriting leverage consistently below 1.