Bahrain Kuwait Insurance Co. BSC outlook to positive following outlook revision on parent

At the same time, Standard & Poor's affirmed its 'BBB' long-term counterparty credit and insurer financial strength ratings on the company.

The ratings reflect BKIC's strategic importance to Gulf Insurance (BBB+/Positive/--), strong capitalization, and strong earnings. These positive factors are offset by BKIC's constrained competitive position and high reliance on reinsurers.

'The positive outlook on BKIC reflects the positive outlook on Gulf Insurance and BKIC's strategic importance to Gulf Insurance,' said Standard & Poor's credit analyst Ali Karakuyu. BKIC is expected to retain its association and working relationship with Gulf Insurance.

Standard & Poor's expects BKIC's capitalization to remain strong, and the combined ratio not to deteriorate beyond 90%. Standard & Poor's also expects BKIC to maintain and defend its competitive position without materially compromising on profitability, or undertaking new initiatives that would significantly increase the risk profile of the company.

The ratings may be raised in response to any upward revision of the ratings of Gulf Insurance. Positive rating action may reflect further strengthening of BKIC's relationship with Gulf Insurance through increased business volume, accompanied by maintained earnings and capital strength.

Negative rating action would result from any deterioration in BKIC's strategic importance to Gulf Insurance. Equally, any deterioration in capitalization, earnings, or competitive position could also put downward pressure on the ratings.