Dubai Islamic Insurance & Reinsurance Co. (Aman) 'BBB' Ratings Assigned; Outlook Stable

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The outlook is stable.

'The ratings reflect Aman's good capitalization, good financial flexibility, and good competitive position,' said Standard & Poor's credit analyst Lotfi Elbarhdadi.

'Offsetting these credit strengths is an aggressive investment strategy and a heavy reliance on reinsurance capacities.'

The stable outlook reflects our expectation that Aman will continue to grow substantially, albeit at a slower pace than in 2007.

It also reflects our expectation of good capitalization and good financial flexibility, as well as stabilized underwriting earnings.

Aman should grow at least 25% in 2008, on a gross and net of reinsurance basis.

'We expect Aman's dividend and capital policy to support its high growth rates and maintain capitalization at least at a good level according to our criteria,' said Mr. Elbarhdadi.

'We expect Aman to maintain a net combined ratio that is lower than 95% in 2008 and 2009, reflecting prudent pricing and underwriting. Finally, Aman should gradually dilute the sector and single-name concentrations of its investments, as the size of its investments grows.'

'We consider the revision of the outlook to positive within the next two years as a remote scenario. We could however revise the outlook to negative if capitalization deteriorates, operating performance decreases, or the company experiences long-term asset write-downs or losses.'