AM Best upgrades Arab Re's rating

AM Best has upgraded the long-term financial strength and credit ratings of Arab Reinsurance Company SAL “Arab Re” (Lebanon). The former rating has been raised from “B -” to “B”, and the latter from “bb -” to “bb”. The outlook remains stable.

AM Best justifies its decision by the strengthening of the company’s balance sheet fundamentals through risk-adjusted capitalization, making it more resilient to stress.

The decision also reflects the company's adequate operating performance, limited business profile and marginal enterprise risk management.

Between 2019 and 2021, the reinsurer's net resultwas impacted by a cumulative 27.5 million USD in impairments related to holdings of Lebanese government bonds and deposits, and a 2.9 million USD loss related to Beirut Port explosion.

Despite these challenges, Arab Re has maintained its profitability over the past five years (2019-2023) as proven by its weighted average return on equity of 3%.