AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Damaan Islamic Insurance Company ‘BEEMA’ Q.P.S.C. (Beema) (Qatar). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Beema’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Beema is a takaful insurer and operates through a hybrid model, whereby the shareholders’ fund charges the policyholders’ fund (PHF) a Wakala fee based on gross written contributions (GWC) and a Mudarabah fee based on investment income.

Beema’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best assesses the company’s risk-adjusted capitalisation on a combined basis, including its policyholders’ and shareholders’ funds, due to the strength of domestic regulation and requirement that the shareholders’ fund would have to support the PHF. Other positive balance sheet strength factors include the company’s track record of internal capital generation through the retention of earnings and Beema’s ability to accumulate surpluses within the PHF whilst regularly distributing surplus back to policyholders. At year-end 2023, Beema reported capital and surplus of QAR 715.6 million (inclusive of QAR 210.6 million of accumulated policyholder surplus), an 11.8% increase as compared with year-end 2022.

AM Best views Beema’s operating performance as strong. The company has consistently reported robust technical performance, with a five-year (2019-2023) weighted average combined ratio of 79.7%, as calculated by AM Best. Whilst a small component of overall earnings, investment returns have continued to be positive in each of the past five years. Earnings are well balanced between shareholders’ and policyholders’ with both funds achieving consistent growth over the past 10 years.

Beema holds a leading position within its domestic insurance market, as the second largest takaful player by GWC. The company has good diversification by line of business, offering a range of Sharia-compliant insurance products. In 2023, Beema wrote GWC of QAR 401.3 million (USD 110.9 million). The business profile assessment is constrained by the company’s geographic concentration and limited competitive position in Qatar’s insurance market.

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