A.M. Best Affirms Ratings of Oman Insurance Company (PSC)

	FOR IMMEDIATE RELEASE
	OLDWICK, N.J., JUNE 15, 2009 A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Oman Insurance Company (PSC) (OIC) (United Arab Emirates). The outlook for both ratings is stable. The ratings of OIC reflect its adequate level of risk-adjusted capitalisation, excellent underwriting performance and established business profile in the United Arab Emirates (UAE) insurance market. An offsetting factor is the company's volatile investment performance, stemming from a weak investment strategy. In A.M. Best's opinion, OIC's risk-adjusted capitalisation remains supportive of the current ratings, despite deterioration of its fair value of investments reserves, resulting from falling equity prices. A.M. Best expects OIC's capital base to benefit from prospective changes in investment policy, which is anticipated to reduce exposure to the volatile equity markets, with a movement into more secure investments. In A.M. Best's view, further deterioration in the company's capital position is likely to increase downward pressure on the current ratings. Furthermore, OIC has established a leading market position in the UAE with a diversified portfolio for both non-life and life insurance, accounting for 15% of gross market premiums. Moreover, the company has expanded its regional profile by establishing operations in Oman and Qatar during 2008. In A.M. Best's view, OIC has experienced excellent underwriting results across all lines of business, with consistently improving technical profits of approximately AED 220 million (USD 60 million) in 2008, supported by an excellent combined ratio of 75%. Conversely, OIC has a weak investment strategy with significant concentration (in excess of 35% at year-end 2008) of investments in the domestic equity markets. In A.M. Best's opinion, it is vitally important for OIC to address its shortcomings in its investment strategy and adopt a prudent approach to investment risk management in order to create a balanced portfolio. OIC's investment performance has suffered, with low returns below 2% in 2008.