Fitch Ratings has revised the Outlook on Oman Reinsurance Company’s (OmanRe) insurer financial strength (IFS) rating to Negative from Stable and affirmed the IFS Rating at ‘BBB-’ (Good).
The rating actions are based on Fitch’s current assessment of the impact of the coronavirus pandemic, including its economic impact.
‘The Negative outlook reflects the uncertainty and increased risk for OmanRe’s earnings in 2020 as a result of the pandemic, combined with poor underwriting performance in the second half of 2019. The affirmation reflects OmanRe’s good capitalisation and reserve adequacy. The rating is constrained by the company’s moderately weak business profile,’ Fitch said in a statement on its website.
Fitch believes OmanRe’s financial performance will be impacted from lower investment income as a result of the COVID-19 crisis. ‘We expect limited pressure on OmanRe’s underwriting result due to exposure to business interruption only for physical damages and no exposure to events cancellation.’