HDFC International Life and Re Company Rated B++ in UAE
- HDFC International Life and Re Company Limited received a B++ Financial Strength Rating and a 'bbb' Issuer Credit Rating from AM Best due to its strong financial metrics.
- The company has demonstrated stable operating performance, recording profitable results in four of the past five financial years while expanding into new markets.
- Despite its achievements, HDFC remains susceptible to market volatility due to the limited size of its balance sheet and concentration risk within its reinsurance book.
In the United Arab Emirates, HDFC International Life and Re Company Limited has been assigned a Financial Strength Rating of B++ and a Long-Term Issuer Credit Rating of 'bbb' by AM Best. This assessment reflects the company's strong balance sheet strength along with stable operating performance. Over the past five fiscal years, HDFC has achieved profitable results, demonstrating improvements in underwriting performance, particularly in its medical and group life sectors. Its risk-adjusted capitalisation is considered the strongest level according to Best's Capital Adequacy Ratio, although the size of the company’s balance sheet exposes it to volatility. HDFC's 2024 insurance revenue stood at USD 22 million, indicating its relatively small scale in comparison to global peers. Despite this, the company has shown geographic diversification across Gulf Cooperation Council countries and has begun its operations in Hong Kong and India. However, it faces high concentration risk due to limited diversity among its reinsurance clients. The outlook of the newly assigned ratings is stable, suggesting confidence in HDFC's future performance and operational strategy. The progressive measures taken by management, including improved risk selection and corrective actions, have led to more profitable underwriting results, with combined ratios improving over recent years. The company's strategic focus remains on enhancing its operating efficiencies while maintaining strong financial metrics. Overall, the positive credit ratings provide a robust acknowledgment of HDFC's capability to manage risk effectively while navigating the challenges typical of the (re)insurance sector.