AM Best Upgrades Life Insurance Corporation's Credit Rating

AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) of Life Insurance Corporation (International) B.S.C. (c) (LICI), based in Bahrain, to "bb+" (Fair) from "bb" (Fair). The agency has also affirmed the Financial Strength Rating at B (Fair), maintaining a stable outlook for these ratings.

The ratings consider several factors, including LICI’s robust balance sheet, assessed by AM Best as strong, and its adequate operating performance. However, the company has a limited business profile and its enterprise risk management (ERM) is considered weak. A key influence on these ratings is the enhancement resulting from its association with the Republic of India, its ultimate shareholder.

The upgrade in the Long-Term ICR is attributed to the stability in LICI’s risk-adjusted capitalization, which remained at a very strong level through 2025 according to AM Best’s Capital Adequacy Ratio (BCAR). This strength is supported by an increment in capital and surplus, facilitated by conservative investment practices and consistent internal capital generation. AM Best projects that LICI’s BCAR will continue to maintain its robust level.

LICI has demonstrated adequate operating performance, although it experiences some variability, particularly linked to changes in interest rates. From 2023 to 2025, the company reported an average return on equity of 8% under IFRS 17, primarily driven by investment returns. However, underwriting results in 2025 were negatively affected by the provision for future bonuses on participatory products, as required by reporting standards. Despite these challenges, AM Best anticipates the company's operating performance will remain adequate in the medium term.

LICI's market positioning benefits from focusing on the Indian expatriate community in the Gulf Cooperation Council (GCC) region, leveraging its association with the Life Insurance Corporation of India for brand strength and policy portability. Nonetheless, the company’s market presence has contracted in recent years due to a strategic move away from traditional endowment offerings towards unit-linked products. AM Best intends to closely observe how LICI’s management executes its strategic growth initiatives.

The assessment of LICI’s enterprise risk management as weak reflects past inadequacies in capital management and significant restatements under IFRS 17 for 2023. The past approach to risk management was largely reactive, leading to delays in implementing corrective measures. AM Best recognizes improvements made in addressing capital and reporting issues and expects LICI to further refine and bolster its risk management framework and procedures.

For more detailed information on these ratings and related guidelines, AM Best’s website provides comprehensive resources. AM Best is a globally recognized credit rating agency and insurance industry data analytics provider, known for its extensive international reach and expertise.