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Insurer’s Financial Strength

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The objective of an insurance company rating is to provide a reliable third party opinion regarding an insurer’s financial strength and the insurer’s ability to meet contractual obligations. Islamic International Rating Agency “IIRA” is dedicated to serve the insurance marketplace in its targeted markets. IIRA aims to play its role as a source of reliable information and ratings to encourage the growth of a financially strong insurance industry. IIRA believes IIRA’s role is vital in encouraging the prudent management of insurance companies and improving the industry’s strength for the benefit of insurers and policyholders in particular and that of the
financial system in general.

Sources of Information
IIRA’s primary source of information for Insurer Financial Strength ratings is the insurance company’s audited annual and quarterly (if available) financial statements. Our review of a company’s financial statements is supplemented by publicly available documents from central banks, stock exchanges and other government agencies. The prime source of information is the confidential documents provided by the management of the company, such as annual business plans and responses to IIRA’s Rating Questionnaires. While the information obtained from sources is believed to be reliable, IIRA does not audit the company’s financial records or statements and, therefore, cannot attest their accuracy.

Insurer’s Financial Strength (IFS) Rating
IIRA’s IFS rating is an assessment of the insurance company’s financial strength, and its capacity to meet obligations to policyholders and other contract holders. The IFS rating also judges the persistence of financial strength in the future. As a result, our ratings are governed by a set of quantitative and qualitative factors. Firstly, the qualitative assessment is based on an analysis of the insurance company’s country risk and business profile. Secondly, the quantitative assessment is based on an evaluation of the company’s balance sheet strength and operating performance using an array of financial tests on the company’s reported financial
performance.

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