ARIG / Takaful Update

ARIG/Takaful, Exchange: "Standard & Poor's Ratings Services has affirmed its 'BBB' long-term counterparty credit and insurer financial strength ratings on Bahrain-based non-life and life reinsurer Arab Insurance Group (B.S.C.) (ARIG). S&P then withdrew the ratings at the company's request, and it is no longer subject to ongoing surveillance. 'At the time of withdrawal, the rating reflected the company's very strong capitalization despite the 19 percent reduction in shareholders' equity in 2008, and the company's good competitive position,' S&P noted. 'These factors were offset by marginal operating performance despite some improvement in the combined ratio, and execution risk relating to both business lines, and geographic expansion. The outlook at the time of withdrawal was stable and reflected our view that ARIG will maintain surplus capital in excess of the 'AA' (very strong) level in 2009. Also, the company is likely to continue to lag regional and international peers in terms of operating performance. In a related announcement S&P said that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) 'are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54 percent holding, and is also the major service provider.'"

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