S&P downgrades Salama

S&P said it lowered the long-term counterparty credit and financial strength rating on Salama/Islamic Arab Insurance Co. (P.S.C.) to BBB- from BBB+.

The outlook is negative.

The downgrades reflect a deterioration of the company’s financial risk profile, asset quality and liquidity as a result of multiple factors, including severe losses seen in 2015 and the forecast for 2016, S&P said.

The company’s capital adequacy further weakened in 2015 after it decided to deconsolidate one of its subsidiaries (Best Re), the agency said.

S&P also said it does not see material improvements in the capital adequacy in 2016.

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