A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of ?bbb+? of Qatar General Insurance and Reinsurance Company (S.A.Q.) (QGIR) (Qatar).

The positive outlook reflects QGIR?s continued resilient operating performance, improving business profile and strong capital position during challenging economic conditions. Additionally, QGIR has made progress developing its risk management framework. An offsetting factor is QGIR?s concentration of investments in equities and real estate assets.

In A.M. Best?s opinion, QGIR?s prospective capital position is expected to remain strong, supported by solid retained earnings and benefitting from significant market values of real estate relative book values. In A.M. Best?s view, QGIR?s risk-adjusted capitalisation can absorb fluctuations in equity and real estate values, for which QGIR has a concentration of investments in these assets. Additionally, QGIR has made progress in developing its enterprise risk management framework, which requires further embedding over the next two years.

A.M. Best expects QGIR to maintain its strong position in the Qatari market, where it has approximately 28% market share, despite increased competition following the opening up of the local market to broker and foreign insurance companies. In A.M. Best?s view, QGIR?s business profile continues to improve mainly through expansion of personal lines, further supported by the takaful subsidiary providing additional diversification.

In A.M. Best?s opinion, QGIR is expected to maintain a very good financial performance in 2009, with pre tax profits anticipated to be approximately QAR 120 million (USD 33 million) and combined ratio to remain below 85% over the next two years. Furthermore, A.M. Best expects QGIR to improve its investment strategy to deliver more consistent returns on investments.