AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of Société Nationale d'Assurance (SAA) (Algeria). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has assigned the Algeria National Scale Rating (NSR) of “aaa.DZ” (Exceptional) to SAA. The outlook assigned to the NSR is stable.

The ratings reflect SAA’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management.

SAA’s very strong balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain comfortably above the minimum required for the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by good internal capital generation. The assessment factors in the company’s good levels of liquidity, driven by significant holdings of cash and government bonds (around 65% of total investments), translating into a ratio of liquid assets to total liabilities of 107% at year-end 2024. A partially offsetting rating factor is SAA’s significant exposure to the elevated levels of economic, political and financial system risks associated with Algeria, where the company is domiciled, solely operates and holds over 95% of its investments.

SAA has a track record of adequate operating performance, with a five-year weighted average return on equity of 6.6% (as calculated by AM Best). Earnings have been driven by solid investment income, with a five-year weighted average investment yield (including gains) of 3.1% (as calculated by AM Best). Technical profitability is sound, albeit a more modest contributor to results, with a five-year weighted average combined ratio of 97.5% (as calculated by AM Best), despite high operating expense ratios.

With gross written premium of DZD 33 billion (USD 235 million) in 2024, SAA benefits from a strong leading and sustainable market position in Algeria as the largest direct insurer, with an estimated market share of over 20%. The company has maintained its leader position in the domestic motor segment and has developed strong positions in the commercial risk segments in recent years. SAA’s geographic concentration is considered a partially offsetting rating factor, with all insurance business sourced in Algeria.

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