Our ratings on Salama/Islamic Arab Insurance Co. (P.S.C.) (Salama/IAIC) and on its "core" reinsurance subsidiaries, BEST RE (L) Ltd. and BEST RE Family (L) Ltd. (together comprising the BEST RE subgroup) are currently on CreditWatch with negative implications following large losses at BEST RE (L), some of which are being disputed in the courts. Nevertheless, the underlying ratings reflect the group's particularly strong capitalization, strong consolidated competitive position, and strong liquidity and financial flexibility. These are partially offset by the group's operating performance which, although typically good, was hit in 2011 and 2012 by severe losses relating principally to floods in Thailand during 2011 and also to substantial--if contested--"loss of handset" claims in South Korea. We also assess the group's
