AM Best Revises Outlooks to Positive for Kuwait Reinsurance Company K.S.C.P.
July 18 2024 - 8:45AM
Business Wire
AM Best has revised the outlooks to positive from stable
and affirmed the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Rating of “a-” (Excellent) of Kuwait
Reinsurance Company K.S.C.P. (Kuwait Re) (Kuwait).
These Credit Ratings (ratings) reflect Kuwait Re’s balance sheet
strength, which AM Best assesses as very strong, as well as its
adequate operating performance, neutral business profile and
appropriate enterprise risk management. The ratings factor in no
rating enhancement or drag arising from the company’s majority
ownership by Al Ahleia Insurance Company S.A.K.P. (Al Ahleia).
The positive outlooks reflect a sustained improvement in Kuwait
Re's operating performance, evidenced by a return-on-equity ratio
that has increased year-on-year from 9.3% in 2019 to 14.4% in 2023.
Earnings were underpinned by robust underwriting margins and
substantial development of reserving buffers, which has tempered
technical earnings in recent years due to its prudency. AM Best
expects Kuwait Re’s underwriting discipline and prudent risk
selection to support continued improvements in its operating
metrics.
Kuwait Re’s balance sheet strength is underpinned by its
risk-adjusted capitalisation, which is assessed at the strongest
level, as measured by Best’s Capital Adequacy Ratio (BCAR). The
company’s balance sheet strength is supported by a track record of
internal capital generation, along with prudent reserving practices
and good liquidity to support operations. A partially offsetting
factor is Kuwait Re’s modest holdings of higher-risk assets, with
its real estate and equity portfolio equating to approximately 13%
of total investments at year-end 2023, which exposes its capital
base to potential volatility.
Kuwait Re’s business profile assessment reflects its
diversification by geography and product offering. The company’s
operations span the Middle East, North Africa, Asia-Pacific and
Central and Eastern Europe, where the company provides proportional
and non-proportional cover to its cedants. Kuwait Re generated
insurance revenue of KWD 71.4 million in 2023, equivalent to USD
233.0 million, representing a combined (non-life & life) growth
of 23% compared with 2022, driven in part by favourable reinsurance
market conditions in its core markets.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Katharine Campkin, ACA Financial Analyst +44 20
7397 4383 katharine.campkin@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Ben Diaz-Clegg Associate Director, Analytics
+44 20 7397 0293 ben.diaz-clegg@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com