Moody’s affirms Gulf Insurance Group’s A3 IFS Rating
Friday, 10 25 2019, Category: Rating, Country: Kuwait
Moody's Investors Service ("Moody's") has affirmed the A3 insurance financial strength rating (IFSR) of Gulf Insurance Group K.S.C.P. (GIG), the operating holding company of a Kuwait-based group with operations across the Middle East and North Africa (MENA) region. Moody's has also affirmed the A3 IFSR to GIG's main insurance operating company in Kuwait, Gulf Insurance and Reinsurance Company K.S.C. (GIG Kuwait). The outlook on both companies remains stable.
Established in 1962, GIG is a top tier composite insurance group operating in the MENA region with a leading position in its main target markets of Kuwait, Jordan and Bahrain and with a top three position in Egypt. These four countries represent 86% of gross premiums written in 2018 with the rest made up by various operations across the MENA region.
The A3 IFSR for GIG reflects (i) the group's strong and leading position in its target markets, with a relative market share ratio (which measures the group's premiums relative to the average industry premiums) of around 5.3x as well as its well-established brand recognition in the region; (ii) strong and consistent profitability, with a return on capital (ROC) of 10.4% between 2014-2018 driven by a very robust 5-year combined ratio (COR) of 94.7%; (iii) GIG's good capitalisation, with total equity of KD112 million (US$368 million), representing 15% of total assets at YE 2018; (iv) prudent and sophisticated risk management which is critical for the group's continuous expansion in the region.