RIYADH: Moody’s has upgraded the insurance financial strength rating of Saudi Reinsurance Co. to “A2” from “A3” and revised its outlook to stable from positive, a new report showed.
Released by the global credit rating agency, the data indicated that Saudi Re’s A1.sa national scale IFSR has also been affirmed, according to a statement.
The upgrade of Saudi Re’s IFSR signifies the company’s improved business and financial position following the Public Investment Fund’s minority acquisition and the government’s implementation of enhanced reinsurance escrow regulations. Saudi Re is well-equipped to utilize these regulations to bolster its market position and potential for growth within the Kingdom.
The upgrade also aligns with the fact that the company experienced premium growth in 2024, with gross written premiums increasing by approximately 48 percent to SR2.36 billion ($629 million), driven by the strict implementation of existing domestic reinsurance ceding requirements and its participation in new government-mandated insurance initiatives.
The newly released Moody’s statement said: “Furthermore, the rating upgrade reflects our expectation that Saudi Re will continue to benefit from the ongoing growth and diversification of the Saudi economy, along with government initiatives aimed at promoting growth in the local insurance sector.”
“In addition, we believe that the company’s increased capital base, the good diversification of its business, and its central role in supporting the local insurance sector enable it to withstand potential shocks that may arise. We expect the ongoing trade tensions and increased volatility in financial markets to have a limited impact on the company,” it added.
The statement further disclosed that the organization expects the firm’s strong market position, coupled with its affiliation with PIF, to support continued growth in business volumes as market opportunities expand.
It also emphasized that the company’s strong capital adequacy and consistent underwriting discipline support its ability to maintain a solid balance sheet and profitability, even amid rapid growth.
“The stable outlook reflects our expectation that Saudi Re will maintain its underwriting discipline and good profitability, while maintaining strong capital adequacy and asset quality. Factors that could lead to an upgrade or downgrade of the ratings,” the statement said.
Moody’s continued to note that increased ownership by PIF and evidence of explicit support may also contribute to a rating upgrade.
