Kuwait Insurance Company (KIC) has a track record of strong operating performance, demonstrated by a return-on-equity ratio of 7.5% in 2024, with earnings supported by robust underwriting results from non-life and life portfolios over the past five years, says AM Best.
In 2024, KIC generated a non-life net-net combined ratio of 89.5% (as calculated by AM Best). Results have been complemented by good, albeit volatile investment performance, with an adjusted return on assets ranging from 4.8% to 9.3% between 2020 and 2024. In 2024, KIC reported pre-tax profits of KWD11.8m ($38.6m) compared to KWD12.3m in 2023, a result aligned with its historical earnings trend.
Ratings affirmed
AM Best has affirmed KIC’s Financial Strength Rating of ‘A-’ (Excellent) and Long-Term Issuer Credit Rating of ’a-’ (Excellent). The outlook of these credit ratings is ‘Stable’.
The ratings reflect KIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Balance sheet strength
KIC’s balance sheet strength is underpinned by its risk-adjusted capitalisation assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment is supported further by KIC’s consistent internal capital generation through retained earnings and prudent reserving practices. A partially offsetting rating factor is the elevated counterparty credit risk stemming from KIC’s low underwriting retention, although this is mitigated partially by the use of a reinsurance panel of sound financial strength. Additionally, the company has concentrated exposures to higher-risk equity holdings, which has the potential to introduce volatility to its capital position.
Business profile
KIC holds a well-established position within its domestic insurance market of Kuwait, from which it sources all its premiums. The company generated insurance service revenue of KWD69.5m in 2024, up from KWD53.8m in 2023.
Although KIC’s profile is concentrated geographically in Kuwait, it benefits from good product diversification, offering a comprehensive range of non-life and life products.
Takaful
In 2023, KIC expanded in the takaful segment, following the acquisition of National Takaful Insurance Company, renamed Kuwait Islamic Takaful Insurance Company. The integration of the takaful business supports product diversification and forms part of KIC’s broader business plan to grow across all segments in its domestic market.