Sukoon's strong market position reflects its status as the UAE's fourth-largest insurer and one of the largest insurers in the MENA region, notes Moody's Ratings (Moody's).
The insurer benefits from a diversified business and distribution profile, which reduces its susceptibility to disruption of product lines or distribution. Sustained investment in customer service capabilities provides a competitive advantage, particularly in the UAE's highly competitive medical and consumer insurance segments, Moody's added.
In a report released yesterday, Moody's affirmed Sukoon’s ‘A2' insurance financial strength rating (IFSR). The outlook remains stable. Based in the UAE, Sukoon is a leading insurer in the MENA region, with strong positions in medical, life, commercial and consumer insurance markets.
Ratings rationale
Moody’s said that the affirmation of Sukoon's ‘A2’ IFSR reflects the insurer’s:
(i) strong market position and franchise in the MENA region and its well diversified business profile across product and distribution;
(ii) strong asset quality resulting from high quality reinsurance support and high quality, liquid investment portfolio with only moderate exposure to higher risk assets;
(iii) strong capital adequacy that is resilient to stress;
(iv) strong profitability, driven by good underwriting profitability, well-controlled expenses and steady investment income; and
(v) good reserve adequacy and moderate reserve risk supported by its good technical expertise and risk management capabilities.
These strengths are partially offset by:
(i) Sukoon's concentrated exposure to the UAE, an intensely price competitive market;
(ii) reliance on reinsurance, particularly on large commercial risks; and
(iii) the potential for increased volatility in underwriting profitability arising from its expansion into commercial insurance outside of the UAE through its inward reinsurance programmes.
The rating action also reflects the expectation by Moody’s that Sukoon's ‘A2’ IFSR will remain supported by its strong capital, liquidity buffers and risk management, positioning it well to withstand financial pressures from the Middle East conflict.
International
Sukoon is also a leading commercial insurer in the region, supported by strong underwriting expertise and established relationships with international reinsurers. Growth in its commercial insurance and international inward reinsurance businesses is enhancing its diversification and reducing its exposure to the cyclical UAE consumer insurance market. However, increased participation in international commercial insurance may introduce greater underwriting volatility, which Sukoon mitigates through reinsurance protection and prudent risk limits.
Capital
Sukoon's capital adequacy is strong, reflected in its very strong coverage of regulatory capital requirements and gross underwriting leverage of 3.2x at YE 2025. Capital adequacy is supported by Sukoon's strong risk management capabilities and significant excess of loss reinsurance from high quality reinsurers, that provides balance sheet protection.
Strong and stable profitability support good organic growth of capital and provide good operating flexibility. Sukoon's five-year average return on capital (ROC) was 9.8% as of YE 2025, supported by good underwriting profitability, expense discipline and steady investment income. The insurer's five year average combined ratio (COR) was 93.8% over that period.
Outlook
Moody’s said, “The stable outlook reflects our expectation that Sukoon will maintain good underwriting discipline and profitability despite expected growth in its premiums, while at the same time retaining strong capital adequacy and liquidity buffers.”