Moody's Ratings (Moody's) has assigned a B1 insurance financial strength rating (IFSR) to Al-Daman Takaful Insurance Company (Al-Daman Takaful). The outlook is 'Stable'.
Based in Kuwait, Al-Daman Takaful is a modest sized property and casualty insurer, predominantly focused on motor third-party liability insurance.
Ratings rationale
The assignment of a ‘B1’ IFSR to Al-Daman Takaful reflects:
(i) its good track record of underwriting and overall profitability with a five-year average return on capital (ROC) of 11.6% at YE2025;
(ii) adequate asset quality with adequate liquidity through good quality bank deposits, albeit with sizeable and concentrated exposures in real estate and equity investments; and
(iii) good levels of capital with buffers comfortably above the regulatory minimum.
These strengths are offset by Al-Daman Takaful's modest size and market position in the Kuwaiti insurance market, which constrains its growth and diversification prospects amid intense competition. Moreover, its business is concentrated predominantly in one line of business, motor third-party liability, which suffered periods of high volatility in the past across the industry.
The insurer's asset quality is held back by concentrated exposure to a small number of real estate investments, which increase asset risk and reduce liquidity. The company has faced frequent strengthening of reserves.
The ‘B1’ rating also incorporates Al-Daman Takaful's environmental, social and governance (ESG) considerations.
Outlook
The ‘Stable’ outlook reflects the credit rating agency's expectation that Al-Daman Takaful will maintain its asset quality, underwriting profitability and adequate capital buffers above regulatory capital requirements.