Fitch Ratings has said that it expects The Company for Cooperative Insurance (Tawuniya) to maintain its very strong financial performance over the medium term, underpinned by underwriting discipline and its scale. The international credit rating agency also expects improved market pricing to start feeding into earnings in 2026.
Fitch has thus affirmed Tawuniya’s Insurer Financial Strength (IFS) Rating at 'A' (Strong) and National IFS Rating at 'AAA(sau)'. The outlook on the National IFS Rating is ‘Stable’.
Fitch says that the affirmations reflect Tawuniya's leading business franchise in Saudi Arabia, very strong financial performance as well as strong capitalisation and leverage.
However, the global credit rating agency also notes that capital consumption by Tawuniya is expected to outpace capital generation, due to premium growth and business mix changes, and despite very strong profitability achieved by the company. Based on this, Fitch has revised Tawuniya's outlook on Tawuniya's IFS Rating to ‘Stable’ from ‘Positive’.
Key rating drivers
Growth constrains capital strength: Tawuniya's Prism score was at the high end of 'Adequate' at end-2025 (end-2024: 'Adequate') with strong premium growth offsetting retained earnings growth. Fitch expects its Prism score to improve to the low end of the 'Strong' category by end-2026, supported by robust earnings.
Tawuniya’s solvency ratio remained above the 100% regulatory minimum at end-2025, and Fitch believes the company is well-placed to meet the regulatory requirements under the new risk-based capital regime to be implemented from 1 January 2027. Tawuniya has signed SAR550m ($147m) bank borrowings as part of a financing arrangement with Gulf International Bank Saudi Arabia for general corporate purposes. Leverage therefore increased to 9% at end-2025 from zero at end-2024.
Very strong financial performance: Tawuniya's Fitch-calculated net income return on equity (ROE) remained very strong at 22% in 2025 (2024: 25%), driven by strong underwriting performance and resilient investment income. Its Fitch-calculated non-life combined ratio also remained stable at 95% (2024: 94%), supported by prudent pricing. Price competition remained intense in Saudi medical and motor insurance in 2025, although market conditions have begun to ease towards end-2025.
Leading franchise in Saudi Arabia: Fitch's view of Tawuniya's company profile reflects its large operating scale and leading business franchise. It is the largest insurer in Saudi Arabia by gross written premiums (GWP) and recorded an 20% increase in GWP in 2025 to SAR23.8bn, driven by strong performance across all lines of business. Tawuniya's leading competitive positioning is also helped by its 26% state ownership through the General Organisation for Social Insurance, a government-owned entity.
Well-diversified by product line: Fitch regards Tawuniya as a well-diversified insurer by product line compared with its peers in the Saudi Arabian insurance market. This assessment is supported by the company's growing diversification into motor, property and casualty (P&C) and life insurance lines, despite a material concentration in medical insurance, which is in line with the industry's due to its compulsory nature.
Strong reinsurance protection: Tawuniya cedes most risks in P&C to reinsurance counterparties, providing adequate protection against major loss events, while contributing to lower earnings volatility. Fitch views the credit quality of Tawuniya's reinsurance panel as strong and its exposure to catastrophe risk as low.
Fitch expects that counterparty risks for both Tawuniya and the broader insurance market may increase following the government's requirement for insurers to allocate 30% of reinsurance cessions to local reinsurers, granting them the right of first refusal. However, the increase is unlikely to be material as Fitch expects most cessions to be with highly rated global reinsurers.