Boubyan Takaful Insurance Company enjoys a strong capital position, Fitch Ratings has pointed out.
The international credit rating agency’s assessment of Boubyan Takaful's capitalisation is driven by an unchanged 'Extremely Strong' score on its Prism Global model at end-2024.
The company had a solvency margin of 131%, based on its local regulatory requirements in Kuwait at end-2024 (end-2023: 147%). At end-1H2025, equity increased to KWD19.1m [$62.2m] (end-2024: KWD17.7m; 1H2024: KWD15.8m), supported by strong retained earnings growth. There is no leverage in the capital structure, which supports the strong capitalisation and leverage score of the company.
Fitch has affirmed Boubyan Takaful's Insurer Financial Strength (IFS) Rating at ‘A’ with a ‘Stable’ outlook.
The rating reflects support from Boubyan Bank, the company’s owner. The Kuwait-based insurer’s standalone credit quality reflects its strong capitalisation and profitability, which are offset by its moderate scale in the Kuwaiti insurance market.
Aside from a strong capital position, key rating drivers for Boubyan Takaful include:
Ownership credit positive: Boubyan Takaful’s IFS Rating has a two-notch uplift from its standalone credit quality of ‘bbb+’, reflecting the likelihood of support from Boubyan Bank. This view is underlined by the shared branding and operational integration, alongside the bank’s strong ability to support the insurer.
Medium-sized Kuwaiti insurer: Boubyan Takaful is a medium-sized insurer in the Kuwaiti market, writing KWD27.1m of gross written premiums in 2024 (2023: KWD26.5m). Premium income mainly comprises credit life and medical lines, which together accounted for around 73% of gross premiums in 2024.
On a net basis, the main source of premium income is the medical line, which represented 50% of net premium income in 2024. The company has a high proportion of income from credit life (27%) and motor (12%). For most other lines, large use of reinsurance means net retentions are low.
Strong profitability: Boubyan Takaful had an unchanged Fitch-calculated combined ratio of 87% in 2024. The profitability of the life and medical portfolios helped to offset weaker performance in motor and fire in 2024. At end-1H2025, profitability rose to KWD2.3m (1H2024: KWD1.1m), driven by a strong policyholder result.
Conservative investments: The insurer has a conservative investment mix, although it has some exposure to real estate. Around 43% of invested assets are invested in cash and deposits with banks, while 17% is invested in real estate. The latter comprises two investment properties and two real estate funds. The rest is invested in Islamic leasing funds and one unrated sukuk.
Strong Reinsurance panel: Boubyan Takaful is a major user of reinsurance across all lines of business. The panel of reinsurers includes large globally diversified reinsurers, with a number of programmes led by large globally diversified reinsurance groups. Other reinsurers on the panels are also generally rated at least ‘A-’.