Oman Re, the sole reinsurer in Oman, has received an upgraded Insurer Financial Strength (IFS) Rating of 'BBB' from 'BBB-' from global credit rating agency Fitch Ratings. The outlook for the rating is 'Stable'.
Fitch said in a commentary, “The upgrade reflects reduced investment and asset risk following the upgrade of the Oman's sovereign rating to 'BBB-' on 8 December 2025. Oman Re's investment and asset risk is strongly correlated with sovereign credit quality.
“The rating also reflects Oman Re's good franchise in its core markets, good capitalisation and earnings, and conservative approach to reserving and reinsurance. These factors are offset by the company's small operating scale compared with other global reinsurers,” Fitch added.
The key rating drivers are:
Reduced Investment Risk: Fitch regards Oman Re's investment and asset risk as strongly tied to the credit quality of the Omani sovereign. Following the upgrade of Oman's sovereign rating in December 2025, Oman Re's risky assets to capital ratio improved to 46% at 31 October 2025 from 72% at end-2024. Fitch considers a portion of a reinsurer's exposure to 'BBB-' sovereign investments as risky assets, and this portion decreased to 50% from 100% as Oman has been upgraded.
Oman Re's investments are bonds instruments and term deposits placed with Omani banks. The exposure to Omani-related investments accounted for 57% of total invested assets at end-2024 (end-2023: 60%; end-2022: 68%). Oman Re has been gradually reducing its exposure to Omani investments, but its ability to rebalance its investment portfolio is limited by local regulation, which requires the company to keep at least 50% of its investments in Oman. Oman Re has also expanded its operations via its Qatar Financial Centre branch and mainly invests new money in assets denominated in foreign currency that are of high credit quality.
Established Franchise, Small Scale: Oman Re has a well-diversified business franchise across core markets in Middle East, Turkiye, central and eastern Europe. It also has exposure to the Commonwealth of Independent States, and countries in Asia and Africa. Its largest market is Turkiye, which contributed 14% of gross written premiums in 2024. Despite this well diversified business mix, Oman Re has a very small operating scale compared with global reinsurers, with gross reinsurance revenue of OMR50m in 2024 (around $130m based on the average exchange rate).
Good Capitalisation; No Leverage: Fitch views Oman Re's capitalisation as supportive of the rating. The reinsurer's Prism Global model score based on end-2024 data was 'Strong' and Fitch expects it to remain at least 'Strong' at end-2025. Oman Re's available capital is high quality and mostly made up of paid-up share capital. Oman Re's local regulatory solvency margin was also sound at 167% at end-2024 (end-2023: 179%). The reinsurer has no debt and does not plan to issue debt, which supports our assessment.
Good Financial Performance: Fitch assesses Oman Re's financial performance as good. In 2024, the company's net profit after tax rose to OMR3.0m from OMR2.6m, supported by strong underwriting and investment results.
Underwriting performance was improving in the past five years, as demonstrated by a steadily improving combined ratio. Based on IFRS 17 statements, the Fitch-calculated combined ratio on a net/gross approach was 94% (2023: 92%), with a small rise caused by UAE flood losses in 2024, a level that Fitch considers as strong. Return on equity is also rising, from 6% in 2020 to 8.9% in 2024. In 1H2025, Oman Re reported a combined ratio of 95.4% and return on equity of 11.4%.
Prudent Reserving: Fitch views Oman Re's reserving practices as prudent and its reserve adequacy as strong. The company has strong actuarial expertise and conservative underwriting policies. The majority of its business is short-tail and reserves have been running off favourably.
Strong Reinsurance Practices: Oman Re's risk-management practices are sophisticated. The reinsurance programme is extensive and covers key business lines. The credit quality of its reinsurance panel is robust as it mostly includes strong reinsurers rated in the 'A' category or above. Fitch views Oman Re's exposure to natural catastrophes as low. The group's net aggregate exceedance probability-based loss was modelled at OMR3.5m in 2024 at a one in-200-year return period, around 10% of total capital.
Responding to the upgrade, Oman Re CEO Romel Tabaja said, “The upgrade of Oman Re’s Insurer Financial Strength Rating to ‘BBB’ by Fitch Ratings represents a significant milestone in our journey and reflects the strength of our financial fundamentals, disciplined underwriting approach and prudent risk management practices. This achievement also mirrors the positive impact of the Sultanate of Oman’s improved sovereign credit profile and the effectiveness of the Government’s sound fiscal and economic policies. We remain committed to sustaining this momentum, strengthening our capital base, and further enhancing Oman Re’s position as a resilient, reliable and forward-looking reinsurance partner.”