The ongoing geopolitical tensions in the Middle East are expected to have a limited effect on the operating performance of Sukoon Insurance, one of the UAE biggest insurers, according to S&P Global Ratings (S&P).
The global rating agency says that Sukoon's performance should remain resilient. War-related exclusions are generally standard within Sukoon's insurance policies. In addition, for covers that include war, terrorism, and political violence, Sukoon has effective reinsurance protection in place, resulting in minimal or no net exposure for Sukoon.
Ratings affirmed
S&P affirmed its 'A' issuer credit and insurer financial strength ratings on Sukoon and its guaranteed subsidiary, Islamic insurer Sukoon Takaful. The outlook on all the ratings is ‘Stable’.
S&P said that the affirmation reflects its expectation that Sukoon's performance should remain resilient, despite the ongoing geopolitical tensions in the region.
Business
“We believe the conflict is more likely to result in slower revenue growth and some volatility in investment results. Moreover, while the short-term disruptions appear broadly manageable, a lengthier closure of the Strait of Hormuz could cause major supply chain disruptions and increase the cost of spare car parts and other goods. This could particularly affect the motor line of business. Our base case assumes the war's intensity will peak and the Strait of Hormuz's effective closure will ease in the coming weeks, but some disruption is likely to persist for months,” said S&P.
Sukoon continues to drive its diversification plans within the UAE and abroad across various lines of business, including life, pensions, and savings. In 2025, Sukoon launched Go Saver, a product offered for entities operating in the Dubai International Financial Centre, a freezone in the emirate, introducing competition to a service previously provided by a single entity. Sukoon also launched Purple, a unit-linked investment product targeting clients from all income brackets, with a focus on younger generations. It provides customers with a range of global funds to invest in, including Shariah-compliant funds.
S&P expects these initiatives to make a focused, yet strategic contribution to Sukoon's business in the short-to-medium term, laying the foundation for broader diversification. New business generated through Sukoon Takaful and Sukoon's Lloyd's syndicate should further support diversification.
Topline growth and profits
The base-case scenario assumes topline growth of about 5%-10% in 2026, recovering to 10%-15% in 2027-2028.
S&P expects Sukoon's capital adequacy to continue exceeding the 99.99% requirements under our model, with a significant buffer. Under S&P’s base-case scenario, net profits are expected to range from AED450m ($122.5m) to AED550m. S&P has also incorporated dividend payout assumptions at least in line with previous years.
The ‘Stable” outlook indicates that S&P expects Sukoon to maintain operating performance in line with its base-case assumptions, with capital adequacy remaining at the 99.99% confidence level over the next two years.