Fitch affirms Tawuniya's rating at 'A', 'Stable' outlook

Logo of The Company for Cooperative Insurance (Tawuniya)

Fitch Ratings has revised The Company for Cooperative Insurance's (Tawuniya) Outlook to “Positive” from “Stable”, affirming its Insurer Financial Strength (IFS) Rating at “A” (Strong).

Fitch has also affirmed Tawuniya's National IFS Rating at “AAA(sau)”.

The outlook revision reflected Tawuniya's improved financial performance, driven by strong profitable growth and prudent underwriting standards which, if sustained over the next 12 to 24 months, could lead to an upgraded assessment of Tawuniya's financial performance and earnings.

Fitch expects the company's disciplined pricing to mitigate the risks of stiff competition and to support underwriting performance and capital accumulation over the medium term.

Tawuniya's rating continue to reflect its robust company profile, capitalization and reserve adequacy.

According to Fitch, the key drivers behind the rating include improved financial performance, as Tawuniya's net income return on equity (ROE) expanded to 34% (annualised) in H1 2024 (2023: 18%, 2022: 10%), supported by strong underwriting performance and resilient investment income.

Tawuniya's Fitch-calculated non-life combined ratio improved to around 92% in H1 2024 (2023: 96%, 2022: 97%), mainly due to prudent pricing.

Fitch also projects growing business volumes and Tawuniya's ability to maintain robust underwriting discipline despite competition, to help steady “its very strong” financial performance over the medium term.

Fitch's view of Tawuniya's company profile reflects its significant operating scale, leading business franchise within its sector and strong competitive advantages.

Tawuniya is the largest insurer in Saudi Arabia, based on gross written premiums (GWP). It recorded a 29% annual increase in GWP in 2023 to SAR 18.5 billion on considerable growth in motor and medical insurance.