Moody's affirms Gulf Insurance Group at A2, citing sound underwriting and strong capital

Moody's affirmed the A2 insurance financial strength ratings of Gulf Insurance Group (GIG) and its main Kuwaiti subsidiary, GIG Kuwait, and kept stable outlooks on both, Middle East Insurance Review reported on 29 October.

According to the report, the agency pointed to consistently good operating profit driven by underwriting, controlled expenses and steady investment income, and to strong reserves and capital. It said capital stayed resilient under stress, including the liquidity strain after the cancellation and liquidation of AFYA, the health insurance programme for retired citizens.

Moody's said the AFYA cancellation significantly reduced GIG Kuwait's premium volume, although the company remains the largest insurer in Kuwait. Two factors limit the ratings: the group's exposure to MENA countries with more difficult operating conditions, which make up a minority of its business, and financial leverage that is high compared with regional peers. Moody's expects leverage to decrease over time.

The agency expects GIG to continue to support GIG Kuwait, so the two ratings should stay aligned. The report did not give new profit or premium figures.