AM Best Assigns Credit Ratings to Kuwait International Takaful Insurance Company K.S.C. (closed)

LONDON--(BUSINESS WIRE)--AM Best has assigned the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) to Kuwait International Takaful Insurance Company K.S.C. (closed) (KITI) (Kuwait). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect KITI’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

KITI operates under a Mudaraba model, in which the shareholders’ fund manages the takaful operations and shares in the policyholders’ investment and underwriting results based on a Mudarib share of up to 50%. AM Best assesses the company’s risk-adjusted capitalisation on a combined basis, including its policyholders’ and shareholders’ funds, due to the requirement that the shareholders’ fund has to support the policyholders’ funds if it falls into a deficit.

KITI’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), on a combined policyholder and shareholder funds basis. BCAR scores were comfortably above the minimum required level for the strongest assessment at year-end 2025, underpinned by the company’s conservative investment strategy and good liquidity. BCAR scores are expected by AM Best to remain at the strongest level prospectively. An offsetting balance sheet strength factor is KITI's small capital base by global standards, making it more sensitive to potential volatility.

The adequate operating performance assessment reflects the company’s track record of positive technical results over the medium term, as evidenced by a four-year (2022-2025) weighted average net-net combined ratio of 95%. However, KITI’s technical results have been volatile, impacted by the prevailing competitive conditions in its domestic market. KITI’s portfolio is heavily concentrated toward the tariffed motor third-party liability class of business, which significantly limits management’s ability to ensure rate adequacy. This risk was particularly highlighted in 2025, when the company recorded a spike in its net-net combined ratio to 119%. Over the long run, AM Best expects the company’s operating performance to remain supportive of the adequate assessment. Due to the conservative nature of its investment strategy, KITI’s investment income is expected to be modest and stable.

AM Best views KITI’s business profile as limited, reflecting its position as a niche takaful insurance company, which operates solely in the relatively small and fragmented Kuwaiti market. The company’s portfolio is small by international standards and lacks product diversification, with its business mix mainly dominated by motor third party liability.

AM Best considers KITI’s ERM approach to be largely at an early stage of development and predominantly driven by minimum regulatory requirements in Kuwait. Together with consultants, KITI recently implemented a formalised ERM framework. As the business matures and its risk profile develops, it is expected that KITI’s ERM capabilities will evolve and become embedded within its decision-making process.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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