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

LONDON--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Kuwait Islamic Takaful Insurance Company K.S.C. (closed) (KIC Takaful) (Kuwait). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect KIC Takaful’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings factor in rating enhancement from KIC Takaful’s ultimate parent, Kuwait Insurance Company S.A.K.P. (KIC), reflecting the company’s strategic importance to KIC.

KIC Takaful 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 an approved 50% Mudarib share. 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’ fund, if it falls into a deficit.

KIC Takaful’s balance sheet strength is underpinned by its consolidated risk-adjusted capitalisation, which is comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects KIC Takaful to maintain healthy capital buffers in excess of the strongest threshold as it continues its strategic growth plans, supported by good internal capital generation and a conservative investment allocation. An offsetting rating factor is the company’s small capital base by international standards, which increases its susceptibility to potential volatility in risk-adjusted capitalisation.

KIC Takaful has a track-record of adequate operating performance, illustrated by positive results in four of the last five years (2021-2025). Since KIC’s acquisition of KIC Takaful in 2023, performance has improved, evidenced by a consolidated return on equity ratio in excess of 15% for both 2024 and 2025. Underwriting performance has been robust in recent years, albeit subject to some volatility, with the company generating net/net combined ratios of 92% over the last two years. AM Best expects KIC Takaful’s investment income to remain a modest but steady contributor toward overall earnings.

KIC Takaful maintains a small but established position in its domestic market of Kuwait, being a top five Takaful insurer. The company operates exclusively in Kuwait, and its portfolio is concentrated to motor business, which accounted for approximately two thirds of total insurance revenue in 2025. AM Best expects the company to continue to leverage its affiliation with KIC to support future growth and diversification.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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