AM Best Affirms Credit Ratings of Egyptian Takaful Properties and Liabilities Insurance Company (Egyptian Joint Stock Company)

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B- (Fair), the Long-Term Issuer Credit Rating of “bb-” (Fair) and the Egypt National Scale Rating of aa+.EG (Superior) of Egyptian Takaful Properties and Liabilities Insurance Company (Egyptian Joint Stock Company) (Egyptian Takaful) (Egypt). The outlook of these Credit Ratings (ratings) is stable.

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

AM Best assesses the company’s risk-adjusted capitalisation on a combined basis, including its policyholders’ and shareholders’ funds, due to the stated mandate within its articles of association that require the shareholders’ fund to support the policyholders’ fund. Egyptian Takaful’s risk-adjusted capitalisation at year-end 2025 fell to the weak level, as measured by Best’s Capital Adequacy Ratio (BCAR), due primarily to material underwriting losses stemming from its legacy credit insurance portfolio. The balance sheet strength assessment factors in the expected improvement of the company’s BCAR score over the short term. Despite Egyptian Takaful’s conservative investment allocation by asset class, AM Best considers the quality of its assets to be weak given the company’s concentration in Egypt. The company has a relatively high reliance on reinsurance, evident by an insurance revenue retention ratio of 43.4% in 2025. However, the associated counterparty credit risk is mitigated by the use of a financially strong reinsurance panel.

AM Best assesses Egyptian Takaful’s operating performance as adequate. The company has a track record of solid operating performance despite the challenging macroeconomic conditions in Egypt. However, in 2025, the company reported a return-on-equity and net/net combined ratio, as calculated by AM Best, of -36.3% and 183.5%, respectively. The net loss was mainly driven by material underwriting losses within its legacy credit insurance portfolio. These losses are considered to be one-off in nature and performance is expected to return to the historically profitable levels seen before 2025.

The business profile assessment reflects Egyptian Takaful’s position as a mid-tier takaful insurer in Egypt, with a non-life market share of approximately 5%. However, the company’s profile is limited to operating within Egypt and is moderately concentrated in the credit and energy insurance lines, which accounted for 27.9% and 21.0% of gross contract revenue in 2025, respectively.

In recent years, Egyptian Takaful has undertaken steps to formalise its ERM function and promote a risk-aware culture across the organisation. AM Best expects that further improvements in Egyptian Takaful’s ERM framework and practices will support the company as it executes its strategic business plan.

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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