Riyadh – Moody’s Investors Service has marinated the ‘A3’ insurance financial strength rating (IFSR) of Walaa Cooperative Insurance Company, with a stable outlook.

The rating reflects Walaa’s solid position as the fifth-largest insurer in Saudi Arabia, according to a press release.

Moody’s highlighted that Walaa’s financial profile is backed by strong asset quality, good capital, and reserve adequacy. The rating agency also underlined the insurer’s good financial flexibility given its low leverage and demonstrated access to capital.

“Going forward, we expect Walaa’s improved underwriting performance and any future capital raise, to support strengthening capital adequacy,” it said.

Regarding the stable rating outlook, the credit ratings provider expects that Walaa will sustain its good capital adequacy by balancing business growth and capital levels whilst maintaining good underwriting profitability.

The listed firm has been growing both organically and inorganically over the past few years with the successful mergers with Metlife AIG ANB Insurance Company in 2020 and SABB Takaful Company in 2022.

Last year, Walaa increased its capital to merge with SABB Takaful in line with the board’s proposal to maintain its solvency margin as it pursues growth in the expanding Saudi insurance market.

The recent results of the first quarter (Q1) of 2023 showed that Walaa improved its underwriting performance with a net income of SAR 24.30 million, versus a net loss of SAR 19.60 million in Q1-22.

As of 31 March 2023, the company turned to net profits after Zakat and tax valued at SAR 26.80 million, against net losses amounting to SAR 15.10 million in the year-ago period.

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