Kuwait-based Gulf Takaful Insurance (GIG Takaful) is expected to see 8%-12% revenue growth per year in the next two years, under a base-case scenario by S&P Global Ratings (S&P).
The global credit rating agency said in a report, “GIG Takaful is an expanding takaful insurer operating in Kuwait with a current market share of about 5%. It is the third-largest takaful insurer in Kuwait, having reported KWD22.3m ($72.2m) in insurance revenue in 2024.
“GIG Takaful generated about 84% of its topline in motor and medical lines in 2024, pointing to a clear concentration even though it writes all lines of property/casualty and life insurance. We expect faster growth in other lines of business over the coming two years, reducing the company's exposure to motor.”
'A-' long-term financial strength rating assigned
S&P has assigned an 'A-' long-term financial strength rating and 'gcAAA' Gulf Cooperation Council regional scale financial strength rating to GIG Takaful. The outlook on the global scale rating is ‘Stable’.
The agency said, “We expect the company to sustain capital adequacy at the 99.95% benchmark over the next two years, allowing it to realise its growth ambitions. This stemmed from a pronounced improvement following a successful capital increase of KWD7m in second-quarter 2025. Our base-case scenario assumes combined ratios will range between 95% and 97%, allowing for net income of KWD0.7m-KWD1.0m per year. We have not factored into our assumptions any dividend outflows, since we understand the group is committed to retaining all profits to support business growth.”
Investment strategy
S&P expects GIG Takaful to maintain its conservative investment strategy over the next two years, preserving its low-risk profile. Since joining the GIG group, GIG Takaful has limited its investments to bank deposits, including the proceeds from the recent capital increase. This significantly reduced its exposure to high-risk assets. S&P does not expect a material increase in asset risk in the near to medium term.
GIG Takaful is also expected to remain a strategically important subsidiary of GIG, reflecting its important role in the group's long-term growth strategy in Kuwait. The group's 79% ownership of GIG Takaful and the insurer's takaful license allow access to retail and commercial lines that would have otherwise been outside of its reach. S&P also views the recent capital increase as a clear indicator of GIG's commitment to its subsidiary. Furthermore, GIG Takaful benefits from support on reinsurance and operational efforts, among other support functions.
S&P added, “The stable outlook captures our expectation that, over the coming two years, GIG Takaful will maintain capital adequacy in line with our 99.95% confidence level. We also expect to continue viewing the insurer as a strategically important subsidiary of GIG.”