Gulf Insurance Group (Gulf) [GIG Gulf)] has demonstrated improvement in its underwriting results over the first six months of 2025, due to the company focusing on higher margin products and exiting from poorly performing business, AM Best says. The insurer's combined ratio is expected to return to a good level in the coming years.
Overall, the company has a track record of strong overall profitability, notes AM Best. In 2024, GIG Gulf reported a post-tax profit of BHD17.0m ($45.5m), translating to a return on equity of 10.7%.
Historically, the company’s earnings have been supported through both investment and underwriting returns.
In 2024, investment results bolstered overall profitability, contributing to almost 80% of post-tax profits following lower underwriting returns; this was the result of the Gulf Cooperation Council flood events in 2024, and higher claims experience.
Ratings affirmed
AM Best has affirmed GIG Gulf’s Financial Strength Rating of ‘A‘ (Excellent) and the Long-Term Issuer Credit Rating of ‘a+’ (Excellent). The outlook of these credit ratings is stable.
The ratings reflect GIG Gulf’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also factor in lift from GIG Gulf’s parent company, Kuwait-headquartered Gulf Insurance Group, due to the strategic importance of GIG Gulf to the group.
GIG Gulf’s balance sheet strength assessment reflects its risk-adjusted capitalisation, which was comfortably at the strongest level at year-end 2024, as measured by Best’s Capital Adequacy Ratio. GIG Gulf’s balance sheet benefits from its low reliance on reinsurance, conservative asset allocation and prudent reserving practices. AM Best expects GIG Gulf’s risk-adjusted capitalisation to be maintained at the strongest level.
Business profile
GIG Gulf’s business profile assessment reflects its established position, commanding a Top Five position based on net insurance service revenue within each of its core markets: the United Arab Emirates, Bahrain and Oman. Additionally, the company has a 50% ownership stake in the Saudi insurer, Gulf Insurance Group (GIG Saudi). GIG Gulf’s assessment also reflects its moderate level of diversification by geography and line of business.