The operating performance of UAE-based Abu Dhabi National Insurance Co (ADNIC) is expected to remain resilient, according to S&P Global Ratings (S&P).
S&P’s base-case scenario assumes post-tax profits in the next two years of AED500-600m ($136-163m) per year, of which ADNIC will pay a proportion in dividends to its shareholders. ADNIC reported net profits after tax of AED480m and AED419m for the 2025 and 2024 financial years, respectively.
ADNIC's standard insurance policies typically have war and war-like exclusions, protecting it from potential claims arising from the developments. Moreover, for policyholders purchasing policies covering war, political violence, and sabotage and terrorism, ADNIC provides such coverage on a special reinsurance arrangement basis, with minimal or no net retention on its books, S&P said in a report.
The global credit rating agency added, “We therefore consider that the war is more likely to translate into lower revenue growth and some volatility in investment results. In addition, while short-term disruptions appear broadly manageable, a lengthier closure of the Strait of Hormuz could cause major supply chain disruptions and increase the cost of spare car parts and other goods. This could particularly affect the motor line of business. Our base case assumes the war's intensity will peak and the Strait of Hormuz's effective closure will ease in the coming weeks, but some disruption is likely to persist for months.”
Revenue
S&P’s base-case scenario assumes revenue growth of about 5%-10% in 2026, improving to 10%-15% in 2027-2028. ADNIC's core business (consumer and commercial lines), as well as its international operations, should support this. These include ADNIC's Saudi subsidiary, Mutakamela Insurance Co (not rated), inward reinsurance business, and planned expansion through a new branch in India's Gujarat International Finance Tec-City (GIFT City).
Ratings affirmed
S&P also expects ADNIC's capital adequacy to significantly exceed the requirements at the 99.99% benchmark over the next two years, as measured using its risk-based model.
S&P affirms its 'A' long-term issuer credit and insurer financial strength ratings on ADNIC. The outlook is ‘Stable’, indicating that, over the next two years, S&P expects the insurer’s capital adequacy to remain in line with its 99.99% benchmark, supported by prospective earnings from both underwriting and investment activities.