Societe Tunisienne de Reassurance's (Tunis Re) profitability is expected to remain strong, supported by solid underwriting expertise and robust retrocession arrangements, which help mitigate earnings volatility arising from foreign-exchange movements and adverse international claims experience, says Fitch Ratings.
The global credit rating agency said that the reinsurer’s earnings are strong, as the company reported a strong net combined ratio of 83.7% in 2025 (2024: 95.9%), benefiting from a relatively low level of catastrophe losses. The Fitch-calculated gross loss ratio improved to 35.4% (2024: 66.1%), while the net loss ratio was 44.5% (2024: 59.4%). The Fitch-calculated return on equity (ROE) was 10.1% in 2025 (2024: 8.5%).
Rating affirmed
Fitch has affirmed Tunis Re’s National Insurer Financial Strength (National IFS) Rating at 'AA(tun)'. The outlook is ‘Stable’.
Tunis Re's National IFS Rating is driven by its strong creditworthiness versus its local peers, benefiting from its leading domestic market position and extensive international presence in higher-rated countries than Tunisia.
Aside from strong profitability, key factors driving Tunis Re’s rating include:
Leading Domestic Market Position: Tunis Re is the leading reinsurer in Tunisia, with strong domestic expertise and a sizeable, growing international presence, accounting for 58% of gross written premiums in 2025. Its systemic importance to the Tunisian economy is underpinned by strong relationships with all domestic cedents, the largest of which are also shareholders of the company. Fitch's assessment of the business profile is constrained by Tunis Re's limited operating scale and modest prospects for further expansion into overseas markets in higher-rated countries.
Adequate Capital: Tunis Re scored 'Adequate' under Fitch's Prism Global model in 2025, supported by a large capital base and low net exposure to catastrophe risk, partly offset by high asset risk. The reinsurer's internal risk-based capital model, aligned with Solvency II standards and reviewed by an independent international auditor, indicated a comfortable solvency margin of 152% at end-2025. Fitch expects the company to further strengthen its capitalisation through a planned capital increase of TND100m ($34.4m) in 2026.
High Domestic Asset Risk: Fitch views Tunis Re's investment portfolio as high risk, reflecting significant asset concentration in Tunisia, primarily in monetary instruments and fixed-income securities. Fitch considers Tunis Re's balance sheet to be more exposed to currency risk than its domestic peers, owing to an unhedged currency mismatch between assets and liabilities arising from its growing international business. This risk is partly mitigated through the use of international retrocession programmes.
Effective Retrocession: Tunis Re's retrocession practices are effective and credit-positive. The company has established strong relationships with highly rated international reinsurers. Its entire portfolio benefits from excess-of-loss protection, while exposure to catastrophe risk is largely retroceded.