The financial performance of T'azur Takaful Insurance Company (T'azur) is satisfactory, as reflected in a net income return-on-equity of about 5% in 2025 (19% when adjusted for Qard Hassan), said Fitch Ratings.
The profits were mainly driven by healthy underwriting returns, with a combined ratio of 92% in 2025 (2024: 90%). The company's underwriting profitability in comprehensive motor insurance was sound due to a strategic shift to high-value vehicles and controlled underwriting and pricing discipline. Fitch expects the company's profitability to remain healthy in 2026.
Ratings
Fitch has published T'azur's Insurer Financial Strength (IFS) Rating of 'BB+' and Long-Term Issuer Default Rating (IDR) of 'BB'. The outlooks are ‘Stable’.
T'azur's ratings reflect the insurer's small operating scale within the Kuwaiti insurance market and limited, albeit improving, capital strength, partly offset by sound financial performance, said Fitch.
Aside from financial performance, other key rating drivers for T’azur include:
Small-Sized Takaful Insurer: T'azur is a small Kuwait-based takaful motor insurer with insurance revenue of KWD10m in 2025 ($33m based on the average official exchange rate). T'azur's IFS Rating is one notch below its 'BBB-' implied IFS Rating due to a negative adjustment for its company profile.
T'azur is a retail insurer, and its market share was 1.7% of total sector written premiums in 2024. Fitch views its operating scale metrics as limited. The main source of net premium income is comprehensive motor insurance and, to a lesser extent, medical insurance, which accounted for 65% and 29%, respectively, in 2025. T'azur is focussed on profitable, selective underwriting through minimum premium enforcement and reduced exposure to high-loss low-value segments.
Improving Capital Position: T'azur's Prism Global score improved to 'Adequate' at end-2025 from below 'Somewhat Weak' at end-2024, supported by retained earnings. It has substantial Qard Hassan, an interest-free, benevolent loan in Islamic finance, on its balance sheet that accounted for 42% of the insurer's total assets at end-2025; Fitch excluded the loan from available capital in its capital model due to its expectations of low recoverability. Fitch expects the company's Prism score to remain at least 'Adequate' in 2026, supported by higher retained earnings. T'azur's regulatory solvency ratio, which accounts for Qard Hassan, was 177% at end-2025.
Prudent Investment Strategy: T'azur's investment strategy is prudent. The insurer places cash in deposits with local Islamic financial institutions. This is reflected in a strong liquid asset/net technical reserves ratio of 309% at end-2025 (end-2024: 136%).
Good Quality of Reinsurance Panel: The credit quality of the company's reinsurance panel is good, with the reinsurers mainly from the Middle East and Africa and developing Asia. T'azur makes modest use of reinsurance, as underscored by the reinsurance usage ratio of 12% in 2025 (2024: 11%). The company's reinsurance programme is extensive and incorporates a combination of quota-share and excess-of-loss treaties and facultative placements in the major lines of business.