Kuwait-based Al Ahleia Insurance Company (Al Ahleia) has a track record of strong operating performance, posting improving pre-tax profits over the past five years, says AM Best. The insurer's pre-tax profits reached KWD25.9m ($84.1m) in 2024, equivalent to a return on equity of 15.4%.
Profitability has been underpinned by good underwriting results, with Al Ahleia achieving a consolidated net-net combined ratio of 89.3% in 2024, as calculated by AM Best.
This reflects strong performance arising from the company’s direct operations in Kuwait and the improving results reported by its largest subsidiary, Kuwait Reinsurance Company (Kuwait Re), says the global credit rating agency.
Ratings upgraded
AM Best has upgraded Al Ahleia’s Financial Strength Rating to ‘A’ (Excellent) from ‘A-’ (Excellent) and the Long-Term Issuer Credit Rating to ‘a’ (Excellent) from ‘a-’ (Excellent). The outlook of these credit ratings has been revised to ‘Stable’ from ‘Positive’.
The ratings reflect Al Ahleia’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.
The rating upgrades reflect recent improvements in Al Ahleia’s consolidated balance sheet strength fundamentals. Notably, the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), has increased, underpinned by robust organic capital generation and the development of significant reserving buffers. Moreover, Al Ahleia’s exposure to higher-risk assets has been reducing steadily, with the company reinvesting in cash and fixed income instruments. At year-end 2024, holdings of equities and real estate comprised 25% of total investments, down from almost 40% in 2020.
Business profile
Al Ahleia’s business profile reflects its established position as a top-tier insurer in Kuwait’s insurance market. The group achieves geographical diversification through its reinsurance operation, Kuwait Re. On a consolidated basis, Al Ahleia generated consolidated insurance revenue of KWD132.1m in 2024, an increase of 9% against the prior year.