Kuwait Reinsurance Co (Kuwait Re) will remain resilient to the consequences of the Middle East war, says S&P Global Ratings (S&P).
In a commentary, the global credit rating agency says that the memorandum of understanding between Iran and the US announced on 14 June aligns with S&P Global Ratings' base-case assumption that disruptions in the Strait of Hormuz will begin easing in the second half of 2026.
While the extent of the conflict's consequences is still difficult to assess, S&P says that it currently does not anticipate any significant underwriting losses that would erode Kuwait Re's underwriting performance, given that most of its policies exclude war, and the few war-related exposures left are fully reinsured. The conflict may have long-lasting impacts on growth opportunities and inflate claims, but S&P sees Kuwait Re's high diversification and strong efficiency as a mitigant. Furthermore, the entity's strong capital buffers shield it, in S&P’s view, from any unexpected large loss.
Financial performance
S&P says that Kuwait Re has strengthened its business model over the past few years. The entity has maintained strong growth over the years, supported both by insurance result expansion and investment income, while preserving prudent underwriting practices and investment profile. Net income reached KWD19.9m ($65m) in December 2025, up by 41% versus December 2024 and more than twice its size compared with December 2022. While Kuwait Re remains smaller than its peers, S&P sees its geographical spread across 126 countries, its wide product offering, and its better-than-peers efficiency as key strengths.
Forecast
S&P added, “We forecast growth to moderate over the next two years, but operating performance should remain stronger than that of peers. We expect net income to remain close to 2025 levels in 2026, as the conflict has likely tempered growth on the underwriting side, while investment income growth will be penalized by the rate reduction that took place between September 2024 and December 2025. We anticipate it will then resume to 2%-3% annual growth over 2027-2028, and reach KWD20.4m in 2028. Kuwait Re's net combined ratio has been improving throughout the years, standing at 86.9% in 2025 compared with 93.8% in 2022. We expect it will maintain underwriting discipline and continue to report net combined ratios at 87%-90% over the next two years.
“We expect Kuwait Re to maintain its capital adequacy buffers above the 99.99% confidence level, as per our capital model. Kuwait Re's capitalisation exceeds our 99.99% confidence level benchmark, which is a key rating strength. The reinsurer maintains high buffers above our calculated risk-based capital requirements for this level, and we expect them to further grow over the next two years. That said, total adjusted capital for Kuwait Re remains small in absolute terms, and non-life reserve adjustments—which we see as of lower quality than shareholders' equity—account for about 40% of it. As a result, we consider capital and earnings as very strong.”
Rating outlook revised to ‘Positive’
S&P says that it has revised its outlook on the global scale ratings on Kuwait Re to ‘Positive’ from ‘Stable’. At the same time, it affirms the 'A-' global scale and 'gcAAA' Gulf Cooperation Council regional scale financial strength ratings.
S&P also says that it sees Kuwait Re as highly strategic to the Al-Ahleia group, versus strategically important previously. Kuwait Re is owned 85.2% by Al-Ahleia and its contribution of the group's total gross written premium in 2025 increased to about 66%, while providing income and geographical diversification to Al-Ahleia. S&P said, “Hence, we see it as a key strength in Al-Ahleia's creditworthiness. Our ratings on Kuwait Re are based on its stand-alone credit profile, which is at the same level as our 'A-' rating on Al-Ahleia.”