Moody’s Ratings has upgraded the insurance financial strength rating (IFSR) of Saudi Reinsurance Company (Saudi Re) to A2 from A3, while affirming its A1.sa national scale IFSR. The outlook has been revised to stable from positive.
Saudi Re, based in Saudi Arabia, primarily writes reinsurance business in its domestic market and supplements its operations with business from the wider Middle East, Africa, Asia, and other international markets.
The rating upgrade reflects the strengthening of Saudi Re’s business and financial profiles following the Public Investment Fund’s (PIF) acquisition of a significant minority stake in the company.
Moody’s also cited the Saudi government's implementation of enhanced domestic cession regulations, which Saudi Re is positioned to benefit from as it seeks to grow its market share.
The upgrade further incorporates expectations that Saudi Re will continue to benefit from the expansion and diversification of the Saudi economy and government initiatives aimed at supporting the local insurance sector.
Saudi Re’s gross written premiums rose approximately 48% in 2024 to SAR2.36 billion, driven by stricter enforcement of domestic cession requirements and participation in new government insurance programs.
Moody’s expects Saudi Re’s affiliation with PIF and its strong market position to support continued business growth as local market opportunities expand. Capital adequacy and underwriting discipline are viewed as key factors in maintaining its balance sheet strength despite the company’s rapid growth.
Moody’s said that PIF’s involvement enhances Saudi Re’s business profile and provides access to additional capital for local and international expansion. Regulatory changes that increased mandatory local cessions from 20% in 2023 to 30% by 2025 are expected to continue benefiting Saudi Re’s business and financial position, as it remains the only Saudi professional reinsurer.
Earlier this year, Saudi Arabia’s PIF completed the acquisition of a 23.08% stake in Saudi Re, with the investment aimed at expanding Saudi Re’s domestic capacity to support the country’s growing insurance market and strengthen the broader insurance sector in the kingdom.
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