JEDDAH: Saudi insurance company, Tawuniya has received the distinguished "A" rating and " stable" outlook from Standard and Poor's (S&P) for the fifth consecutive year.
The rating was obtained, according to an October S&P report, due to the insurance company's establishment of a capital management system and introduction of a dividend policy.
"We expect that Tawuniya will restore capital adequacy at a strong level or better and that overall capitalization will gradually improve to a level that is more consistent for the current rating level," the S&P report said.
In referring to the most important factors on which S&P relied on in rating Tawuniya, the report affirmed that the rating reflects the company's leading competitive position in the Saudi market and its strong underwriting performance, pointing out that Tawuniya main areas of underwriting of medical and motor, account for one half of the total Saudi insurance business written.
The insurance company, the report continued, has a strong underwriting net combined ratio of 87 percent to June 2010. Although operating performance is under pressure from local completion and newly licensed players, the S & P said it expects retained earnings from continued strong underwriting performance to support this, along with a gradual improvement in investment returns, reduced levels of concentrations on the company investment portfolio, as well as the recent introduction of a policy which allows dividends to be declared only under satisfaction of a number of criteria will help the company keep is "A" rating.
Ali Al Subaihin, CEO, Tawuniya welcomed the " A" rating and " stable" outlook obtained by Tawuniya, pointing out that the outstanding results achieved by the company during 2009 and Q1 2010 contributed significantly to the rating.
"Tawuniya has made numerous efforts this period to contribute to maintaining its existing customers and to attract new ones. This has led to increased insurance premiums and support of underwriting results," Al- Subaihin said.
Al-Subaihin further stated that the policy of investment diversification and asset allocation applied by the company in coordination with leading international consultants continued its success in 2010 and turned attention of management of portfolio investments from a loss to a profit in the current year. This, Al-Subaihin said has had a positive impact on company results and its overall financial position.
The CEO emphasized that that Tawuniya will continue its efforts to develop its products and services in the presence of the positive local and global economic indicators that forecasts improvements in economic and financial performance.
By SARAH ABDULLAH
© Arab News 2010
