S&P downgrades Kuwait’s Wethaq Takaful

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Ratings agency Standard & Poor's on Wednesday said it has lowered its long-term counterparty credit and insurer financial strength ratings on Kuwait-based Wethaq Takaful Insurance Co. K.S.C. to 'BB' from 'BB+'.At the same time, the ratings were removed from CreditWatch with negative implications, where they were placed on May 27, 2009. The outlook is negative.

"The rating action reflects both the uncertainties regarding the impact of the troubles at parent Investment Dar (Dar) on Wethaq, and Wethaq's weakening financial and business profile," said S&P credit analyst Lotfi Elbarhdadi.

S&P expects Wethaq's competitive position to remain marginal, suffering from stiff competition.

Uncertainties regarding the outcome of troubles at Dar are likely to have a negative impact on Wethaq's business and financial profile, although the agency noted Wethaq's independent balance sheet and regulated insurance company status could minimise this impact.

''We expect Wethaq to maintain at least "good" capital adequacy based on our risk-adjusted capital adequacy criteria. The company should post a 105% to 110% net combined ratio in 2009. Finally, Wethaq should post flat growth in 2009 compared with 2008,'' the agency said in a statement.

The agency added it would lower its rating if the company does not reach the above-mentioned targets in 2009, or if the outcome of its parent's restructuring is more negative than expected.

On the other hand, if Wethaq exceeds the targets and ultimately survives its parent’s troubles, the outlook may be upgraded to stable.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Features & Analysis
Growth spurt for Gulf's e-commerce sector

Growth spurt for Gulf's e-commerce sector

The recent sale of Talabat.com to Germany’s Rocket Internet for...

The Big Debate: Can Gulf governments reduce their dependency on expats?

The Big Debate: Can Gulf governments reduce their dependency on expats?

GCC states have launched many initiatives to reduce the gap between...

19
Focus: How low can the oil price fall?

Focus: How low can the oil price fall?

The startling fall in the oil price has renewed questions about...

Most Discussed
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah
  • 9
    Dubai Int'l T1 is too congested, says Indian airline boss

    The best advantage for T1 is it is in the center of the city. AI go for relocation and then notice only one way flights from India to Maqtoum Aiport will... more

    Monday, 30 March 2015 12:34 PM - abusidra
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah
  • 9
    Dubai Int'l T1 is too congested, says Indian airline boss

    The best advantage for T1 is it is in the center of the city. AI go for relocation and then notice only one way flights from India to Maqtoum Aiport will... more

    Monday, 30 March 2015 12:34 PM - abusidra