Moody’s downgrades Al-Etihad Insurance IFSR to ‘Baa2’, places under review

Moody’s downgrade reflects a sharp decline in capital base following 2025 losses

Moody’s downgraded the Insurance Financial Strength Rating (IFSR) of Al-Etihad Cooperative Insurance Co. from “A3” to “Baa2”, placing it under review for a potential further downgrade, according to a Tadawul statement.

The insurer said the downgrade underscores a material deterioration in its financial position following losses incurred in 2025.

Total shareholders’ equity declined by 36.8% to SAR 449.6 million at the end of 2025, compared to SAR 711.7 million at the end of 2024. The company also reported a combined ratio of 123% for 2025.

Moody’s noted that the review reflects the challenges facing the company in improving underwriting performance and rebuilding capital buffers. The review process will focus on the adequacy of management actions to enhance underwriting performance, as well as the steps taken by management and the board to strengthen capital adequacy and the expected timeline.

The report highlighted positive aspects of the company’s profile, including its maintained position and brand in the Saudi insurance market, supported by solid distribution capabilities and good asset quality underpinned by a conservative investment strategy. This is evidenced by the relatively low ratio of high-risk assets (HRA) to shareholders’ equity, which stood at 51.8% at the end of 2025, limiting exposure to financial market risks.