Al-Etihad Insurance Maintains A3 Rating Amid Strategic Growth

Al-Etihad Cooperative Insurance Co., headquartered in Riyadh, has retained its A3 Insurance Financial Strength Rating from Moody’s Investors Service, reaffirming its position as a stable and disciplined player in Saudi Arabia’s competitive insurance sector.

Moody’s attributed the rating to Al-Etihad’s robust capital adequacy, conservative investment approach, and sustained profitability over the past five years. The firm’s exposure to high-risk assets remains limited, comprising only 28.2% of its equity, underscoring its prudent financial management.

As the eighth-largest insurer in the Kingdom, Al-Etihad has demonstrated consistent growth, particularly in its motor and medical insurance segments. In 2023, the company reported a significant 639.22% increase in net profit, reaching SAR 93.89 million, driven by higher insurance revenues. However, in 2024, net profit declined to SAR 49.13 million, reflecting a 47.67% decrease, despite a 23.91% rise in insurance revenues to SAR 1.48 billion.

The company’s strategic initiatives include a capital increase from SAR 400 million to SAR 450 million through the issuance of bonus shares, approved by the Capital Market Authority. This move aims to strengthen its capital base by transferring SAR 20 million from retained earnings and SAR 30 million from the statutory reserve.

Al-Etihad's investment portfolio exceeds SAR 1.3 billion, with a solvency margin surpassing 200%, indicating strong financial resilience. The company continues to focus on underwriting discipline and risk management to navigate the consolidating insurance market in Saudi Arabia.

In July 2024, Al-Etihad secured a contract with Saudi Iron & Steel Company to provide health insurance services for its employees, a deal exceeding 5% of the company’s gross written premiums for 2023. This contract underscores Al-Etihad’s growing presence in the corporate insurance segment.

Moody’s also highlighted Al-Etihad’s low exposure to governance risks, assigning a Governance Issuer Profile Score of G-2, supported by a conservative financial strategy and experienced management. The agency noted that while Al-Etihad holds a solid market position, it remains smaller than similarly rated peers and must balance underwriting discipline with business volume growth in a competitive market.