A.M. Best has assigned a financial strength rating of “B+ (Good)” and an issuer credit rating of “bbb-” to National Takaful Company (Watania) PJSC.
Takaful is a type of Islamic insurance where members contribute money into a pooling system to secure each other against loss or damage. Takaful insurance is based on Islamic religious law, Sharia, explaining how it is the responsibility of individuals to cooperate and protect each other.
Watania was founded in 2011 as a new company providing all lines of non-life takaful business. Medical is the most significant business line, contributing 72 percent of gross written premiums and 81 percent of net premiums in 2012.
The ratings reflect Watania’s strong prospective risk-adjusted capitalisation, supported by strong reinsurance protection, a conservative investment strategy and its sound business plan.
“Offsetting rating factors are below target results in 2012 and the execution risk Watania faces in the competitive UAE insurance market,” said a statement from A.M. Best.
Watania has entered a very competitive market place, facing pricing pressure from both takaful and general insurance providers, which may present difficulty in achieveing premium volume targets.
A.M. Best explained that any future positive or negative ratings pressures are likely to result from Watania’s ability to successfully execute its business plan.
