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July 16, 2019

Moody's announces completion of a periodic review of ratings of Buruj Cooperative Insurance Company

London, 15 July 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Buruj Cooperative Insurance Company and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Key rating considerations are summarized below.

The Baa2 IFSR reflects Buruj's: (i) strong asset quality, with the vast majority of investments held as cash, bank deposits and investment grade Islamic sukuk bonds, translating to a low high risk assets (HRA) as a percentage of consolidated equity of 37.5% at YE 2018; (ii) improving sophistication in reserving with actuarial-led reserve setting and monitoring (iii) its improved and sustained strong profitability and improved capitalisation. However these strengths are somewhat offset by the significant concentration to the motor and medical lines of business as well as geographical concentration to Saudi Arabia.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was Property and Casualty Insurers published in May 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 

https://www.moodys.com/research/Moodys-announces-completion-of-a-periodic-review-of-ratings-of--PR_403552