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October 23, 2019

Buruj Cooperative Insurance announces Moody’s affirmation of Baa2 insurance financial strength

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Explanation

Announcement Detail

Buruj Cooperative Insurance announces that Moody’s Investors Service according to its press release published on 22/10/2019 has affirmed the Baa2 insurance financial strength rating (IFSR) and changed the outlook from positive to stable. The affirmation of the Baa2 IFSR reflects Buruj's maintained strong asset quality, with the vast majority of investments held as cash, bank deposits and investment grade Islamic sukuk bonds, translating into a low ratio of high risk assets (HRA) as a percentage of consolidated equity and a strengthening of the reserve setting and monitoring processes.

The change in outlook to stable from positive reflects the intensified competitive pressures that Buruj faces in the Saudi insurance market. The stable outlook reflects Moody’s expectation that Buruj will maintain its profitability and capital adequacy levels, but also the challenges for Buruj to regain and maintain its top 20 mid-market position given the high level of competition currently prevailing in the Saudi market.