Global Arab Network | Negative Implications: Kuwait-Based First Takaful Insurance Co. 'BBB-' Ratings Put on CreditWatch

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Negative Implications: Kuwait-Based First Takaful Insurance Co. 'BBB-' Ratings Put on CreditWatch

Global Arab Network - - Mohammed Almasri

Wednesday, 12 May 2010 08:35

Negative implications - Kuwait-Based First Takaful Insurance Co. 'BBB-' Ratings Put on CreditWatch

Standard & Poor's Ratings Services said today it placed its 'BBB-' counterparty credit and insurer financial strength ratings on Kuwait-based First Takaful Insurance Co. on CreditWatch with negative implications.

"The rating action mainly reflects our view of the deteriorating underwriting performance of the takaful fund, poor investment results for both members and shareholders, and diminished growth in a very difficult economic and competitive environment," said Standard & Poor's credit analyst Wolfgang Rief. "It also reflects our uncertainties about management's strategy and measures to restore profitability and regain growth momentum."

Standard & Poor's would resolve the CreditWatch within the next 90 days following discussions with the company's management to further clarify the reasons for the deterioration in performance. In particular, Standard & Poor's intends to get more insight into how the company is responding to the challenging dynamics of the market and what strategies and measures it plans to implement to achieve improvements.

"If we decide to downgrade the company, the rating change is unlikely to exceed one notch," said Mr. Rief.

Global Arab Network

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