In a move reflecting confidence in its financial strength and operational stability, the National Insurance Company announced that it has successfully maintained its credit rating at “BBB+” by the prestigious global rating agency Standard & Poor’s (S&P). This achievement not only confirms the rating but also includes a significant revision of the company’s outlook from “stable” to “positive,” sending a strong signal to investors and markets about the company’s expected future performance.
Implications of the classification and positive future outlook
A “BBB+” rating is considered investment grade and indicates that the company has sufficient capacity to meet its financial obligations, with reasonable sensitivity to adverse economic conditions. The upgrade of the outlook to “positive” is the most significant indicator in this announcement, as it signifies a one-in-three chance of an upgrade to the company’s credit rating within the next 12 to 24 months, provided the positive trends in its financial and operational performance continue.
General context and importance of credit ratings
Founded in 1860, Standard & Poor's is one of the world's three largest credit rating agencies. Its ratings play a pivotal role in global financial markets, as investors and financial institutions rely on them to assess the creditworthiness of companies and governments. A strong credit rating helps companies secure financing at lower costs, boosts customer and business partner confidence, and opens up new avenues for investment and growth.
Classification on the Saudi national scale
In addition to its global rating, the company stated in a press release published on the Saudi Stock Exchange (Tadawul) website that it received a "+ksaAA" rating on the Saudi national scale, with the outlook also revised to "positive." This rating compares the company's creditworthiness with its peers within Saudi Arabia and places Al Wataniya Insurance in a very advanced position within the local market, reflecting its strong competitive position and its ability to effectively address the challenges of the local market.
Expected impact on the company and the Saudi insurance sector
This positive rating is expected to have a direct impact on the company's performance, enhancing its ability to attract and retain major clients and facilitating more favorable reinsurance agreements. More broadly, this achievement reflects the maturity and strength of the Saudi insurance sector, which is experiencing remarkable development thanks to the robust regulatory environment overseen by the Insurance Authority and the Saudi Central Bank. This aligns with the objectives of the Financial Sector Development Program within the Kingdom's Vision 2030, which aims to create a diversified and stable financial sector that supports the Kingdom's economic growth.
