RIYADH: Moody’s Investors Service has downgraded the Mediterranean and Gulf Cooperative Insurance and Reinsurance Co insurance financial strength rating to Ba2 from Ba1.
The firm, also known as MEDGULF KSA, is a Saudi joint stock company, and has seen its outlook changed from positive to negative.
This reflects the challenges MEDGULF KSA faces in improving its underwriting performance and continued pressures on its capitalisation.
In addition, Moody’s expects the company’s financial flexibility to become more constrained since its rights issue in 2021 with greater uncertainty around its ability to access additional external capital given persistent underwriting losses.
Meanwhile, Moody’s has also downgraded the local and foreign currency long-term issuer ratings of Sharjah Islamic Bank to Baa2 from Baa1.
In addition, the bank’s baseline credit assessment was downgraded to ba2 from ba1, while the outlook on its long-term issuer ratings changed to stable from negative.
Moody’s says that the downgrade of the bank’s long-term ratings captures the downgrade of the bank’s BCA to ba2 from ba1 and reflects primarily the deterioration in the bank’s asset quality.