S&P upgrades Walaa Insurance’s rating to A-, outlook stable

Walaa Cooperative Insurance Co. announced that S&P Global Ratings upgraded its rating to A- from BBB+.

Also, S&P raised Walaa Insurance’s GCC regional scale financial strength credit rating to AAA with a ‘stable’ outlook, according to a bourse filing today, Jan. 24.

S&P depended on the following major drivers in upgrading Walaa’s rating:

- The success of the merger deal between Walaa Insurance and MetLife AIG ANB without facing any fluctuations in capital or profits.

- The company's capital adequacy is above the "AAA" level according to the S&P’s rating model.

The capital adequacy is likely to be enhanced over the coming two years, as the company intends to increase the capital through the proposed rights issue in order to support the diversification in growth.

S&P Global Ratings pointed out that the stable outlook reflects its expectation that Walaa Insurance will maintain its robust capital adequacy while strengthening its competitive position and diversifying its operations.

The ratings agency affirmed that it raised the company's rating based on its management’s proactive approach, exceptional liquidity, very strong financial risk profile, capital strength, and achieved profits against a moderate level of risk.

S&P Global Ratings expected that Walaa Insurance to maintain its capital adequacy while strengthening its competitive position and diversifying its operations.

In March 2020, Walaa Insurance had merged with MetLife AIG ANB, as Walaa Insurance’s capital increased to SAR 646.4 million from SAR 528 million, according to the data compiled by Argaam.

The company recently announced that the board of directors recommended to raise the capital by offering rights issue valued at SAR 775 million.