AM Best downgrades Watania's outlook

AM Best has affirmed the "B" (fair) financial strength and "bb+" long-term credit ratings of National Takaful Company (Watania).

The rating agency says the technical performance of the Emirati insurer is solid. The net profit stood at 18.4 million AED (5 million USD) in 2020, thus increasing by 40.3% compared to 2019.

The average combined ratio throughout 2016-2020 was set at 96.9%, the return on equity was established at 18.6%.

The rating also reflects Watania's strong balance sheet, business profile and appropriate enterprise risk management.

On the other hand, AM Best has revised the outlooks on these ratings from positive to stable. The rating agency clarifies its decision by the deterioration of the company's solvency below the prescribed minimum requirements at the end of 2020.