Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
S&P Global Ratings has affirmed its “A” long-term issuer credit and insurer financial strength ratings on Abu Dhabi National Insurance Company (ADNIC), maintaining a stable outlook.
The “A” rating places ADNIC in the upper-medium grade category, indicating strong financial strength and a solid capacity to meet its financial obligations, although it remains below the highest ‘AAA’ rating in S&P’s hierarchy.
For policyholders, the rating signals a strong ability by the insurer to honour claims, even under stress scenarios. For lenders and counterparties, it reflects relatively low credit risk and a high likelihood of timely repayment of obligations.
The ratings agency said it expects ADNIC’s operating performance to remain resilient despite ongoing regional developments.
“ADNIC's standard insurance policies typically have war and war-like exclusions, protecting it from potential claims arising from the developments,” S&P Global Ratings said. For policyholders seeking coverage for war, political violence, sabotage, and terrorism, such risks are largely transferred through reinsurance arrangements, with minimal or no net retention on ADNIC’s books, the agency added.
S&P Global Ratings said it expects ADNIC’s capital adequacy to significantly exceed the requirements at the 99.99% confidence benchmark over the next two years, based on its risk-based capital model.
The agency’s base-case scenario assumes post-tax profits of Dh500 million to Dh600 million per year, with a portion to be distributed as dividends to shareholders.
This performance is expected to be supported by ADNIC’s core consumer and commercial lines, as well as its international operations, including its Saudi subsidiary, Mutakamela Insurance Co. (not rated), inward reinsurance business, and planned expansion through a new branch in India’s Gujarat International Finance Tec-City (GIFT City).
S&P Global Ratings noted that its base-case scenario assumes the intensity of the conflict will peak and that any effective closure of the Strait of Hormuz will ease in the coming weeks, although some disruption could persist for months. Under this scenario, the agency believes ADNIC’s revenues and operations are unlikely to be materially affected.
The agency expects ADNIC’s revenue to grow about 5%–10% in 2026, improving to 10%–15% in 2027–2028, supported by its core business lines and international operations.
The stable outlook reflects S&P’s expectation that ADNIC will maintain its strong capital position and earnings profile over the next two years, supported by underwriting and investment income.
