Fitch Ratings has upgraded Oman Re’s Insurer Financial Strength (IFS) Rating to ‘BBB’ from ‘BBB-‘, assigning a Stable Outlook.
The reduction in investment and asset risk were the primary drivers for the upgrade, the rating agency stated, noting the strong correlation between Oman Re’s financial health and the sovereign’s credit quality.
Following the upgrade of Oman’s sovereign rating, the proportion of Oman Re’s “risky assets” relative to its capital improved significantly, dropping to 46% as of October 2025, down from 72% at the end of 2024.
A majority of the company’s investments (57% at end-2024) are held in Omani sovereign bonds and term deposits with local banks. As the sovereign rating improved, these assets were reclassified to a lower risk category.
Fitch highlights the company’s capitalisation as a key strength, supported by a ‘Strong’ score in Prism Global model, and expects this to remain at end-2025. The reinsurer maintains a healthy local solvency margin of 167% (end-2024) and operates with zero debt.
Despite challenges in the wider market, Fitch noted that Oman Re has delivered robust financial results, reporting an increased net profit after tax of OMR 3.0 million, driven by solid underwriting and investment returns.
The company also reported a combined ratio of 94% for 2024, a figure that Fitch considers as strong, even after accounting for slight increase caused by flood losses in the UAE.
While Oman Re has a well-diversified franchise across the Middle East, Turkey, and Central/Eastern Europe, Fitch notes that its operating scale remains small compared to global peers, with gross reinsurance revenue of approximately OMR 50 million (USD 130 million) in 2024.
The Stable Outlook reflects Flitch’s expectation that the company will maintain its capitalisation strength and underwriting discipline.
According to the rating agency, a further upgrade would likely require another upgrade of Oman’s sovereign rating or a significant increase in the company’s size and scale while maintaining performance.
A negative rating action could be triggered by a downgrade of the sovereign or a decline in capitalisation to the low end of ‘Adequate’ range.
About the Author
