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Investing.com -- S&P Global Ratings has raised its long-term issuer credit and insurer financial strength ratings on Kuwait-based Gulf Insurance Group K.S.C.P. (GIG) and Gulf Insurance and Reinsurance Co. to ’A+’ from ’A’, with a stable outlook.
The rating agency also upgraded GIG’s tier 2, junior, subordinated, perpetual debt to ’A-’ from ’BBB+’.
This rating action follows S&P’s June 11, 2025 upgrade of GIG’s parent company, Fairfax Financial Holdings Ltd . (TSX:FFH), to ’A-’ from ’BBB+’. FFH’s core re/insurance operating subsidiaries currently hold ’AA-’ ratings.
S&P considers GIG a strategically important subsidiary of FFH, which owns 97.1% of GIG’s shares. This status makes GIG eligible for up to three notches of uplift from its ’a’ stand-alone credit profile, subject to a one-notch cap below FFH’s ’aa-’ group credit profile.
The strategic importance designation reflects GIG’s role in markets that are important to FFH’s growth prospects. GIG also increases FFH’s diversification beyond its core focus on the U.S. market. In 2024, GIG accounted for approximately 9% of FFH’s insurance revenue on a pro forma basis.
The stable outlook indicates S&P expects GIG to maintain its strategically important status within FFH over the next two years. The agency also anticipates GIG will maintain its competitive position in the Middle East and North Africa region while sustaining its current operating performance and capital adequacy levels.
S&P noted it could lower GIG’s rating if it no longer considered GIG a strategic subsidiary of FFH or if the rating on FFH were downgraded. An upgrade is considered unlikely in the next two years due to S&P’s methodology that caps GIG’s rating at one notch below FFH.
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