IslamicFinance.de

Standard & Poor's Ratings Services said today it lowered its counterparty credit and insurer financial strength ratings on Kuwait-based First Takaful Insurance Co. to 'BB+' from 'BBB-'.
At the same time, the ratings were removed from CreditWatch, where they were initially placed with negative implications on May 12, 2010. The outlook is stable.
Although takaful insurance appears to represent a promising niche in the Kuwaiti market, competition seems to have become extremely fierce, especially owing to the large number of takaful participants in recent years.
The risks of this scenario are intensified by what we see as reduced insurance opportunities.
Renewed pressure on the ratings may occur if the company's performance appears insufficient to maintain earnings and capitalization at levels supportive of the current ratings. Conversely, we could see positive ratings momentum if the company is able to manage a return to a more robust financial and business profile over the next 12 months.