Fitch places Al Sagr on ‘Negative’ watch

Logo of Al Sagr Cooperative Insurance Co.

Fitch Ratings placed Al Sagr Cooperative Insurance Co.’s Insurer Financial Strength Rating of “BBB” and National Insurer Financial Strength Rating of “A+ (sau)” on “Negative” watch.

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This action reflects Fitch's ongoing monitoring of the situation, but does not constitute a downgrade, the company said in a statement.

The rating action followed a recent meeting between the companies to discuss the Insurance Authority’s (IA) suspension of compulsory motor third-party liability insurance (MTPL) policies.

Al Sagr has already begun implementing the necessary corrective measures and is working closely with the IA to lift the temporary suspension as soon as possible.

Fitch is expected to reassess the situation within six months based on the progress made.

The IA decided to bar Al Sagr from selling the mandatory motor insurance product as of Feb. 19 for violating the supervisory and regulatory rules and the board of directors’ failure to adopt effective governance procedures, according to data available with Argaam.