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MARCH 31, 2021 07:46 AM (EDT)

Best’s Market Segment Outlook: AM Best Maintains Gulf Cooperation Council Insurance Outlook at Negative


CONTACTS:
 Emily Thompson
Financial Analyst
+44 20 7397 0291
emily.thompson@ambest.com

Alex Rafferty
Associate Director, Analytics
+44 20 7397 0312
alex.rafferty@ambest.com
Richard Banks
Director, Industry Research – EMEA
+44 20 7397 0322
richard.banks@ambest.com

Edem Kuenyehia
Director, Market Development
& Communications
+44 20 7397 0280
edem.kuenyehia@ambest.com

FOR IMMEDIATE RELEASE

LONDON - MARCH 31, 2021 07:46 AM (EDT)
AM Best continues to hold a negative market segment outlook on the insurance markets of the Gulf Cooperation Council (GCC). Factors supporting the outlook include COVID-19-driven uncertainty and the risk that further oil price volatility will maintain economic pressure across the region. In addition, there is concern over price adequacy amid intensely competitive conditions. Financial market fluctuations and depressed real estate valuations, as well as the expectation of liquidity pressures and increased delays in cash collection, also weigh on the outlook.

A new Best’s Market Segment Outlook, titled, “Market Segment Outlook: Gulf Cooperation Council Insurance,” notes these factors are partially offset by tightening regulatory oversight and control, and easing regional geopolitical tensions.

The report recognises that there are opportunities for market consolidation, with merger and acquisition activity on the rise, and notes that regional insurers’ generally well-capitalised balance sheets have generally proven resilient to shock scenarios. However, with uncertainty set to persist through 2021, testing conditions will continue to leave carriers exposed to capital volatility and shrinking profit margins.

To access a complimentary copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=307303 .

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.