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S&P Warns Of GCC Insurance Slowdown

The development of the GCC insurance sector could slow down after research from Standard & Poor’s reveals business growth in the region had caused insurable risk volumes to increase.

In its first report card on the insurance sector in the region, the ratings agency said heavy state and private sector investment in the region’s economy and infrastructure has caused insurable risk volumes to increase.

It warned the increase in demand for credit risk opinion from policyholders could “hamper” development of insurance in the GCC.

While S&P has a stable outlook on the overall credit strength characteristics of the GCC region, it says it expects to see some rating changes as they react individually to the changing dynamics of the region.

Kevin Willis, S&P credit analyst, said: “We are seeing the fastest expansion in insuring property construction and development projects and relatively low-risk value products such as medical and motor insurance. We expect premium volumes to continue to grow at rates in excess of GDP growth, encouraged in part by the increasing introduction of compulsory medical insurance and the expectation that governments will continue to invest in the physical and economic infrastructure of their countries.”