Industry experts applaud insurers’ reaction to Phet

Industry experts tell Tracey Scott why the devastation wrought by Cyclone Gonu has left insurers better prepared for the latest catastrophe to rip through Oman, Cyclone Phet.

GCC Growth Hampered By Low Populations

Low population numbers in GCC countries is restricting the scale of growth throughout the region’s insurance markets, an A.M Best Co report has claimed. The credit rating agency also said “fierce” competition among local insurers was hampering growth in some segments. “Foreign insurers and reinsurers are aware of the opportunities the GCC offers in comparison with the West’s stagnant insurance markets. However, competition, particularly among local insurers, remains one of the biggest challenges to companies operating within the GCC,” said Yvette Essen, head of market analysis for A.M. Best’s global financial services division.

New S&P Scale Reveals First Gulf Ratings

Standard & Poor’s has assigned its first regional credit ratings for the GCC after launching a new assessment scale in February. The outlook for UAE-based Emirates Insurance Co is set at gcAA under S&P’s recently-launched scale, while Bahrain National Insurance has secured the same rating. Both companies have a stable BBB+ international rating. The ratings reflect both companies’ strong operating performance, capitalisation, investments and liquidity, S&P said.

UAE Insurers Could Post Motor Losses

Insurers in Dubai are expected to post motor insurance losses this year as lower premium rates arising from increased car cover competition hits the segment. Some insurance companies have even cancelled deals and given motor insurance policyholders their money back, a UAE newspaper reported. Omer Elamin, senior managing director of UAE insurance company Orient, said with motor insurance premiums falling on average by 30-40% last year, few companies would profit from this market in 2010.

Hard Times Are Still Ahead

James Portelli explores the effects of the financial crisis on technical performance.

The State Of Kuwait

Government projects have fuelled growth for local insurers, but the Kuwati government will look to build on this in 2010.