More GCC insurance mergers likely after flooding impact | AGBI
Consolidation in the GCC’s insurance sector – already underway because of rising competition and stricter regulations on solvency capital requirements – could be accelerated by the impact of the flooding in the region last week.
Rating agency S&P Global said that many insurance companies – mainly in the UAE, Kuwait, and Saudi Arabia – were failing to meet the required solvency capital requirements even before the heaviest rains in 75 years arrived to further test their financials.
Faisal Abbas, vice-president at insurer The Continental Group, added: “The insurance industry will inevitably grapple with low profitability in the near term and understandably increase premiums to offset losses. However, it may not end at that. There is a strong likelihood of changes to underwriting processes to reduce exposure to such risks going forward.”