IslamicFinance.de

Inflated valuations and a reluctance to relinquish control are preventing smaller insurers in the GCC from consolidating, and in a move to avoid reporting losses, they could distort market pricing for all, according to the RatingsDirect analysis from Standard & Poor's Ratings Services. The reports adds that a small number of well-established insurers are reaping the benefits of the fast-growing insurance markets in the GCC region. The GCC insurance sector grew to nearly $16 billion in terms of gross premium written and we observed growth rates of over 10 per cent in the region's largest insurance markets in 2012. Ample capital is available within the industry to back the growth in insurance premiums. Both regional and international investors are looking for a slice of the business because of the growth potential. This creates a highly competitive marketplace in which all companies are contending for profitable business. The ensuing competition puts pressure on margins.