IslamicFinance.de

The enhanced regulatory environment across GCC is expected to result in a surge in costs associated with the implementation of the regulations impacting the profitability of takaful players hard, especially the smaller players. According to S&P profitable insurance companies in the GCC region tend to rely on group medical business or policies that provide significant commission income from reinsurers. Only a few major local insurers can access this profitable commercial business; the smaller players, including the takaful companies, do not have a track record of servicing such contracts and lack the capacity to do so. This leaves all the small players in the region, including takaful companies, reliant on retail business sourced from agents charging high commissions.