Saudi Gazette - Some GCC insurers face default risk: S&P

Saudi Gazette - Some GCC insurers face default risk: S&P:

"A small number of well-established insurers are reaping the benefits of the fast-growing insurance markets in the Gulf Cooperation Council (GCC) region, Standard & Poor’s rating services said Sunday.

Meanwhile, inflated valuations and a reluctance to relinquish control are preventing smaller insurers from consolidating. In trying to avoid reporting losses, S&P said revenue-starved insurers could distort market pricing for all.

It noted that insurance in the GCC region continues to benefit from generally robust economic growth because the considerable hydrocarbon wealth of the GCC states sustains their expanding economies. Real GDP growth in the region was nearly 6 percent in 2012, and S&P forecast this growth momentum to continue in 2013 and beyond. The GCC insurance sector grew to nearly $16 billion in terms of gross premium written, with growth rates of over 10 percent in the region's largest insurance markets in 2012. Ample capital is available within the industry to back the growth in insurance premiums, S&P further said."

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