Three key factors could hit GCC insurers in 2020 – S&P

Intensifying competition, increasing asset risk, and more onerous and costly regulations are among the key risks that could affect Gulf Cooperation Council (GCC) insurers' earnings and credit conditions in 2020 S&P Global Ratings said today in a report titled Competition, Asset Risk, And Regulation: The Three Factors That Could Hit GCC Insurers In 2020.

"Despite these challenges, our ratings are still supported by insurers' robust capital positions,” said S&P Global Ratings credit analyst Emir Mujkic. “We anticipate that pressure on some rated entities will gradually ease, since a number of companies have strengthened their internal controls and governance arrangements, or de-risked their asset portfolios following years of weakening capital and liquidity buffers. However, we expect that a number of smaller, unprofitable, and/or undercapitalised insurers will struggle to meet increasing regulatory demands.

"It is likely that some will have to raise new capital, consolidate through mergers, or even exit the market entirely. This could particularly be the case in Saudi Arabia and Kuwait, where new regulations including higher capital requirements are likely to be adopted in the near future."

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

​Everest Re Group income surges to $1bn in 2019
Ed Broking boosts parent BGC’s 2019 revenues but profits dip
​​Cultural transformation experts join Lloyd’s Culture Advisory Group
Besso Insurance Group appoints head of Besso Re Sw​iss Re Corporate Solutions appoints UK distribution head
CNA Financial ‘well positioned’ for 2020 on back of solid 2019 results
Gallagher makes key appointments in its UK specialty broking and underwriting divisions
Accenture launches cyber-attack response service for AXA XL’s business customers
​​​ RiverStone completes RITC transaction with The Channel Syndicate
LMA reveals key 2020 objectives as it gears up for post-Brexit world
HDI Global Specialty appoints new head of airline
Reinsurance software solution firm TAI enters longevity market
APRA proposes to uplift transparency around life and general insurance data​​

Don't miss our insurtech email newsletter - sign up today