OLDWICK, N.J.--(BUSINESS WIRE)--In this A.M.BestTV episode, Salman Siddiqui, associate director of analytics, A.M. Best, discusses the insurance markets of the Gulf Cooperation Council (GCC) region, saying that a relatively large number of insurers there are chasing a limited amount of business, lowering prices and hurting margins. Click on http://www.ambest.com/v.asp?v=gcc418 to view the entire program.
In a recent market segment outlook briefing, Siddiqui highlighted the reasons A.M. Best has a negative outlook on the GCC region.
“There has been some consolidation in the market in terms of mergers and acquisitions,” said Siddiqui. “However, the number of companies operating in these markets relative to premium available still remains quite high. For example, in Kuwait, there are 30 insurance companies operating in a market for a very small amount of premium.”
Additionally, he said, “Pricing pressure overall has abated a little bit, primarily on the motor and medical lines, thanks to regulatory intervention. Nevertheless, because of the level of competition, the level of pricing pressure remains quite high. As a result, A.M. Best expects to see some pressure on insurance margins.”
Siddiqui said he also sees positives in this market, in that, “the balance sheets of the insurance and reinsurance companies that A.M. Best rates in the GCC region overall are well-capitalized from a risk-adjusted basis. They benefit from large capital bases and have low premium retention and reinsurance panels of very good credit quality.”
To access a copy of this briefing, titled, “Market Segment Outlook: Gulf Cooperation Council,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=270360.
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