AM Best continues to maintain a stable market segment outlook on the insurance markets of the Gulf Cooperation Council (GCC). Key elements aiding the outlook encompass potential premium boom following the rollout of mandatory health insurance in Oman and Bahrain, as well as short-term growth possibilities arising from the 2020 World Expo in the United Arab Emirates (UAE). In addition, huge reinsurance support, advances in risk management and elevated regulatory sophistication throughout the region, are factored into the outlook.

A new Bests Market Segment Report, titled, Market Segment Outlook: Gulf Cooperation Council, notes these elements are partially offset by a heightened risk environment due to extended geopolitical risks. This will increase the potential for volatility in hydrocarbon prices, which can also in turn have an effect on public spending in the region.

The outlook notes that the balance sheets of GCC insurers normally continue to be well-capitalised and capable of enduring catastrophe stress scenarios, although insurers are vulnerable to shocks in investment markets, which can also turn out to be more severe if economic and political instability increases. Balance sheet strength might come under pressure for some insurers if earnings decline and shareholder dividend expectations do not adjust. That said, AM Best believes that those insurers that are innovative, have capital buffers, are in a position to rationalise their dividend policies, and have preferential access to enterprise are in a better position to face up to the pressures of the present day operating environment.

To access a complimentary copy of this market segment outlook, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=294449.