Gulf Islamic insurers face tough competition, pressure on profits – S&P
Published 28 Jul,2021 via Arab News - Economy RIYADH - Islamic insurers in the GCC may see profitability wane in the second half of 2021 as they face a tough competitive environment amid weak performance in some sectors hurt by the coronavirus pandemic, according to S&P Global Ratings.
Some smaller Takaful companies will need to raise capital or merge, particularly in Saudi Arabia and Kuwait, where losses have persisted, S&P credit analyst Emir Mujkic wrote in a report.
“Our outlook on the sector for the next 12 months remains stable,” he said. “However, given that risks related to the pandemic persist, we could take rating actions in the event of a sharp decline in asset prices, unexpected and severe technical losses, or governance and internal control failures.”
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