More consolidation is expected among Islamic insurers based in Gulf Cooperation Council (GCC) countries, according to S&P Global Ratings.
Mr Emir Mujkic, director and lead analyst for insurance ratings in the GCC region at S&P Global Ratings, said that while there might not be as much merger and acquisition activity as there has been in the past two to three years, “definitely, there is a case for consolidation in the different markets in the GCC”.
He said this during a webinar hosted in September 2025 by the global credit rating agency.
Mr Mujkic said that the Islamic insurance market is still relatively young, with some insurers being between 10 and 20 years old.
“We have seen a trend toward the bigger companies getting bigger and stronger, whereas the smaller companies and medium-sized companies are seeking to consolidate,” he said. He noted that some of the smaller companies “have been struggling for a number of years.”
Consolidation and capital raising have already been big topics in the region. In Saudi Arabia, the region’s largest market, there are now 20% to 25% fewer companies than there were 10 years ago, while in the UAE, the second largest market, roughly a third of the takaful companies have seen consolidation through a combination of exits, ownership changes and mergers, Mr Mujkic said.
In Saudi Arabia, financial, competitive and regulatory pressures have fuelled consolidation. The kingdom’s insurance regulator has been encouraging mergers through increased minimum capital requirements and providing benefits to companies that have been through a merger, he said.
In the UAE, while there has not yet been an increase in minimum capital requirements and it is not clear if or when this will happen, “I wouldn’t be surprised if it does. So that could obviously prompt quite a few more mergers in the market,” Mr Mujkic said. M