Islamic and takaful insurers in the Gulf Cooperation Council (GCC) region continue to benefit from favourable growth prospects, said S&P Global Ratings (S&P).
S&P credit analyst Emir Mujkic said, "We expect overall credit conditions for Islamic insurers will remain stable over the next 6-12 months.”
He also said that consolidation would likely remain a hot topic among smaller and midsize players. "About one-fifth of Islamic insurers in Saudi Arabia and about one-third in the United Arab Emirates merged in recent years," he said.
He continued, “We expect competition will pick up in some markets. This — together with anticipated interest rate cuts starting from September and potentially more volatile capital markets — could lead to a sharp decline in earnings in 2025 if Islamic insurers fail to maintain their underwriting discipline.”