QFC Indicates Turnaround in Reinsurance Pricing Outlook
Leading professionals of the reinsurance sector in the Gulf region of the Middle East reported increased confidence in the prospects for stronger pricing in the sector.
In a new market research report released by the Qatar Financial Center (QFC), leading professionals working in the reinsurance sector in the Gulf region of the Middle East reported increased confidence in the prospects for stronger pricing in the sector.
… almost all the participants surveyed expect reinsurance prices in the GCC to stabilize or increase over the next 12 months to two years.
About 92% of regional reinsurance professionals expect prices to remain stable or increase, while 88% of respondents interviewed expect reinsurance terms and conditions to tighten. In addition, around 71% of respondents interviewed expect profitability to remain stable or improve, while 67% of respondents interviewed expect reinsurance exposure in the region to increase faster than regional growth in GDP.
The findings of the latest edition of the GCC Reinsurance Barometer show that almost all the participants surveyed expect reinsurance prices in the GCC to stabilize or increase over the next 12 months to two years.
A total of 92% of the firms interviewed in June and early July this year held this view, which represents a major change in the outlook compared with the results in the previous research at the beginning of 2011, when only 29% expected stable or increasing prices. This turnaround is primarily driven by global developments such as the spate of major insured catastrophe losses in the first half of 2011.
The overall outlook for the reinsurance industry in the GCC has improved significantly in the last six months, as the market continues to grow, while capacity growth slows and pricing improves.
According to Qatar Financial Centre Authority, it is clear from the research findings that even in times of global uncertainty, the GCC region remains a very attractive market for the global reinsurance industry. Economic growth in the region is amongst the fastest in the world, which is reflected in the very high levels of planned infrastructure spending. As a consequence, major interest from the world’s largest reinsurers as well as an increasing number of mid-sized players continued to be seen.
A total of 24 companies, with an estimated collective market share of more than 60%, participated in the survey, represented by senior management responsible for the GCC Region. The interviews took place in June and July 2011. Published twice yearly, the GCC Reinsurance Barometer is a regular report monitoring the development of the sector in the region.
The Qatar Financial Centre (QFC) is a financial and business centre established by the Government of Qatar and located in Doha. It has been designed to attract international financial services institutions and major multi-national corporations in particular those operating in the reinsurance, captive insurance and asset management sectors and to encourage participation in the growing market for financial services in Qatar and elsewhere in the region.
The article above has been published as a part of Bank Audi`s MENA Weekly Monitor of Week 38 (2011). It can be accessed via Internet at the following web address: http://www.banqueaudi.com
Picture credit: Wolffolins