S&P Reports Ratings Gap ‘Narrowing’ between Middle East & UK Insurers

Standard & Poor’s Ratings Services has published “How Middle East Non-Life Insurers Are Developing From A Rating Perspective: A Comparison With The U.K..” S&P initially stated: “Middle East non-life insurers are generally rated lower than their U.K. counterparts, and in particular are viewed as having considerably less developed enterprise risk management (ERM) and much higher risk investment profiles.”

However, the report continues, “it is also the case that Middle East non-life insurers usually have a better competitive position and operating performance than U.K. non-life insurers, and many are working hard to remedy their relative weaknesses, particularly ERM.”

S&P credit analyst Nigel Bond indicated that the rating agency expects “credit ratings on Middle East non-life insurers to move gradually higher and narrow the gap with those on U.K. non-life insurers.”

As a sign of the rapid development ion the Middle East, S&P noted that as recently as five years ago it had “no interactive non-life insurance ratings in the Middle East. Now, there are 13 and a steady stream of other non-life insurers requesting an interactive rating. It is clear, therefore, that ratings are becoming an increasingly important part of the non-life insurance industry in the Middle East.”

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Source: S&P