The GCC insurance industry has tripled between 2006 and 2013, as insurance premiums grew from $6.4 billion to $18.4bn, according to Moody's Investors Service.
Moody's said that increasing mandatory insurance covers have also helped increase market awareness.
The ratings agency also said that regulatory measures being rolled out in the GCC aim to enhance the credit profile of the region's insurance market and aid market stability.
The measures will serve to strengthen several credit factors such as capital, by implementing risk based capital measures to ensure it is more correlated to the risk undertaken, and asset/liability quality by respectively limiting asset concentration and enhancing valuation measures, the report added. These follow the rapid – but recently slowing – growth rate and surge in the region's insurance sector.
Moody's said that several takaful-specific regulations are credit positive as they strengthen policyholder security both directly and indirectly.
This is done directly by ensuring availability of capital and, in select cases, indirectly by improving capital access through requiring companies to list on the stock markets.
Increasing mandatory insurance covers, such as health, unemployment, motor third party and liability, have also increased market awareness and represent important credit-positive product evolution for market diversification.
Gulf Daily News