Reinsurers in the Middle East and North African region are looking to alter their portfolios in favour of new or less volatile segments, and seeking to diversify their revenue streams, states AM Best.
In its Best’s Market Segment Report, “MENA Reinsurers: Turbulence Creates Opportunity”, the international rating agency says that the MENA reinsurance market remains characterised by challenging conditions, overcapacity, and an increase in large loss activity. Increased turbulence in recent years faced by reinsurers creates challenges for some and opportunities for others.
Mr Salman Siddiqui, director, analytics, at AM Best, said, “The competitive landscape has shifted over the past year, driven largely by the difficulties encountered by two of the region’s leading reinsurers. Between them, they supplied capacity of $600m (in total shareholders’ capital) to the market, and also had reinsurance operations across the world. As many cedents sought to replace these reinsurers on their reinsurance panels, opportunities opened up for existing competitors looking to increase their line size and diversify their cedent base, as well as for newer competitors to enter the market.”
The report also notes that well established regional reinsurers have shown resilience to the challenging operating environment. Although their performance has lagged that of their global peers, they continue to ride competitive pressures and carve out market niches to support their operations.