News Coronavirus watch01 Mar 2021

GCC:Some regulators studying feasibility of insurance coverage of pandemic risk

| 01 Mar 2021

Some regulators in the GCC are reportedly assessing the impact of insurance rates if pandemic risks were insured, S&P Global Ratings says.

Insurers could develop new insurance and non-insurance-related services that cover changes in lifestyles, since a larger number of people are working from home, the international credit rating agency says.

Mr Emir Mujkic, director - lead analyst, Insurance Ratings at ‎S&P raises this point in the report “GCC Insurers In 2021 - Robust Capital Supports Credit Quality”, in which he outlines the opportunities in the GCC insurance market.

Apart from new product development, growth opportunities in the region arise from:

  • Greater awareness

A higher awareness of insurance products and need for protection among the population could increase the demand for medical and critical illness policies covering COVID-19 and other pandemics. Business owners could try to obtain business interruption policies that also cover against pandemic-related risks, which was earlier considered optional.

  • Increased automation and digital distribution

The pandemic has accelerated the development of digital sales and claims processing in the GCC. More automation and focus on digital sales platforms to offset social-distancing measures could ease client access in the future.

  • Stricter regulations

S&P believes that regulators in the region have enhanced their data collection and regulatory oversight following the outbreak of COVID-19. Stricter regulations and more effective regulatory oversight could improve discipline and transparency and also identify weak insurers, which could accelerate the industry's consolidation.


 

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