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GCC Insurers In 2021: Robust Capital Supports Credit Quality

We expect our ratings on insurers in the Gulf Cooperation Council (GCC) to remain broadly stable in 2021. This is mainly thanks to robust capital buffers and despite ongoing economic uncertainty relating to the COVID-19 pandemic. Real GDP in the GCC countries will likely recover to about 2% in 2021 on average, after the sharp contraction in 2020, but we believe that key sectors, particularly real estate, hospitality, and retail, will remain under pressure this year. With the relatively large number of insurers in the region, some of which are small or posting losses, we expect to see further capital raising and consolidation, particularly in Kuwait and Saudi Arabia where regulators may introduce higher capital requirements.