Profit Pressure and Intense Competition in Second Half of 2021 for GCC Takaful Players: S&P

According to S&P Global Ratings (S&P), Islamic insurers in the Gulf Cooperation Council (GCC) may see profitability dwindle in the second half of 2021 due to a harsh competitive climate and dismal performance in some sectors hit by COVID-19.

Why it Matters?

S&P expects an economic turnaround in the GCC for 2021, supported by the increase in oil prices and the vaccine roll out. However, factors such as slow vaccination progress in some countries, an uneven recovery, ongoing cost-saving measures across several industries and less business travel could hamper expectations of economic growth. Although S&P’s Outlook on the Takaful sector for the next 12 months is maintained at Stable, these factors, coupled with intense competition in...