Net profits of Islamic and Takaful insurers in GCC reach record of almost $1bn

Written by Adam Cadle

13/08/2024

Net profits among Islamic and Takaful insurers in the Gulf Cooperation Council (GCC) reached a record of almost $1bn in 2023, mainly due to rate adjustments in previously underperforming lines and higher investment returns, S&P Global Ratings research has shown.

2024 is set to be another profitable year, it said, and higher insurance demand in Saudi Arabia, the largest Islamic insurance market in the region, is to boost growth prospects.

Competition, however, is set to pick up in some markets. S&P Global Ratings said this, together with anticipated interest rate cuts starting from September and potentially more volatile capital markets, could lead to a sharp decline in earnings in 2025 if Islamic insurers fail to maintain their underwriting discipline.

Overall credit conditions for Islamic insurers will remain stable over the next six to 12 months, with consolidation likely to remain a hot topic among smaller and midsize players. About one-fifth of Islamic insurers in Saudi Arabia and about one-third in the UAE merged in recent years.

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