Mubasher: UAE insurers are expected to see an improvement in their credit profiles in the medium-term, according to a statement by Moody's Investors Service.
The sector is overcoming compliance obstacles, and adjusting to financial regulations introduced in February 2015.
UAE insurers’ profitability will be pressured on the short-term as new reserve-setting and reporting requirements will lead to continued technical reserve strengthening in 2016 and 2017.
"The UAE's new financial regulations should, in the medium-term, underpin insurers' profitability as well as their capitalisation, asset quality, and reserve adequacy," according to Mohammed Ali Londe, assistant vice president and analyst at Moody's.
"Additional costs associated with the new regulations may prompt consolidation of smaller insurers, or encourage them to focus on business lines that yield adequate returns,” Londe added.
