S&P sees potential in Abu Dhabi, Omani insurance markets

Standard & Poor's said that the Abu Dhabi and Omani insurance markets offer significant development potential.

The agency said that Abu Dhabi insurers have a long track record of sound earnings generated from their risk management skills.

To some extent, however, this is due to their role as risk handlers for the international insurance market, S&P noted.

"Because the risk values handled are so large, it is impossible for any one company, worldwide, to take such a large risk line, so reinsurance has been a key feature of the market," said S&P credit analyst Kevin Willis.

The investment market slump in the first half of 2006 has caused a strain in the Abu Dhabi market and local insurers will need to invest in client relationships, seek to accept an increased level of risk and move away from the historical "risk distribution" model, according to an agency report.

In Oman, S&P said that there is now a thriving domestic retail and commercial market that increasingly contributes to total market premiums approaching Omani rial 140 million in 2006.

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