The member countries of the Gulf Cooperation Council have traditionally been subject to a low level of weather-related requirements, although Cyclone Mekunu, who struck Oman in May 2018, Super Cyclone Gonu in 2007 and floods in the United Arab Emirates (UAE) and Saudi Arabia serve as a reminder that the region is not completely free of natural disasters.
The report, “The Natural Catastrophe of GCC and Anthropogenic Losses, Emphasizing the Importance of Corporate Risk Management,” states that Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE experienced lower activity due to earthquakes, storms and floods compared to other states.
However, one major catastrophe can have a serious negative impact on the insurance industry. If the coverage of Super Cyclone Gonu was broader or focused on an area with higher insured values, this would lead to very negative consequences for the insurance industry.
A.M. Best believes that insurers need to pay more attention to enterprise risk management.
Free copy of the report:
Source: A.M. Best