The primary insurance rates in the GCC region will continue to soften due to excess insurance capacity, industry analysts at Moody’s said.

This ongoing primary market rate softening, together with overcapacity in the global reinsurance market, will likely put further downward pressure on reinsurance rates within the region, analysts Harshani Kotuwegedara and Mohammed Ali Londe said in a research report.

However, despite these declining rates, many reinsurers still find this region attractive, particularly from a geographic diversification perspective and limited natcat (natural catastrophe) exposure.

“This will lead to further pressure on already declining reinsurance rates in the region, worsening a market already with signs of excess-capacity,” they argued.

Even in 2014, the primary insurance rates in the GCC region softened due to excess insurance capacity, particularly in Qatar.

As per the Marsh Risk Management research, the only primary lines that have experienced some rate increase are “employee benefits-health” and “medical malpractice.”