Moody’s is concerned about the investment strategy pursued by Middle Eastern insurers

Moody’s has stated that Middle Eastern insurers’ rating will remain under pressure for the next 12 to 18 months. The rating agency argues that the insurers’ investment strategy is over-relying on real estate and stock markets which are hardest hit by the crisis, which is going to weigh down the insurers’ financial soundness. The poor interest rates granted by banks are not likely to encourage insurers to detain deposit accounts. This pressure will gradually die down with the tightening of the legislation and the more widespread use of risk management patterns.