ï‚· We reduce our GWP growth forecasts for health after two quarters of market contraction, with a reduction in the enforcement gap driving growth in GWPs over the next 3-5 years (CAGR of 7.9%).
ï‚· Underwriting margins may have peaked - with most insurance companies having repriced policies - due to increasing rivalry from Tawuniya, which is attempting to recapture lost market share.
ï‚· We see better fundamentals for motor insurance with a larger enforcement gap (55% vs. 25% in health), though we are not optimistic that this gap will close fully in the immediate future. Improvement in combined ratio should come from better claim management, with prices already peaking.
 We initiate on Al Rajhi and Arabian Shield with a Core Buy recommendation. We downgrade Bupa to Hold from Core Buy. We keep Tawuniya at Core Buy, Medgulf at Sell and initiate on Malath with a Hold.​
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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