Mubasher: Insurance companies in most GCC countries will likely face a moderate-to-high credit risk over the next 12 to 18 months, Moody's Investors Service said in a report issued on Tuesday.

"Weak oil prices and high exposure to volatile investment assets are driving credit risk for GCC insurers. These factors are partly offset by the low insurance penetration across the region and improving insurance regulation," according to an analyst at Moody's.

The rating agency also said low oil prices are a headwind for the GCC insurance market in the short- to medium-term, as they slow economic growth and weigh on government spending.

“Growth in GCC insurance premiums slowed to 14% in 2015 from 17% in 2013, still far exceeding growth rates in advanced economies,” the report stated.

“The risk is greatest for insurers in Oman, Bahrain, and Saudi Arabia, reflecting those countries' oil dependence and high break-even oil prices,” it read.

The rating agency considers asset quality to be a key credit weakness for many insurers in the region, and also said insurance regulation is a positive credit catalyst, but standards remain uneven across the region.

Moody's expects insurance premiums to keep growing at a double-digit rate, despite weak oil prices.

The advent of compulsory medical coverage in some countries, and several global sporting and cultural events due to take place in the region, such as EXPO 2020 and the FIFA World Cup 2022, are also supportive, the report concluded.