GCC insurance industry requires regulatory ‘passporting' to enable scale and profitability

Groundbreaking Middle East Insurance Outlook report highlights need for companies to perform activities across borders with greater ease in light of current economic situation - just 6.6% in 2014 for commercial lines

Manama, Kingdom of Bahrain, 13 January 2016: The conveners of the longest running Insurance platform for the Middle East – the Middle East Insurance Forum (MEIF) - announced that a groundbreaking report on the region’s insurance industry will be launched exclusively at MEIF 2016. Middle East Global Advisors, an intelligence platform serving markets in the Middle East North Africa Southeast Asia (MENASEA) region, joined hands with the Central Bank of Bahrain (CBB) in a press conference to share some of the insights of the much-awaited “Finance Forward Insurance Outlook Report 2016”.

The report aims to help leaders in the insurance industry make key strategic decisions and capitalize on emerging opportunities. The host of the press conference, Mr. Abdul Rahman Mohammed Al Baker, Executive Director of Financial Institutions Supervision at the CBB, said: “We are delighted to announce that the 12thannual MEIF will serve a launching platform for such an important industry report. MEIF 2016 is set at an opportune time at the start of the year to really shape the future trajectory of the Middle East’s insurance industry.”

Present from Middle East Global Advisors was its Vice-Chairman and CEO, Dr. Sayd Farook, who set the macroeconomic scene for the Finance Forward report: “The financial services industry is facing an uncertain global economy. Low oil prices, rising interest rates, a strong dollar and concerns about emerging market growth will most certainly weigh on financial institutions, banks as well as insurers in the Middle East.”

Dr. Farook continued by conveying some of the results from the report’s survey, which is ongoing: “Budget cuts impacting infrastructure spending across the Middle East constitute a major concern for many survey participants, especially given that commercial lines have been buoyed by large projects.  In 2014, growth in commercial lines grew just 6.6% (compared to 19.6% for personal lines) which may account for survey respondents’ more optimistic outlook for medium-term premium growth in personal lines.”

Dr. Farook added: “Many respondents are looking into online channels, particularly for personal lines, and into expanding outreach to underinsured consumers to support their future growth – especially digital strategies. Yet a major hurdle is the fact that regulations are uneven across the Middle East, and are lacking in some critical areas.”

Mr. Al Baker indicated: “The Middle East insurance industry has grown considerably; however, it still lags behind other emerging and frontier markets in the overall penetration. Instead of encouraging competition between insurance companies and takaful operators for a share of a small market, we need the entire sector to find strategies to make the market grow more rapidly to support consolidation and create a more robust capital base.”

MEIF 2016 will take place on the 2nd and 3rd of February at the Gulf Hotel in Manama, Kingdom of Bahrain. The “Finance Forward Insurance Outlook Report 2016” will be launched at the forum.