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Why is this an insurance growth region? Middle East & North Africa

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Middle East & North Africa. Why is this an insurance growth region?. MENA. Profile An insurance growth region Current figures and outlook. More than 20 Countries. Morocco, Algeria, Tunisia, Egypt,Libya Lebanon, Palestine, Israel, Jordan, Syria, Iran, Iraq, Turkey - PowerPoint PPT Presentation

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Page 1: Middle East & North Africa

Why is this an insurance growth region?

Middle East & North Africa

Page 2: Middle East & North Africa

MORO 2006 - London June 13th 2

MENA

Profile An insurance growth region Current figures and outlook

Page 3: Middle East & North Africa

MORO 2006 - London June 13th 3

More than 20 Countries

Morocco, Algeria, Tunisia, Egypt,Libya Lebanon, Palestine, Israel, Jordan, Syria,

Iran, Iraq, Turkey Bahrain, Kuwait, Oman, Qatar, Saudi

Arabia, United Arab Emirates, Oman, Yemen.

Page 4: Middle East & North Africa

MORO 2006 - London June 13th 4

Different economy features

Common cultural heritage, but : Various stages of economic development Different natural resources endowment

(especially oil)

Page 5: Middle East & North Africa

MORO 2006 - London June 13th 5

MENA Vs World

Population : – 7.7% of the world’s population

Total GDP :– Around USD 2 trillions

Page 6: Middle East & North Africa

MORO 2006 - London June 13th 6

MENA

Profile An insurance growth region Current figures and outlook

Page 7: Middle East & North Africa

MORO 2006 - London June 13th 7

Development drivers

Regulation Investment Takaful Compulsory insurance Bancassurance

Page 8: Middle East & North Africa

MORO 2006 - London June 13th 8

United Arab Emirates

BMA developed a world-class regulatory system.

BMA is finalizing a new rules book for the growth of specific lines of business :– Takaful & Retakaful– Bancassurance & Reinsurance– Captive insurance– Professional services (TPA)

Page 9: Middle East & North Africa

MORO 2006 - London June 13th 9

Egypt & Kuwait

Egypt / Insurance reforms pushed forward– New provisions to prevent money laundering– Internal audit committees to ensure compliance

with government regulations.

Kuwait / New decree– Revision of licensing requirements for brokers,

agents and consultants

Page 10: Middle East & North Africa

MORO 2006 - London June 13th 10

Jordan / New set of regulations– Minimum required capital increased– Solvency margin increased

Libya / Insurance market opened– New insurance companies are expected to

enter the market.

Jordan & Libya

Page 11: Middle East & North Africa

MORO 2006 - London June 13th 11

Oman & Saudi Arabia

Oman / Transfer of regulation authority– From Ministry of Commerce and Industry to

Capital Market Authority.

Saudi Arabia / New regulation and authority– In 2003, promulgation of the long-expected

regulation relating to the establishment and licensing of (re) insurance companies.

– SAMA is the insurance authority body

Page 12: Middle East & North Africa

MORO 2006 - London June 13th 12

Development drivers

Regulation Investment Takaful Compulsory insurance Bancassurance

Page 13: Middle East & North Africa

MORO 2006 - London June 13th 13

Investments

New investments thanks to planned policy reforms :– 16 Arab MENA nations showed their intention to pursue

their comprehensive reform : Economic, political, social, educational and legal.

New opportunities for insurance services from :– Privatization programmes,– Expected rapid growth in infrastructure development in

the Gulf Cooperation Council (GCC).

Page 14: Middle East & North Africa

MORO 2006 - London June 13th 14

Investments

Expected new investments driven by liberalization of the insurance sector :– Continuing and encouraging reform in

insurance legislation, particularly in Saudi Arabia.

– Opening of markets in Libya and Syria and untapped potential in Iraq.

– Global liberalisation of financial services as part of WTO membership.

Page 15: Middle East & North Africa

MORO 2006 - London June 13th 15

Development drivers

Regulation Investment Takaful Compulsory insurance Bancassurance

Page 16: Middle East & North Africa

MORO 2006 - London June 13th 16

Takaful products contributed & are expected to continue to contribute to insurance business growth.– Innovative customer needs driven products– Overcome social and religious insurance demand

inhibitors– Interest for Takaful is growing among customers.

Number of Takafuls companies is growing fast. Number of Takaful windows is growing as well

Takaful

Page 17: Middle East & North Africa

MORO 2006 - London June 13th 17

Development drivers

Regulation Investment Takaful Compulsory insurance Bancassurance

Page 18: Middle East & North Africa

MORO 2006 - London June 13th 18

In UAE, demand for insurance increased exponentially due to the introduction of two compulsory lines : – Third party motor liability – Medical protection.

Saudi Health Insurance Market expected to grow by four times in a very short term reaching USD 1 billion.

Compulsory insurance

Page 19: Middle East & North Africa

MORO 2006 - London June 13th 19

Algeria passed a law in August 2003, following the earthquake in May of that year, making insurance against natural hazards obligatory

Compulsory insurance

Page 20: Middle East & North Africa

MORO 2006 - London June 13th 20

Development drivers

Regulation Investment Takaful Compulsory insurance Bancassurance

Page 21: Middle East & North Africa

MORO 2006 - London June 13th 21

In Saudi Arabia, – SAMA allowed local banks collaborate with

insurance companies in the family takaful field through Bancassurance.

– Bancassurance has improved production levels and is expected to account for 30% of market by 2010.

Syria, which has an important banking potential, encouraged bancassurance development by the opening its financial, banking and insurance sectors.

Bancassurance

Page 22: Middle East & North Africa

MORO 2006 - London June 13th 22

MENA

Profile An insurance growth region Current figures and outlook

Page 23: Middle East & North Africa

MORO 2006 - London June 13th 23

805631551

3 442

2 4052 663

0

500

1000

1500

2000

2500

3000

3500

4000

1999 2001 2003

MUSD

LIFE NON LIFE

Premium income in GCC

Page 24: Middle East & North Africa

MORO 2006 - London June 13th 24

509459450

1 755

1 5151 464

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1999 2001 2003

MUSD

LIFE NON LIFE

Premium income in N-Africa

Page 25: Middle East & North Africa

MORO 2006 - London June 13th 25

LIFE NON-LIFE

99/01 15% 11%01/03 28% 29%

99/01 2% -3%01/03 11% 20%

GCC

N-Africa

Growth rates

Page 26: Middle East & North Africa

MORO 2006 - London June 13th 26

0 200 400 600 800 1000 1200 1400 1600

U.A.E

SAUDI ARABIA

MOROCCO

EGYPT

LEBANON

TUNISIA

ALGERIA

KUWAIT

QATAR

OMAN

JORDAN

BAHRAIN

LIBYA

SYRIA

SUDAN

YEMEN

PALESTINE

MUSD

2004 MENA Premium income

Page 27: Middle East & North Africa

MORO 2006 - London June 13th 27

0 2 000 4 000 6 000 8 000 10 000

U.A.E

SAUDI ARABIA

MOROCCO

TUNISIA

ALGERIA

EGYPT

KUWAIT

LEBANON

QATAR

JORDAN

BAHRAIN

LIBYA

SUDAN

OMAN

SYRIA

YEMEN

PALESTINE

MUSD

2010 premium income (e)

Page 28: Middle East & North Africa

Thank you

Ref : The ARAB BUSINESS MAGAZINE “ Al- Iktissad wal- Aamal” (March 2006).

The Annual ARIG Review of the Arab Insurance Market 2003.

The BMA Islamic Finance Review (issue 2 & 10).

The Insurance Review (issue 6).

L’Argus de l’Assurance (July 2005).