|
Arabic Insurance Market
|
By Dana F
[Hits: 23904]
|
|
Arab Insurance Market Review
There is little information on the arab insurance market due tothe developing natures of their economies. This is whatarabicinsurance has found so far.
"As a market Insurance premiums in the Middle East are aboutUS$5.3 billion last year - that's less than 1% of the globaltotal, but it's up 12% on the year before and growth is expectedto continue in the near future: some predict that Middle Eastinsurance premiums will hit US$44 billion by 2010. Growingpopulations and incomes, more stringent and sophisticatedregulation, increasing public awareness, and more and moreinsurance products geared specifically to Muslim customers, areall expected to help propel the industry forward during thecoming decade."
"Premiums per capita even more pointedly illustrate how muchroom there is for growth: Insurance premiums in the UAE averagedUS$310 per person in 2003, US$149 per person in Kuwait and justUS$41 per person in Saudi Arabia. That's a fraction of thepremiums paid by policyholders in Taiwan, who shelled out anaverage of US$1,433 in insurance premiums last year, and inSingapore, where the per capita average was US$1,620 - not tomention the premiums earned in highly developed insurancemarkets, such as the UK, where the average person paid more thanUS$4,000 in premiums last year."
Currently, the UAE is the biggest insurance market in the GCC,with US$971 million in premiums last year. But countries such asSingapore and Taiwan, which have a GDP per capita at about thesame level as the UAE, enjoy much higher insurance premiumlevels - US$9 billion and US$32 billion, respectively. With aninsurance penetration rate of just 1.1% of GDP, the Emiratesstill have a long way to go to catch up with Singapore's 7.6%and Taiwan's 11.3% penetration.- http://www.itp.net Arab LifeInsurance Market
Experts believe that life insurers in the region should remainoptimistic, in part because of the usual dynamics of increasingaffluence. Swiss Re noted in a recent study that the "demand forinsurance to cover the risks of old age and death increases intandem with rising per-capita income," and the Middle East,particularly the Gulf countries, have witnessed strong economicgrowth during the past few years: from 1998 to 2002, forexample, the UAE saw GDP per capita rise almost 60%; Kuwait,37%; Oman, about 34%; Bahrain, 26%; and Saudi Arabia, 8%.
The local life insurance industries have risen in parallel insome of these markets. In Kuwait, for example, life insurancepremiums more than doubled from 1998 to 2002; in the UAE,premiums rose 45% during that same time period; and in Bahrainthey went up 28%. However, in Saudi Arabia and Oman, lifepremiums declined, 4% and 6%, respectively.
In the UAE, where life premiums totalled US$226 million lastyear, insurance companies see much room for growth and aredesigning products to try to capture the market. The biginsurers are stepping in to help fill that gap: ZurichInternational Life, one of the UAE's biggest life insurers,recently launched a product here geared specifically towardshigh-income expatriates. Some regional players are also makingmoves in the same direction. In October, Oman Insurance Company,another major local player, launched a new capital-guaranteedsavings product in cooperation with Soci¨¦t¨¦ G¨¦n¨¦rale and said itwould also offer it in other markets in the region. ArabInsurance Market Growth
The Arab Insurance Market review, an annual study published byBahrain-based Arab Insurance Group (AIG), noted in its mostrecent report that GDP in the Middle East and North Africa isexpected to grow by an average of 3.6% annually until 2010,while the population in the region is estimated to reach 330million during the next six years, from 282 million last year.
There is huge potential in Saudi Arabia which currently has thelowest insurance penetration of any market in the world, at just0.5% of GDP. The world average is 3.8%, while its GCC neighbourshave penetration rates that are more than double Saudi's: 1.1%in the UAE, for example, and 1.2% in Oman. The average spendingper person on insurance in Saudi Arabia last year was justUS$41.20 - Premiums per person in Lithuania and Argentina, whichhave a GDP per capita close to Saudi Arabia's, were almost twicethat level.
General insurance accounted for 96% of insurance spending inSaudi Arabia last year, whereas the average spent on lifeinsurance was a measly US$1.70 per person. This breakdownbetween general and life insurance is particularly dramatic inSaudi Arabia, but it reflects the larger situation in theregion, where general insurance massively overshadows the lifemarket. General insurance premiums in the five GCC countries forwhich 2003 data is available totalled US$2.2 billion; lifeinsurance premiums were only US$416 million.
|
|
|
|
|
|
