Transcript Regional Watch - Public Version - IMEA

Regional
Watch
Broker Version
IMEA
International Markets
Market Intelligence
January 2010
FOR BROKERS
Disclaimer
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ALGERIA
IRAN
QATAR
BAHRAIN
KENYA
SAUDI ARABIA
BANGLADESH
KUWAIT
SOUTH AFRICA
EGYPT
NIGERIA
SRI LANKA
INDIA
PAKISTAN
UAE
Countries in grey are currently only available for Managing Agents in
password-protected Regional Watch
Disclaimer
ECONOMY
BAHRAIN: country dashboard
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GDP 2008
USD 21BN
GDP SIZE IN USD BN
AND GDP GROWTH
OVERVIEW
Agriculture
1%
30
10%
EASE OF DOING BUSINESS: 18th worldwide
8%
GLOBAL COMPETITIVNESS: 37th worldwide
6%
STRENGTHS: one of the region’s leading
financial centres with an open economy
Industry
39%
Services
60%
21
20
18
15
GDP SIZE : 97th worldwide (UK ranks 6th)
4%
10
2%
0
0%
2006 2007 2008
INSURANCE
NON-LIFE DWP 2008
USD 0.19BN
Property &
Liability 10%
MAT 3%
Health 16%
DWP SIZE IN USD BN
AND DWP GROWTH
0.20
0.19
OVERVIEW
SIZE: 87th worldwide (UK ranks 3rd)
40%
0.15
0.15
30%
0.11
Misc 5%
Motor 66%
0.10
20%
0.05
10%
0.00
CHALLENGES: an economy highly dependent
on oil and hampered to some degree by the
Bahrainisation of private sector jobs.
0%
2006 2007 2008
TOP 5 INSURERS: Bahrain Kuwait Ins Co,
Bahrain National Ins Co, Takaful International, Al
Ahlia Insurance Co and Gulf Union Ins & Re Co,
with a combined market share of 75%.
KEY CLASSES: Motor due to its compulsory
nature. At 77%, motor is the class with the highest
claims ratio.
REINSURANCE: USD 0.17bn (2008)
GWP PENETRATION: ~ 1.7% (2008)
NON-LIFE GWP 2008
USD 28.4M
Misc
8%
Health 4%
LLOYD’S
Misc 1%
MAT
10%
Motor
1% Property
35%
Liability
46%
20
20.1
21.4
10
Liability 15%
SIZE: 65th for Lloyds (UK ranks 2nd)
TOP 5 MA’s: write 19% of Lloyd’s total
28.4
30
Property 31%
MAT 49%
OVERVIEW
GWP SIZE IN USD M
AND DWP GROWTH
40%
REINSURANCE: USD 24.5m (2008)
20%
GWP MARKET SHARE: ~ 7.8% (2008)
10%
0
KEY CLASSES: MAT and property
30%
0%
2006 2007 2008
STATUS: direct license only for risks not covered
locally given approval from the Central Bank of
Bahrain. Cross border reinsurance allowed.
NO OFFICE
BROKERS are mostly involved with large commercial and
industrial risks and reinsurance outside Bahrain. 32 licenced
brokers in 2008, with Willis and Aon amongst the largest
and longest established international brokers.
INTERNET AND BANCASSURANCE currently very weak
channels.
CATASTROPHES
click for basic
information
click for detailed
information
REGULATIONS
DISTRIBUTION
DIRECT HANDLING is the major distribution channel.
COMPULSORY CLASSES: 3rd party
liability for motor, professional indemnity
for insurance intermediaries and workers
compensation.
REGULATOR OF INSURERS AND
INTERMEDIARIES: www.cbb.gov.bh
Susceptible to droughts (high), earthquakes (medium) and floods (low).
Market Intelligence data based on: Bahrain Ministry of Finance, Central Bank of Bahrain, Global Edge, Global
Opportunities, Lloyd’s crystal, Lloyd’s Xchanging, Munich Re and World Economic Outlook Database. DWP = direct
written premiums. GWP = gross written premium (includes reinsurance). Claims ratio = claims as % of GWP earned from
2005 to 2008.
Disclaimer
OVERVIEW
BAHRAIN: the insurance market
Bahrain’s continued development as an important financial centre has created an insurance market amongst the
most dynamic in the Gulf region. Although it remains the smallest insurance market in the Gulf Cooperation
Council (GCC), it has been growing steadily. Premium growth since 2002 has been strong at approximately 20%
annually.
The insurance market is expected to continue to grow thanks to growing GDP (approximately 7% annually with
equally strong growth expected in the future) and growing insurance awareness within the region. Further growth
may be encouraged by the possible introduction of compulsory health insurance for expatriates (awaiting
parliament approval) in the next few years.
INSURERS 2008
KEY PLAYERS
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Foreign
convetional
17%
Local
takaful 16%
Insurers licenced to write direct business in Bahrain fall into three categories: local
conventional insurers (Bahrain Kuwait Insurance Co), local takaful insurers (Takaful
International) and foreign conventional insurers with a local branch in Bahrain (ACE
American Insurance Co). The insurance company enclosed by brackets indicates
the top insurer by premium within the category in 2008.
Local
conventional In 2008, local conventional insurers wrote the majority (67%) of non-life DWP.
67%
Foreign conventional insurers wrote approximately the same share of non-life DWP
KEY CLASSES
REINSURANCE
as local takaful insurers (17%).
Between 2005 and 2008 approximately half of GWP written in Bahrain was ceded to
reinsurers. Motor is the class with the highest retention (85%), whilst all other
classes have lower retentions ranging from 20% to 50%.
Ceded
49%
Retained
51%
In 2008, Bahrain had 5 registered reinsurance companies, 1 of which was takaful.
The leading and oldest local reinsurer is ARIG (Arab Insurance Group).
The key class in Bahrain is motor (66%), of which Lloyd’s writes an insignificant proportion on a reinsurance
basis. The second largest class is health (16%), whose size is expected to grow as Bahrain considers
compulsory health insurance for expatriates. Again, Lloyd’s writes a very small proportion (4%) of this class.
Although MAT is the smallest class (3%), it accounts for approximately half of Lloyd’s written premiums from
Bahrain.
The following slide provides information for all (Bahrain) insurance classes on GWP size, the split of GWP
between retained and ceded premium, the size and growth of the class and the claims ratio for that class over
the period 2005-2008.
Market Intelligence data based on figures from CBB, UNEP and articles from Clyde & Co. For more information on takaful read “Takaful Q&A”
and “The future of takafu”l from Clyde & Co along with Ernst and Young’s “Takaful Report 2009”.
Disclaimer
CLASS OVERVIEW
BAHRAIN: classes of business
GWP 2008
USD 0.36BN
Property &
Liability 23%
Misc
15%
MAT 6%
GWP 2008
0.3
0.36
0.24
0.27
40%
100%
30%
80%
0.2
20%
0.1
10%
0.0
Motor 40%
0%
60%
Retained
22%
17.9
15
8.0
10
54%
CLAIMS RATIO
100%
120%
80%
80%
40%
0
0%
60%
44%
27%
31%
20%
0%
2006 2007 2008
USD 20M
MAT
Retained
31%
Ceded
69%
6
4.7
4.8
40%
100%
30%
80%
4
20%
2
10%
0
0%
37%
23%
20%
0%
MOTOR
120
30%
108
124
80
10%
40
Retained
85%
0%
MISCELLANEOUS
9.3
10
7.0
120%
40%
4
2
0%
0
-40%
40%
0%
80%
60%
30%
40%
20%
22%
7%
0%
2006 2007 2008
USD 57M
120%
HEALTH
30.5
30
Ceded
46%
20
Retained
54%
22.8
11.3
10
40%
64%
68%
62%
60%
40%
20%
0
0%
2006 2007 2008
Market Intelligence data based on figures from CBB..
Miscellaneous is a medium sized class (15%) in
Bahrain. Lloyd’s writes a small proportion of this
class;
Claims ratio for miscellaneous are reported to be
consistently below the Bahrain insurance market
average.
Approximately half of health GWP is ceded
(46%);
100%
80%
80%
Claims ratio for motor are reported to be
consistently above the Bahrain insurance
market average.
A high proportion of miscellaneous GWP is
ceded (83%);
100%
2006 2007 2008
40
A low proportion of motor GWP is ceded
(15%);
Motor is a large class (40%) in Bahrain, aided
by its compulsory nature;
2006 2007 2008
80%
5.3
6
Ceded
83%
77%
60%
2006 2007 2008
8
75%
77%
20%
0
USD 55M
Retained
17%
100%
80%
20%
84
MAT is a small class (6%) in Bahrain. Lloyd’s
writes a large proportion (70%) of this class;
2006 2007 2008
USD 146M
Ceded
15%
Claims ratio for property and liability are
reported to be consistently below the Bahrain
insurance market average.
Claims ratio for MAT are reported to be
consistently below the Bahrain insurance
market average.
20%
2006 2007 2008
160
Property and liability is a medium sized class
(23%) in Bahrain. Lloyd’s writes a significant
proportion (15%) of this class;
A high proportion of MAT GWP is ceded
(69%);
60%
40%
OVERVIEW
A high proportion of property and liability
GWP is ceded (78%);
40%
2006 2007 2008
6.3
Insurance market growth has been strong due
to government investment in infrastructure,
private investment in real estate and growing
insurance awareness amongst the public;
Claims ratio across Bahrain are consistently
medium as reported by CBB.
0%
160%
5
8
The key class in Bahrain by GWP is motor;
2006 2007 2008
4.8
Ceded
78%
56%
20%
DWP SIZE (USD M) & GROWTH
20
51%
40%
2006 2007 2008
USD 83M
PROP & LIAB
CLAIMS RATIO
GWP SIZE (USD BN) & GROWTH
0.4
Health
16%
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0%
2006 2007 2008
Health is a medium sized class (16%) in
Bahrain. Lloyd’s writes a small proportion of
this class;
Claims ratio for health are reported to be
consistently above the Bahrain insurance
market average.
Disclaimer
BAHRAIN: Lloyd’s position
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LLOYD’S GWP SIZE (USD M) AND GROWTH
30
40%
25
20
30%
20%
15
10
10%
0%
5
0
-10%
-20%
OVERVIEW
02 03 04 05 06 07 08
CLASS GWP AS % OF TOTAL DWP
LIABILITY
80%
PROPERTY
60%
MAT
40%
MISC
20%
HEALTH
0%
01 02 03 04 05 06 07 08
Lloyd’s GWP growth since 2002 has been very erratic. A period of decline between 2002 and 2004 was followed
by a period of erratic growth. It is unknown whether Lloyd’s decline in GWP between 2002 and 2004 follows that
of the Bahraini insurance market, as data on the latter is available only from 2005. For 2006 and 2007 Lloyd’s
GWP growth was below that exhibited by the Bahrain insurance market, before overtaking it in 2008. CAGR
since 2002 has been approximately 5%.
The chart on the right illustrates how the different classes have been fairing within Lloyd’s, as a percentage of
total GWP written by Lloyd’s, from 2001. Lloyd’s two key classes (MAT and property) have been fairing erratically
since 2001, which may be partially due to rate changes.
In the last 5 years MAT and liability GWP have been on the decline (as a proportion of Lloyd’s GWP) whilst
property and health have been on the rise.
The Lloyd’s market is fairly consolidated in terms of managing agents, with the top 10 bringing in approximately
32% of GWP. The top 10 brokers place approximately 46% of GWP (2008).
BAHRAIN: regulations
BIA
CBB
The Central Bank of Bahrain (CBB) is the regulator of financial services in Bahrain, including insurance. Volume
3 of the CBB rulebook covers the licencing regime for both insurers and intermediaries.
CBB’s policy is to allow foreign insurers to operate within the market either by setting up a local branch or as a
new start-up – no local ownership is required. Once established, all insurers are expected to maintain minimum
solvency margins, with further solvency requirements based on premium income. Licenced insurers are then
allowed to write both direct business within the Bahrain market as well as reinsurance of Bahraini and foreign
business.
The Bahrain Insurance Association (BIA) was formed in 1993 and now boasts 43 members comprising local and
foreign insurance and reinsurance companies and insurance intermediaries. The BIA aims to interface with the
CBB on behalf of its members and seeks to promote both the insurance industry within Bahrain and Bahrain as a
regional insurance centre.
For more information on insurance regulation visit the BIA, CBB and Clyde & Co websites. Lloyd’s data from Xchanging.
Disclaimer
ECONOMY
SAUDI ARABIA: country dashboard
GDP 2008
USD 468BN
Agriculture
3%
400
Services
30%
NON-LIFE DWP 2008
USD 1.83BN
INSURANCE
356
384
469
Property
MAT
1%
3%
5%
EASE OF DOING BUSINESS: 16th worldwide
4%
GLOBAL COMPETITIVNESS: 27th worldwide
3%
STRENGTHS: a strong financial position and an
economy opening up to foreign investment.
1%
0
0%
2006 2007 2008
CHALLENGES: conservative policies have
slowed the liberalisation of an economy strongly
dependent on the oil sector.
DWP SIZE IN USD BN
AND DWP GROWTH
2.0
1.83
1.5
Liability
Health 3% Motor
55%
36%
Misc
2%
GDP SIZE : 20th worldwide (UK ranks 6th)
2%
200
Industry
67%
OVERVIEW
GDP SIZE IN USD BN
AND GDP GROWTH
600
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OVERVIEW
SIZE: 43rd worldwide (UK ranks 3rd)
50%
40%
1.41
1.12
30%
1.0
20%
0.5
10%
0.0
0%
2006 2007 2008
TOP 5 INSURERS: Saudi Re, MedGulf, NCCI,
Bupa Arabia, Malath Cooperative. The NCCI has
a market share in excess of 40%.
KEY CLASSES: Health and motor due to their
compulsory nature. Claims ratio for the two
classes are reported to be consistently above the
Saudi Arabian insurance market average.
REINSURANCE: USD 0.93bn (2008)
GWP PENETRATION: ~ 0.6%
LLOYD’S
Motor
1% Property
35%
Liability
46%
MAT
46%
SIZE: 34th for Lloyd’s (UK ranks 2nd)
TOP 5 MAs: write 20% of non-life GWP
Misc
8%
Health
Misc 4%
8%
Motor
2%
Property
33%
MAT
10%
OVERVIEW
GWP SIZE IN USD M
AND DWP GROWTH
Liability
7%
120
40%
KEY CLASSES: MAT and property
30%
REINSURANCE: USD 80m (2008)
60
20%
GWP MARKET SHARE: ~ 3.6%
30
10%
93
90
100
72
0
0%
DISTRIBUTION
2006 2007 2008
DIRECT HANDLING: strong distribution channel. Most
insurance companies have their own direct sales forces.
BROKERS: strong distribution channel. Some major
international brokers licensed to do business in Saudi Arabia
are: AON, Marsh and Willis. All three have a ground presence.
INTERNET AND BANCASSURANCE: currently very weak
channels.
CATASTROPHES
click for basic
information
click for detailed
information
STATUS: direct license only for risks not covered
within Saudi Arabia. Cross border reinsurance
allowed. No permission to appoint coverholders.
NO OFFICE
REGULATIONS
NON-LIFE GWP 2008
USD 100M
COMPULSORY CLASSES: 3rd party
motor, professional indemnity for
insurance intermediaries, health
insurance for expatriates, workers'
compensation, medical malpractice
REGULATOR OF INSURERS AND
INTERMEDIARIES: www.sama.gov.sa
Susceptible to droughts (high) floods (medium) and epidemics (medium).
Market Intelligence data based on: Clyde & Co articles, Ernst and Young Takaful Report, Global Edge, Global
Opportunities, Lloyd’s crystal, Lloyd’s Xchanging, SAMA (Saudi Arabia Monetary Agency), Munich Re, World Economic
Outlook Database and worldwide market interviews. DWP = direct written premiums. GWP = gross written premium
(includes reinsurance). Claims ratio = claims as % of GWP earned from 2005 to 2008.
Disclaimer
OVERVIEW
SAUDI ARABIA: catastrophes
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Saudi Arabia is particularly susceptible to flooding, epidemics and sandstorms. The biggest economic impact and
loss of life is attributed to flooding, which in the last 15 years has killed over 300 people in 7 major events. The
most notable flood is that of 2009 in Jeddah, which killed over 120 people and caused losses estimated to exceed
USD 270m. Three epidemics in the last 15 years, focused around 2000-2001, killed approximately 200 people.
Sandstorms are a frequent occurrence, but rarely kill anyone and cause only minor damage to property.
SAUDI ARABIA: the insurance market (1)
TOTAL GWP SIZE (USD BN) AND GROWTH The Saudi insurance market is one of the fastest growing
INSURANCE TREND 2003-2015
3.0
40%
2.5
30%
2.0
1.5
20%
1.0
10%
0.5
0.0
0%
03
04
05
06
07
08
insurance markets in the world according to a 2009 report
by RNCOS (Research and Consultancy Solutions). The
strong steady growth has been on the back of compulsory
insurance implementations, which included compulsory
motor for foreign cars in 2002 and compulsory health
insurance for expatriates in 2006. Additions to compulsory
health insurance will include an extension to all Saudis
working in the private sector in 2010 and an extensions to
all Saudi nationals in the near future.
Notwithstanding the current financial crisis, the 2009 report on the Saudi insurance market by RNCOS forecasts
a 13% annual growth between 2009 and 2013. This should lead to an insurance market worth approximately
USD 5bn by 2013. This contrasts with SAMA estimates of a Saudi insurance market worth approximately USD
8bn in 2015.
TAKAFUL
TAKAFUL is an Islamic insurance concept compliant with Shari’ah Law, whose operations are based upon
principles of mutuality. Takaful arrangements are based on two unilateral contracts, whereby a participant gifts
their contribution to the takaful fund and is then gifted the amount of their claim in the event of a loss.
Participants’ contributions must be segregated from the assets of the takaful operator and the participant retains
an interest in the takaful fund. The takaful operator then manages the takaful fund on behalf of the participants,
sharing back possible resulting surpluses amongst the participants.*
CHALLENGES: some potential issues that takaful may face going forward include: the lack of sufficient Shari’ah
compliant investments resulting in a undiversified investment portfolio, a lack of (insurance) qualified Shari’ah
scholars and sales personnel, a lack of diversified distribution channels such as the internet and bancassurance
and uncertainty regarding the genuine Shari’ah compliance of takaful operations and product offerings.
OPPORTUNITIES: global takaful contributions are currently estimated to be less than 1% of total worldwide
written premiums every year, despite the fact that Muslims account for approximately 25% of the world’s
population. Although there are questions with regards to the proportion of this population accessible to insurers,
the potential market for takaful remains large.
Market Intelligence data based on figures from SAMA, UNEP and articles from Clyde & Co. * For more information on takaful read “Takaful
Q&A” and “The future of takaful” from Clyde & Co along with Ernst and Young’s “Takaful Report 2009”.
Disclaimer
SAUDI ARABIA: the insurance market (2)
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KEY CLASSES in Saudi are health and motor, which together account for approximately 70% of all written
premiums (GWP). Lloyd’s two key classes are MAT and property, which together account for approximately 80%
of all written premiums (GWP) at Lloyd’s. Interestingly, Lloyd’s two largest classes are two of Saudi’s smallest
classes, whilst Lloyd’s two smallest classes (health and motor) are Saudi’s two largest classes.
HEALTH is expected to be the fastest growing class due to future extensions in its compulsory nature to include
Saudi nationals. It is a competitive market used by many insurers to gain entry into other markets and is
characterised by claims ratios which are consistently above the Saudi average across all classes…
KEY CLASSES
MOTOR is a developed and competitive market which is expected to continue to grow in size. Again, the claims
ratios for motor are consistently above the Saudi average across all classes…
This is believed to be due to
comparatively low driving standards across the region.
LIABILITY is yet to take off across the region. This is believed to be due to a number of factors including a
general lack of regulatory requirements and a culture characterised by low litigiousness levels. However, liability
is expected to emerge as a considerable opportunity (along with energy) as the number of expatriates in the Gulf
region is expected to grow in the medium term. Claims ratio for liability are consistently below the Saudi average
across all classes…
PROPERTY premiums in the Gulf region are believed to be extremely competitive compared to those charged in
international markets. Notwithstanding this, claims ratios for property are consistently below the Saudi average
across all classes…
MAT includes such risks as supertankers, construction barges and airlines. At 47%, this is Lloyd’s largest class.
Claims ratio for MAT are consistently above the Saudi average across all classes….
The following slide provides information for all (Saudi) insurance classes on GWP size, the split of GWP between
retained and ceded premium, the size and growth of the class and the claims ratio for that class over the period
2005-2008. All presented data is based on SAMA reports.
REINSURANCE
Ceded
33%
Retained
67%
The combination of large risks to be insured and the low levels of local capacity result in
low retention levels across Saudi, with approximately a third of all written premiums
being ceded to reinsurers in 2008. The vast majority of reinsurance within the gulf
region is written on a proportional treaty basis. The rest is written on a facultative basis
and is largely predominant within the construction and energy industry.
The Cooperative Insurance Regulations ( ) state that Saudi brokers must first seek to place business with
licensed Saudi reinsurers before placing with foreign insurers not licensed in Saudi. This introduces a significant
competitive advantage to locally registered reinsurance companies. In 2009, Saudi Re is the sole licensed
reinsurer in Saudi.
Lloyd’s two key classes (MAT and property) are the two classes within Saudi with the highest ceded premium
proportion at 75% and 89%, respectively.
Market Intelligence data based on figures from SAMA, articles from Clyde & Co and 2006 reports from worldwide markets entitled “Interviews in
London” and “Interviews in Dubai”.
Disclaimer
CLASS OVERVIEW
SAUDI ARABIA: classes of business
GWP 2008 GWP SIZE (USD BN) & GROWTH
CLAIMS RATIO
3.0
40%
2.76
USD 2.76BN
100%
Property 8%
Liability 5%
MAT 7%
Health
46%
Misc
9%
Motor
25%
30%
1.79
20%
1.0
10%
0.0
0%
80%
60%
40%
20%
0%
30
20
Ceded
89%
22
22
25
20%
15%
10%
Retained
11%
10
5%
0
0%
LIABILITY
80
60
Ceded
59%
58
58
20%
40
0%
20
Retained
41%
USD 0.20BN
0
100%
80%
60%
40%
20%
0%
-20%
55
MAT
40
40%
20%
20
Retained
25%
USD 0.68BN
0
Ceded 5%
Retained
95%
0%
100%
80%
60%
40%
20%
0%
800
40%
613
656
30%
484
400
20%
200
10%
0
0%
100%
80%
60%
40%
20%
0%
MISCELLANEOUS
40
30
Ceded
87%
33
22
27
60%
40%
20
Retained
13%
20%
10
0
0%
100%
80%
60%
40%
20%
0%
Ceded
22%
Retained
78%
1000
800
600
400
200
0
1001
642
492
38%
39%
Claims ratio are reported to be consistently
medium (between 40% and 50%).
OVERVIEW
Property is a small class (8%) of which Lloyd’s
writes a significant proportion of GWP (15%);
Claims ratio for property are reported to be
consistently below national average across all
classes.
Approximately half of liability GWP is ceded;
Liability is the smallest class (5%) with erratic
growth;
29%
29%
17%
Claims ratio for liability are reported to be very
low and consistently below the national
average across all classes.
A high proportion of MAT GWP is ceded
(75%);
86%
50%
39%
80%
60%
40%
20%
0%
2006 2007 2008
Market Intelligence data based on figures from SAMA..
100%
80%
60%
40%
20%
0%
MAT is a small class (7%) of which Lloyd’s
writes a significant proportion of GWP (25%);
Claims ratio for MAT are reported to be
consistently above the national average
across all classes.
A very low proportion of motor GWP is ceded
(5%);
53%
59%
50%
Motor is a relatively large class (25%), aided
by its compulsory nature.
Claims ratio for motor are reported to be
consistently above the national average across
all classes.
A high proportion of miscellaneous GWP is
ceded (87%);
48%
29%
26%
2006 2007 2008
2006 2007 2008
USD 1.29BN
39%
2006 2007 2008
2006 2007 2008
USD 0.24BN
Growth has been strong due to growing
insurance awareness and the introduction
of compulsory insurance classes;
A high proportion of property GWP is ceded
(89%);
2006 2007 2008
2006 2007 2008
600
MOTOR
34
Key classes in SA are health and motor
following the introduction of compulsory
motor and health insurance;
2006 2007 2008
46
Ceded
75%
100%
80%
60%
40%
20%
0%
2006 2007 2008
60
41%
2006 2007 2008
40%
65
52%
CLAIMS RATIO
200620072008
USD 0.14BN
42%
2006 2007 2008
DWP SIZE (USD M) & GROWTH
USD 0.21BN
PROPERTY
2.20
2.0
2006 2007 2008
GWP 2008
HEALTH
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Miscellaneous is a small class (9%) with good
growth;
Claims ratio for miscellaneous are reported to be
consistently below the SA average across all
classes.
A high proportion of health GWP is ceded
(78%);
56%
62%
59%
2006 2007 2008
Health is the largest class (46%), aided by its
compulsory nature. Lloyd’s however, writes a
very small proportion of GWP (1%);
Claims ratio for health are reported to be
consistently above the SA average across all
classes.
Disclaimer
SAUDI ARABIA: Lloyd’s position
LLOYD’S GWP SIZE (USD M) AND GROWTH
120
40%
30%
20%
10%
0%
-10%
-20%
-30%
100
80
60
OVERVIEW
40
20
0
02
03
04
05
06
07
08
Back To > Country Dashboard
CLASS GWP AS % OF TOTAL DWP
LIABILITY
70%
60%
PROPERTY
50%
MAT
40%
MOTOR
30%
20%
MISC
HEALTH
10%
0%
01 02 03 04 05 06 07 08
Lloyd’s GWP growth since 2002 has been erratic, although largely it has been positive and in excess of 10%.
CAGR since 2002 has been approximately 15%.
The chart on the right illustrates how the different classes have been fairing within Lloyd’s, as a percentage of
total GWP written by Lloyd’s, from 2001. GWP from Lloyd’s two key classes (MAT and property) is very
erratic. Furthermore, Lloyd’s GWP in Saudi’s two largest classes (health and motor) is, and always has been,
very low.
The Lloyd’s market is fairly consolidated in terms of managing agents, with the top 10 bringing in
approximately 30% of GWP. The top 10 brokers however, only place approximately 5% of GWP (2008).
SAUDI ARABIA: regulations
SAMA
Until the implementation of the Cooperative Insurance Regulations (CIR) in 2004, the Saudi Insurance market
was unregulated and largely dominated by Saudi Arabia’s former state monopoly provider the NCCI (National
Company for Cooperative Insurance). The NCCI is now known as Tawuniya, and in 2007 still controlled
approximately 22% of the total insurance market premium.
The introduction of the CIR by SAMA has acted as a catalyst for rapid premium growth within the country. SAMA
is keen to promote the growth of a properly regulated insurance market within Saudi Arabia as part of a wider
policy aimed at encouraging foreign investment in the country.
CIR
All insurance companies and insurance intermediaries must be licensed through SAMA. New entrants into the
Saudi insurance market are apparently being encouraged by SAMA to consider merging with an existing licensed
Saudi insurer as a means of entering the market. In 2009, 29 Saudi insurers were registered as licensed through
SAMA.
The CIR state that insurance must be offered on a cooperative basis “in accordance with the Islamic Shari’ah”.
The CIR then points to the NCCI’s articles of association as guidance for what constitutes a cooperative basis,
although the latter do not set out a detailed framework. The only set requirement would seem to be that a
company must maintain separate profit and loss accounts for policyholders and for shareholders, and that there
must be a distribution of part of the net surplus from the insurance operations amongst policyholders.
For more information on insurance regulation read ‘Insurance in the Kingdom of Saudi Arabia by Clyde & Co and visit the SAMA website.
Lloyd’s data from Xchanging.
Disclaimer
QATAR: COUNTRY DASHBOARD
ECONOMY
GDP 2008
USD 102BN
GDP SIZE IN USD BN
AND GDP GROWTH
120
Services
23%
80
Industry
77%
Back To > Regional Dashboard
102
71
57
40
0
OVERVIEW
GDP SIZE : 57th worldwide (UK ranks 6th)
40%
EASE OF DOING BUSINESS: 37th worldwide
30%
GLOBAL COMPETITIVNESS: 26th worldwide
20%
STRENGTHS: top exporter of natural gas with a
per capita income amongst the world’s highest.
10%
CHALLENGES: an economy dependent both on
gas prices and foreign labour.
0%
2006 2007 2008
Motor
14%
GWP SIZE IN USD BN
AND GWP GROWTH
1.2
0.93
0.9
MAT
14%
75%
LLOYD’S
Health 1%
MAT
10%
Misc
8%
Motor
1% Property
35%
Liability
46%
MAT
65%
Property
26%
25%
0.0
0%
REINSURANCE: USD 0.5bn (estimate 2008)
50%
0.51
GWP PENETRATION: ~ 0.9% (2008)
OVERVIEW
GWP SIZE IN USD M
AND DWP GROWTH
80
69
60
40
SIZE: 55th for Lloyd’s (UK ranks 2nd)
100%
63
39
50%
0%
Liability 8% 20
0
-50%
DISTRIBUTION
2006 2007 2008
DIRECT HANDLING is the major distribution channel for
non-life business especially major energy risks.
BROKERS are a recently developed distribution channel
subject to stringent regulations and not incorporated into the
Insurance Decree. Main international brokers licenced in
Qatar are Aon, HSBC, Marsh, Nasco and Nexus.
BANCASSURANCE is a growing distribution channel.
CATASTROPHES
click for basic
information
click for detailed
information
TOP 5 INSURERS: Qatar Ins Co, Qatar General
Ins & Reins, Al Khaleej Ins Co, Qatar Islamic Ins
Co, Doha Ins Co. Control 89% of market share.
0.3
0.46
2006 2007 2008
NON-LIFE GWP 2008
USD 38.8M
SIZE: 57th worldwide (UK ranks 3rd)
KEY CLASS: Property. Given the size of the
property share it is possible that it also includes
any liability and miscellaneous premiums.
0.6
Property
72%
100%
OVERVIEW
TOP 5 MAs: write 21% of non-life GWP
KEY CLASSES: MAT and property
REINSURANCE: USD 38m (2008)
GWP MARKET SHARE: ~ 4.2% (2008)
STATUS: no direct licence with reinsurance on a
cross-boarder basis only. Appointment of coverholders is not permitted in Qatar.
NO OFFICE
REGULATIONS
INSURANCE
NON-LIFE GWP 2008
USD 0.93BN
COMPULSORY CLASSES: 3rd party
liability for motor, professional indemnity
for architects, energy consultants and
engineers and liability insurance for
aircraft hulls.
REGULATOR OF INSURERS AND
INTERMEDIARIES: www.qfcra.com
Susceptible to droughts (high), floods (medium) and earthquakes (medium).
Market Intelligence data based on: Clyde & Co articles, Global Edge, Global Opportunities, Lloyd’s Crystal, Lloyd’s
Xchanging, Munich Re, QFCRA, Qatar Insurance and Reinsurance Review 2008, Standard & Poor’s, Swiss Re Sigma and
the World Economic Outlook Database. DWP = direct written premiums. GWP = gross written premium (includes
reinsurance). Claims ratio = claims as % of GWP earned from 2005 to 2008.
Disclaimer
QATAR: THE INSURANCE MARKET
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THE ECONOMY. GDP growth in Qatar over the last 5 years has been strong in excess of 10% annually. In
per capita terms, Qatar now has one of the highest levels of GDP in the world. Although strong GDP growth is
a recognised driver for a growing insurance market, the size of the insurance market in Qatar will eventually
be capped by the (small) size of the population. A report on the Qatar insurance market (2009) by Standard &
Poor’s concludes however, that the Qatar insurance market represents an attractive long-term prospect for
insurers.
OVERVIEW
MAT. Qatar is developing into a regional hub for marine and aviation transport and infrastructure spending is
high. The growth of the marine and aviation transport sector is of great interest, as Lloyd’s is estimated to
have written nearly 20% of Qatar MAT premium in 2008.
HEALTH. The possible future introduction of compulsory health insurance for expatriates would boost the
health insurance sector. This sector is currently non-existent due to free state healthcare available to all Qatar
residents – a factor likely to inhibit the growth of health insurance within Qatar.
MOTOR. Motor is a relatively small class in Qatar and is currently not very profitable due to low fixed tariffs on
compulsory third-party vehicle liability. Motor insurance accounts remain however the principal point of
contact between insurers and the vast majority of their retail customers.
LOCAL INSURERS. These have been making a concerted effort in the last few years to develop an
international dimension to their operations.
TAKAFUL. The proportion of the insurance market controlled by takaful insurers is unknown, although it is
interesting to note that all local insurers either have a takaful branch or are in the process of establishing a
takaful branch in the country.
REINSURANCE. The 5 top insurers in Qatar control approximately 90% of the market premium and in the last
few years have ceded to foreign reinsurers approximately 60% of their premiums. The size of the reinsurance
market within Qatar is hence estimated at USD 500m in 2008. This heavy reliance of local insurers on foreign
reinsurers is particularly common for large industrial and commercial risks such as marine, aviation and
energy.
Market Intelligence data based on Clyde & Co articles, ‘The Qatar Insurance Review’ by the QFCA and the ‘The Qatar Insurance Sector in
2009’ by Standard & Poor’s
Disclaimer
QATAR: Lloyd’s position
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LLOYD’S GWP SIZE (USD MN) AND GROWTH
80
200%
60
150%
100%
40
50%
OVERVIEW
20
0%
0
-50%
02 03 04 05 06 07 08
LIABILITY
PROPERTY
MAT
MISC
HEALTH
CLASS GWP AS % OF TOTAL DWP
100%
80%
60%
40%
20%
0%
01 02 03 04 05 06 07 08
Lloyd’s GWP growth since 2002 has been very erratic, with years of strong growth followed by periods of decline.
CAGR since 2002 has been approximately 5%
The chart on the right illustrates how the different classes have been fairing within Lloyd’s, as a percentage of
total GWP written by Lloyd’s, from 2001. Lloyd’s two key classes (MAT and property) have been fairing erratically
since 2001, which may be due sizeable rate changes in both classes. In the last four years MAT GWP (as a
proportion of Lloyd’s total GWP) has been on the decline, whilst property and liability have been on the rise.
Health and miscellaneous have always been extremely small classes.
Lloyd’s top 10 managing agents write approximately 30% of GWP, whilst Lloyd’s top 10 brokers place
approximately half of Lloyd’s GWP.
QATAR: regulations
QFCRA
The Qatar Financial Centre (QFC) was established in 2005 along similar lines to the Dubai International
Financial Centre (DIFC). International insurers currently registered at the QFC include AXA, AIG and Zurich.
Foreign firms operating in or from the QFC can be 100% foreign owned and are allowed to write local business
directly. Note that neither the Bahrain Financial Harbour nor the Dubai International Financial Centre allow
registered foreign insurers to write local business directly.
The QFC Regulatory Authority regulates financial services firms that operate in, or from, the QFC. The
regulatory structure imposed by the QFCRA is closely based on that of the UK’s Financial Services Authority
and the QFCRA has published detailed rulebooks covering insurers and insurance mediators. The regulatory
structure imposed by the QFCRA contrasts with the existing regulatory regime applied internally to local insurers
within Qatar (outside the QFC) by the Ministry of Finance, Economy & Commerce. A unified regulator is
expected by many towards the end of 2010.
QATAR: regulations
For more information on insurance regulation visit the QFCRA website . Lloyd’s data from Xchanging.
Disclaimer
UAE: COUNTRY DASHBOARD
GDP 2008
USD 262BN
ECONOMY
Agriculture 2%
GDP SIZE IN USD BN
AND GDP GROWTH
300
200
Services
36%
Industry
62%
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262
164
180
100
EASE OF DOING BUSINESS: 46th worldwide
15%
GLOBAL COMPETITIVNESS: 31st worldwide
10%
STRENGTHS: an international hub for trade with
a competitive business environment.
0%
2006 2007 2008
INSURANCE
NON-LIFE GWP 2008
USD 4.08BN
Health
14%
Property
17%
Misc
18%
MAT
16%
Motor
35%
NON-LIFE GWP 2008
USD 145M
GDP SIZE : 36th worldwide (UK ranks 6th)
20%
5%
0
OVERVIEW
GWP SIZE IN USD BN
AND GWP GROWTH
CHALLENGES: an economy dependent on oil
and property investment; exposed to external
and more recently internal shocks and a scarcity
of available financial data.
OVERVIEW
SIZE: 38th worldwide (UK ranks 3rd)
5
40%
4.08
4
3
30%
3.25
2.36
20%
2
TOP INSURERS: Oman Ins Co, ADNIC, Islamic
Arab, Arab Orient and Al Ain Ahlia are estimated
to have a 33% market share.
KEY CLASS: motor due to its compulsory nature.
1
10%
0
0%
2006 2007 2008
REINSURANCE: N/A
GWP PENETRATION: ~ 1.6% (2008)
OVERVIEW
GWP SIZE IN USD M
AND DWP GROWTH
SIZE: 24th for Lloyd’s (UK ranks 2nd)
MAT
10%
145
Misc
8%
121
Motor
1% Property
35%
Liability
46%
84
50%
40%
30%
20%
10%
0%
2006 2007 2008
The market for major risks is dominated by direct sales in
Abu Dhabi and international brokers in Dubai. Government
business in the emirates is always put out to tender.
Bancassurance and the internet are weak channels.
International brokers such as Aon, Heath Lambert, HSBC,
Marsh and Willis dominate the broker channel within the
emirates.
CATASTROPHES
click for basic
information
click for detailed
information
KEY CLASSES: MAT and property
REINSURANCE: USD 97m (2008)
GWP MARKET SHARE: ~ 3.6% (2008)
STATUS: no direct licence with reinsurance on a
cross-border basis only. Appointment of coverholders is not permitted in the UAE.
NO OFFICE
REGULATIONS
DISTRIBUTION
LLOYD’S
TOP 5 MAs: write 19% of non-life GWP
160
Health 6%
Motor
Property
120
5%
20%
80
Liability
40
13%
MAT
0
55%
COMPULSORY CLASSES: 3rd party
liability for motor, professional indemnity
for insurance intermediaries and health
for expatriates.
REGULATOR OF INSURERS AND
INTERMEDIARIES:
www.government.ae/gov
Susceptible to droughts (high), earthquakes (medium) and floods (medium).
Market Intelligence data based on: Clyde & Co articles, Global Edge, Global Opportunities, Lloyd’s Crystal, Lloyd’s
Xchanging, Munich Re, Swiss Re Sigma, UAE Interact and the World Economic Outlook Database. DWP = direct written
premiums. GWP = gross written premium (includes reinsurance). Claims ratio = claims as % of GWP earned from 2005 to
2008.
Disclaimer
OVERVIEW
UAE: insurance market
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MARKET GROWTH. Over the last decade, the growth in the UAE insurance market has been driven by the
introduction of compulsory motor insurance, the boom in the construction and real estate sector and the recent
introduction of compulsory health insurance for expatriates. The CAGR since 2005 has been strong at over
30%, and the UAE insurance market is currently the largest insurance market in the GCC. Growth is however
expected to slow down in the near future following weak sales in 2009 and the current economic challenges, as
less new cars and homes were sold and construction projects delays and cancellations set in. What future
growth will occur is expected to be led by the health, property and engineering sectors but will, in the long term,
ultimately be capped by the limited population of the UAE.
MARKET COMPOSITION. The breakdown of the insurance market is fairly even between all classes. Motor is
slightly larger due to its compulsory nature whilst there is currently a limited market for liability, most possibly
due to the low litigiousness characteristic of the region. Takaful insurance accounted for approximately 20% of
GWP in 2008. Although the proportion of premiums ceded to reinsurers is unknown, it is believed to be
shrinking with respect to that ceded in the past.
DIFC
THE DIFC. The Dubai International Financial Centre was established in 2004 and since then has attracted some
major international insurance players including Alliance, Aon, JLT, Generali, Gulf Re, Lockton, Marsh and Tokio
Marine as well as Lloyd’s Watkins. Firms operating within the DIFC are regulated by the Dubai Financial
Services Authority (DFSA), whose current aim is to bring its regime in line with that of other global insurance
markets.
RESTRICTIONS. Currently there are no restrictions with regards to 100% foreign ownership of firms within the
DIFC. Although foreign firms based in the DIFC can currently operate only on a reinsurance basis for local UAE
risks, this restriction is expected to be relaxed in the near future.
LLOYD’S STATUS. For direct insurance purposes, Lloyd’s may appoint coverholders to write both DIFC based
risks and non UAE based risks. For reinsurance purposes, Lloyd’s can either operate on a crossborder basis or
appoint coverholders to write UAE and DIFC based risks. All coverholders must first be approved by the DFSA.
For more information on the insurance market in the UAE visit UAE interact, Clyde & Co and the Sigma Re website. Information on Lloyd’s
status from Lloyd’s Crystal.
Disclaimer
UAE: Lloyd’s position
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LLOYD’S GWP SIZE (USD MN) AND GROWTH
160
100%
60%
LIABILITY
120
40%
PROPERTY
80
20%
MAT
40
0%
CLASS GWP AS % OF TOTAL DWP
80%
60%
40%
MISC
20%
OVERVIEW
HEALTH
0
-20%
02 03 04 05 06 07 08
0%
01 02 03 04 05 06 07 08
Lloyd’s GWP growth since 2002 has been erratic, although largely it has been positive and in excess of 20%.
CAGR since 2002 has been in excess of 20%.
The chart on the right illustrates how the different classes have been fairing within Lloyd’s, as a percentage of
total GWP written by Lloyd’s, from 2001. Lloyd’s key class (MAT) has always contributed the majority of Lloyd’s
GWP, although its contribution has been on the decline since 2004. Classes which have instead been increasing
in GWP contribution since 2004 are health and property.
Lloyd’s top 10 managing agents write approximately 30% of GWP, whilst Lloyd’s top 10 brokers place
approximately 40% of Lloyd’s GWP
Data on Lloyd’s from Xchanging.
Disclaimer
Appendix: Lloyd’s Data Limitations
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Please note the information contained in this document is based upon data collected from Xchanging and
may be incomplete for some classes of business; for instance a substantial figure, which is missing from the
REG 258 data set is comprised of UK Motor, which is not processed by Xchanging.
Gross Premiums: Original and additional inward premiums, plus any amount in respect of administration fees
or policy expenses remitted with a premium but before the deduction of outward reinsurance premiums.
Lloyd’s figures are based on gross written premiums based on figures processed by Xchanging by processing
year and country of origin.
Country of Origin: denotes the country from where demand for the insurance / reinsurance emanates; i.e. the
coverholder or policyholder, irrespective of the country to which the risk is classified for regulatory reporting
purposes.
Processing Year: relates to the calendar year in which the premium, additional or return premium is
processed by Xchanging, irrespective of the actual underwriting year of account of the risks (which is
determined by the inception date of each risk).
Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by
Country Of Origin, but French for regulatory reporting purposes. Similarly a risk incepting on 1st December
2007 would be classified at 2007 underwriting year of account but may not be processed by Xchanging until
2008 and so be allocated to the 2008 processing year
Disclaimer
Disclaimer
This document is intended for general information purposes only. Whilst all care has been taken to ensure the
accuracy of the information Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not
accept any responsibility or liability for any loss to any person acting or refraining from action as a result of, but not
limited to, any statement, fact, figure, expression of opinion or belief obtained in this document.