The event, sponsored by Zurich Insurance Company (ZIC), attracted executives and professionals from within the sector and throughout the UAE.

Founded in November 2010 by Laura Mellstrom, a solicitor at international insurance law firm Kennedys, the association has grown from six members to 50 in four months.  It includes a broad spectrum of professionals from within both the public and private sectors representing the UAE’s business community including the healthcare, energy, construction, life and financial services sectors. Aimed at professional women, the association offers its members the opportunity to meet and network with likeminded women from across the insurance industry.

“March 8 was the first in a series of proposed quarterly events which will be held throughout the year and we very much hope to include professional speakers to talk about a host of topical issues. Another priority is to look at creative ways of supporting local women’s charities,” Laura said in a statement.

The agreement was signed by Khalid Al Sheikh Mubarak, Deputy Director General of the DHA and Carl J. Sardegna CEO of Green Crescent Insurance Company.

Mubarak highlighted the importance of this agreement which reflects DHA’s commitment to foster public-private partnerships, “At the DHA, it is our mission to provide the best possible health services to the people living and working in Dubai as well as visitors who come to the UAE. Our facilities provide expert and specialised care especially in certain medical fields like maternity and child care and we are glad to extend our services to the members of Green Crescent Insurance Company.”

Sardegna explained, “Our philosophy is to offer our members choice and by adding such outstanding and well-regarded facilities offered by DHA hospitals, we will enhance our product offerings.”

With the agreement, the extended warranty on all vehicles financed by KFH-Bahrain will come with five years and will cover all mechanical and electrical components thus enhancing the residual value of the vehicle, said a press statement.

Gapcorpprovides a basket of products and services in each of the GCC markets, Europe, South East Asia and the Americas. The extended warranty will be a duplicate of the manufacturers’ warranty for electrical and mechanical components and will cover the vehicles during the most crucial time required – after the expiry of the original manufacturers’ warranty.

Gapcorp already has a joint venture with Zuellig Group, one of the largest privately-held companies in South East Asia covering Thailand, Philippines, Singapore, Hong Kong, Malaysia and Indonesia under Asia Warranty Services and in the Gulf Cooperation Council Countries under GapGulf and in Europe through its European arm, the UK-based Euro Warranty.
Gapcorp subsidiary Latin American Extended Services has a joint venture with Mexican conglomerate Qualitas Insurance and Mexbrit and in North America.

Under the mutual partnership, ADCB and Adnic will provide high quality customer service and value to ensure that both their customers have consistent support and positive experience with their banking and insurance services.

ADCB will provide Adnic with an array of services to include medical claim payments, collections of premiums, detailed reporting and management of post-dated checks. Adnic will have access to all services on ADCB’sInternet banking as well as host-to-host channels.Adnic offers its bank assurance products through ADCB SME franchise.

Adnic CEO WalidSidanisaid: “Adnic is looking forward to this mutually strategic partnership with ADCB as we always seek to better serve our customers and provide them with excellent customer care. This partnership is aligned with Adnic’s strategic pillar of being “customer centric” to provide better services to our valued customers.”

Attracting global players and established national businesses ensure Qatar is better positioned than most to ride out the global economic crisis.

Market size
Qatar is better positioned than most to ride out the global downturn, thanks to a thriving energy sector – and a formidable infrastructural investment programme. Underpinning the government’s diversification strategy is the development of the Qatar Financial Centre (QFC), which has attracted a steady stream of global insurance players. Recent market entrants include Mitsui Sumimoto Insurance Company and a wave of new brokers.

The government-driven sector helped total gross written premiums break the US$1bn mark in 2008, although premium growth was static or marginal in 2009.

Little progress has been made in developing the personal lines sector although this may change with the increasing focus being given to takaful (led by Qatar Islamic Insurance) and the expected introduction of compulsory health insurance for expatriates. Until now, health insurance has not featured heavily in the portfolios of domestic insurers due to the availability of cheap government healthcare. Motor remains a staple of premium volumes but low-fixed tariffs on motor third- party liability is giving insurers problems.

The creation of a captive insurer, Al Koot, by Qatar Petroleum in 2003, may have reduced the energy company’s insurance expenses and given it direct access to the global reinsurance market. However, the move also potentially placed a substantial proportion of the country’s premium income beyond the reach of the national insurers’, although, in practice, Al Koot seems prepared to continue to share some of this premium locally.

Competitive conditions
Although the Qatar Financial Centre (QFC) has attracted global players, such as Axa, to the scene, Qatar’s established national insurers have strong competitive positions in the domestic market. Qatar Insurance Company (QIC) dominates the market, controlling nearly half of total market premiums.

Qatar General Insurance & Reinsurance Company has an approximate market share of 28 per cent, while Khaleej Insurance & Reinsurance, Doha Insurance and Qatar Islamic Insurance are also significant players. Long-term foreign companies with a presence in the market include: Arabia Insurance, Libano-Suisse Insurance and National Insurance Company of Egypt.

More and more players are looking to invest in the nascent takaful segment, with all existing national players having already set up a takaful operation or in the process of doing so. QIC will hold a 25 per cent stake in Al Dhaman Islamic Insurance, while Al Jisr Takaful Company has been set up as a joint venture between Qatari and Bahraini investors. More recently, Italian insurer Generali, Qatar Islamic Bank (QIB) and broker Beema have begun discussions on a takaful joint venture.

Recent developments
The QFC has issued licences in the past year to: Japanese insurer – Mitsui Sumitomo Insurance Company, reinsurance broker – Chedid & Associates Qatar, takaful operators – T’azur Company and Allianz Takaful, plus SEIB Insurance and Reinsurance Company. The number of insurers operating from the QFC is 10 and the number of insurance intermediaries, nine.

Regulatory overview
Insurance regulator: Ministry of Business and Trade.
Governing legislation: Decree 1 of 1966.
Capital requirements: Branch – INR2m for foreign insurers (in Decree 1 of 1966).
Locally domiciled insurer – INR1.5m rupees for local insurers (in Decree 1 of 1966).
Foreign ownership restrictions: Branch – N/A.
Locally domiciled insurer – foreign ownership limited to 25 per cent and only with approval from the Council of Ministers.
There continues to be two distinct insurance regulatory regimes in place in Qatar, namely the original insurance regulatory regime administered by the MBT and the new Qatar Financial Centre (QFC) regime established in 2005 (discussed below).
There are plans for a unified financial services regulatory regime.

Insurance regulator: Qatar Financial Centre Regulatory Authority (QFCRA).
Governing legislation: QFCRA Prudential Insurance Rulebook (PINS).
Capital requirements: Branch and locally domiciled insurer – higher of (a) US$10m for direct insurers and US$20m for reinsurers; and (b) the QFCRA’s risk-based capital calculation (requirement to hold locally may be waived).
Foreign ownership restrictions: Branch and locally domiciled insurer – 100 per cent foreign ownership permitted.

New entrants into the Qatar insurance market tend to operate from the QFC and will be subject to regulation by the QFCRA. There is no restriction on direct insurance into the market for QFC insurers.

Although composite insurance is not permitted, an insurer can conduct long-term insurance business as well as general insurance business, but only where the general insurance business carried on is restricted to accident and sickness cover.

Regulatory overview provided by Clyde & Co

The next phase of the market’s evolution will be driven by the next steps of the new Insurance Authority.

Market size
The UAE insurance market, totalling AED18.3bn in premium, is notable for its size, not only compared to its smaller neighbours, but also other Arab countries across the MENA region.

Property and casualty gross written premiums grew by 31 per cent to AED15.6bn in 2008, while underwriting premiums for life insurance and accumulation of funds operations amounted to AED2.7bn.

The total shareholders’ equity in the national insurance companies amounted to AED12.3bn (2008), while the total invested funds were AED21.6bn, 45 per cent of which was in the form of shares and bonds, followed by 34.2 per cent as deposits.

The number of employees in the insurance companies operating in the UAE in 2008 was 6,687 – out of which there were 412 UAE nationals.

Competitive conditions
The UAE is served by 29 national insurance companies and 27 foreign insurance companies. Of the AED2.7bn in total life premium in the market, national companies only accounted for 32.8 per cent of the pie while foreign companies (such as ALICO) accounted for 67.2 per cent. In contrast, national companies took a 77.4 per cent of the property and casualty premium in the market (valued at AED15.6bn), compared to a 22.6 per cent share for foreign companies.

The emirate of Dubai and the emirate of Abu Dhabi are the key markets in the UAE and are quite distinct in terms of competitive conditions. With its base in Dubai, Oman Insurance Company (OIC) is the country’s leading insurer by premium volume (commanding a market share of nearly 15 per cent) and profitability. Abu Dhabi National Insurance Company (ADNIC) is the dominant player in Abu Dhabi. Other major UAE players include Al Ain Ahlia and Arab Orient. Foreign companies with a strong presence in the underpenetrated personal lines segments include RSA and Axa. The government-backed National Health Insurance Co (Daman) dominates the burdgeoning health insurance market in Abu Dhabi. It is unclear whether Dubai will eventually implement a similar compulsory health insurance scheme to the one in place in Abu Dhabi.

New market entrants over the past two years have tended to be takaful operators. Established players such as Abu Dhabi National Takaful and Dubai Islamic Insurance & Reinsurance (AMAN) have recently been joined by Noor Takaful, Takaful House, Al Hilal Takaful and Methaq Takaful. For now, the registration and licensing of new insurance companies has been suspended by the new Insurance Authority (IA) of the UAE.

Recent developments
After an incubation period since it was established in 2007, the IA is set to flex its supervisory muscles and implement a range of new codes and regulations in 2010. The IA will soon begin collecting annual fees from insurance companies calculated on the basis of a percentage of the annual premium written, less local reinsurance premiums. Insurers are expected to submit their premium details for the period June 29, 2009, to December 31, 2009, before the end of January 2010 to allow the authority to calculate the fee payable for the first period.

Looking ahead, the IA has listed on its website a number of “professional”, “technical” and “financial” regulations that are under consideration, dealing with:
. The share capital of insurance companies
. The calculation of technical reserves
. Solvency margins
. Regulations regarding the principles of investment of policyholder’s rights
. Anti-money laundering and anti-terrorism regulations
. Insurance company records
. Accounting requirements

Regulatory overview
Insurance regulator: Insurance Authority
Governing legislation: Federal Law No 6 of 2007.
Capital requirements: Branch and locally domiciled insurer – currently AED50m (US$14m) but recently increased to AED100m (US$28m) for insurers and AED250m (US$70m) for reinsurers – existing re/insurers have 3 years to comply. Insurance Authority guarantee of between AED2m and AED6m required.
Foreign ownership restrictions: Branch – 100 per cent foreign ownership permitted.

Locally domiciled insurer – foreign ownership limited to 25 per cent. Insurers must be registered with the Insurance Authority to underwrite direct insurance of UAE-based risks. There is no restriction on foreign companies writing reinsurance of UAE cedants.

A UAE insurer can undertake either “general insurance” or “life insurance” in the UAE. Composite insurance is no longer permitted. There are no separate regulations for takaful business. An indefinite moratorium on processing all new insurance and broker licence applications is in place.

The market is limited to insurers and brokers already licensed by the Insurance Authority. The UAE Insurance Authority has recently started issuing new regulations under Law 6 of 2007 and further regulations are expected in 2010.

Regulatory overview provided by Clyde & Co

The regulatory transformation of the Saudi insurance sector gathers pace as more insurers are licensed and competition intensifies, with health insurance fuelling growth.

Market size
The Saudi insurance market grew by 27 per cent over 2008 as gross written premiums hit SAR10.9bn. The latest industry report from SAMA revealed that growth continues to be driven by the spread of compulsory health insurance, which now represents the largest class of business in the market (44 per cent) at SAR3.1bn. Motor was the second largest class of business, accounting for 23 per cent of market premiums, followed by property (seven per cent), engineering (six per cent) and marine (six per cent). Protection and saving insurance may be starting from a miniscule base, but it’s projected to grow at a CAGR of around 55 per cent during 2009 to 2013.

A recent report from Standard & Poor’s acknowledged the further commercial potential for insurers in the healthcare sector, but highlighted that this segment appears to be already well-served on a direct basis by the existing leading insurers, and by specialist health providers such as BUPA Arabia.
Yet even those existing insurers that lack sufficient infrastructure to administer a large health book on their own often feel it necessary to offer the line as an accommodation to their larger corporate clients. They have almost invariably achieved this through the extensive use of third-party administrators, of which about half a dozen already operate in the kingdom.

Interestingly, energy-related lines do not register significantly on the radar due to the control exercised over much of the kingdom’s energy infrastructure by Saudi Aramco, which channels virtually all of its insurance requirements through its captive insurer, Stellar Insurance Ltd.

Competitive conditions
To date, 26 insurance companies have registered with SAMA (the table shows companies at varying stages of the licensing process) with at least four more companies nearing the final stage of the licensing process. Competition is expected to intensify, particularly for major and prestige group health accounts. Few insurers in Saudi Arabia can afford to ignore the health sector when the related premiums are rising toward half the total net premium.

However, the market is expected to continue to be dominated by a few major players. There were 43 insurers operating in the Saudi market in 2008, with the top eight insurance companies generating 63.8 per cent of total GWP. The remaining 35 insurers included in the SAMA survey accounted for the remaining 36.2 per cent.

Faced with increasingly competitive conditions, local insurers have a limited number of strategic choices according to S&P: “They can aim for volume in the highly competitive, administratively demanding areas of health and motor, or use their niche technical skills to pursue higher margins on much lower volumes in fire, engineering, marine, accident, and liability.

“The other alternatives are to take on the banks, fund managers, the local stock exchange, and other investment outlets to attract money into the insurance sector by offering the prospect of attractive capital gains potential. Alternatively, they can attempt to join the cut and thrust of the international reinsurance markets by accessing a sliver of the 35.4 per cent of national gross premium income that the statistics show as being ceded to reinsurers.”

The S&P report added: “No single approach guarantees success, particularly as the regulatory minimum capital requirements now applicable and the ongoing enthusiasm of local IPO investors means that many of the newly listed insurers now starting operations are extremely well capitalised relative to likely retained business volumes. . . many of the new providers will have too much capital to be able to afford to pursue a small niche strategy while still adequately rewarding their shareholders, unless a significant part of earnings comes from investment income, with all the attendant risks that an aggressive investment strategy brings.”

Regulatory overview
Insurance regulator: Saudi Arabian Monetary Agency
Governing legislation: Cooperative Insurance Companies Control Law 2003.
Capital requirements: Branch – N/A.
Locally domiciled insurer – SAR100m (US$26.7m)
for direct insurance and SAR200m (US$53.4m) for reinsurers.
Foreign ownership restrictions: Branch – N/A
Locally domiciled insurer – law requires minimum 51 per cent ownership by Saudi nationals with between 25 per cent and 40 per cent of that being offered to the public. Ownership structure varies according to Saudi interests involved (eg bank, trading company etc).

Insurance companies must operate in the kingdom on a cooperative basis. Until 2003, Saudi Arabia only had one registered insurance company (NCCI – Tawuniya).  However, following the issue of the new insurance law, 26 new insurance companies have been registered to date.  SAMA has established rules for permitted shareholding in Saudi insurance companies. Every insurance company is required to offer between 25 per cent to 40 per cent of its shares to the public.

At present, although draft legislation exists, no branches of foreign insurers are currently permitted.

Restrictions on foreign reinsurance of Saudi cedants apply in the form of mandatory levels of local reinsurance by Saudi registered insurers.

Regulatory Overview provided by Clyde & Co

Two years on from Cyclone Gonu, the Omani insurance sector is back on solid ground.

Market size
Total insurance premiums in the Omani market stood at OMR208m in 2008, compared to OMR168m the previous year. The latest available figures suggest that 2009 was also on course for solid premium growth, with total premiums during the first three quarters of 2009 reaching OMR184.1m, compared to OMR159.9m over the same period in 2008.

Motor remains the largest class of business in the market at OMR89.8m, followed by life (OMR40.8m) and property (OMR37.4m), based on 2008 figures. Marine accounted for OMR12.8m, with “other” lines of business (including commercial, industrial and energy) at OMR31.5m.

Total assets of insurance companies in 2008 were OMR423m, with investments of more than OMR251m. To some extent, the investment portfolios of Omani insurers have been shielded from the worst effects of the global economic turmoil due to Capital Market Authority (CMA) restrictions.

According to Murtadha Al Jamalani, head of the Oman Insurance Association (under formation): “Such investments are governed by the Insurance Companies Assets Investment Regulation issued by CMA, which require that the cash shall not be less than 40 per cent. Investments in shares shall not exceed 30 per cent and real estate 20 per cent of the allowed investment abroad.”

Competitive conditions
CMA has welcomed further competition in the market over the past few years, with the number of insurance companies growing to 23. This includes what the regulator classes as 11 national companies and 12 foreign companies. National Omani companies generate well over two thirds of total non-life net premiums, while foreign-controlled insurers operating locally generate the remainder.

The largest player in the market is Dhofar Insurance Company, with OMR46.8m gross premiums in 2008. Other big players by premium volume include: Oman United Insurance (2008: OMR31.9m), Al Ahlia Insurance Company (2008: OMR25.3m) and National Life Insurance & General (2008: OMR19.4m). Relatively new players on the scene include Vision Insurance and Arab Orient Insurance.

Recent developments
The launch of Oman Re, the country’s first domestic reinsurer, marked the culmination of many years of discussion and planning. Enjoying strong financial support from the market leader, Oman Re will seek to stem the tide of premium flow to reinsurers. Insurers currently cede around half the country’s gross premium income to reinsurers abroad.

Another significant development has been the launch of a joint motor/traffic database between insurance companies and the Royal Oman Police. The project aims to mitigate insurance risks, ease procedures in the event of accidents, and enable insurers to underwrite more accurately based on the availability of individual accident records. On a related note, this initiative was complemented with the issuance of a unified motor vehicle insurance policy.

The CMA continues to proactively monitor the insurance sector and issue new guidelines and regulations. Recent circulars have covered guidelines for submitting new general insurance products (including a code of professional conduct) and drafting insurance policies in Arabic. The CMA emphasises that the design and rating of products should be on sound and prudent underwriting principles, and that the risks insured should be clear and transparent, without ambiguity.

Looking ahead, agricultural insurance (including coverage for greenhouses) will be a new area of focus for the industry – the chamber of commerce is in discussions with three local insurers on a pilot project. Another industry initiative under discussion is a flood zoning study to build on the lessons learned from Cyclone Gonu in 2007, which caused more than OMR3bn of economic loss – of which OMR245m was insured. Funding for this study is currently being sought from Omani insurers.

Regulatory Overview
Insurance regulator: Capital Market Authority (CMA)
Governing legislation: Royal Decree 12/1979
Capital requirements: Branch – deposit with the CMA at least OMR150,000 if transacting insurance in one class of insurance business or OMR300,000 if transacting business in more than one class.
Locally domiciled insurer – OMR5m (US$13m).
Foreign ownership restrictions: Branch – 100 per cent foreign ownership permitted.
Locally domiciled insurer – foreign ownership limited to 49 per cent, although it may be increased to 70 per cent by approval of the CMA. Any foreign shareholding above 70 per cent would require approval of the Council of Ministers.

Only insurers licensed by the CMA can write direct Omani risks, although there is no restriction on foreign companies writing reinsurance of Omani cedants.

Currently, there are no restrictions on insurers writing both life and general insurance business in Oman. There is a requirement that 25 per cent of each Omani insurance policy is reinsured with an Omani reinsurer.

Regulatory overview provided by Clyde & Co

Government projects have fuelled growth for local insurers, but the Kuwati government will look to build on this in 2010.

Market size
Gross written premiums (GWP) in the Kuwaiti market hit KWD180.41 million in 2008, according to the Union of Insurance Companies (Kuwait) – see page 13 for a breakdown of premium by national v foreign insurers – but no further premium growth is expected in 2009.

Non-life business accounted for around 80 per cent of overall market premiums, while life and medical had the remaining 20 per cent. Motor is the largest line of business at 31 per cent of market premium, followed by marine and aviation (13 per cent) and fire (11 per cent).

The Kuwaiti government’s energy and infrastructure projects have fuelled growth for local insurers, but the government can do more to facilitate growth, according to Tariq Bin Ghaith, secretary general of the Union of Insurance Companies (Kuwait).

Speaking at the Gulf Insurance Forum in November 2009 in Bahrain, Gaith called for the introduction of legislations for insuring government properties. He also identified challenges facing the market including: the need to establish an independent insurance regulator to exercise more control over the sector, the importance of limiting the award of licenses to new insurance companies (there are 29 insurers serving a small market) and addressing the low prices of compulsory third-
party insurance.

Competitive conditions
National companies dominate the market in Kuwait, accounting for 82 per cent of total gross written premiums (GWP) written. The lion’s share of this is commanded by a handful of industry leaders: Gulf Insurance Company (GIC), Kuwait Insurance Company, Al-Ahleia Insurance Company and Warba Insurance Company. The big four collectively account for around 70 per cent of total premiums, with GIC the market leader with GWP of KWD48.6m (24.7 per cent market share) in 2008.

There are 19 national insurers in total (up from 15 in 2007), including a relatively high concentration of takaful players that entered the market over the past few years including: AIN Takaful and Al Safat Takaful. The influx of new takaful players has created an intense level of competition and place severe pressure on premium rates in certain classes.

Kuwait’s 12 takaful operators accounted for nearly 20 per cent of market premium in 2008 and more than 11 per cent of the overall life business, according to the Union of Insurance Companies (Kuwait). First Takaful is the leader in the takaful segment with GWP of KWD6m (23 per cent takaful market share), followed by National Takaful and GIC’s takaful unit.

What are classified as “Arab” and “foreign” insurance companies have made little impact in the market with a mere 18 per cent of market premium. There are only three foreign insurers operating in Kuwait (including: ALICO and New India Insurance) and seven Arab insurers including: Al-Ittihad Al-Watani Insurance, Al Daman Insurance and Lebanese Suisse.

Recent developments
An established and competitive market cannot disguise the fact that Kuwait’s insurance regulatory framework lags behind the rest of the GCC countries. Current legislation dates back to 1961 and established local players have been vocal in their criticism of the limited control exercised over new players, particularly with low capitalisation requirements of KWD150,000 for local insurers and KWD225,000 for foreign companies. Reform is on the way though with a draft insurance law in the pipeline that could significantly raise capital requirements (between KWD15m and KWD20m) and introduce monitoring schemes to manage the risk of insolvency. The law would bring Kuwait’s outdated regulatory framework in line with international standards.

Regulatory overview
Insurance regulator: Ministry of Commerce and Industry – Insurance Department (MOCI)
Governing legislation: Insurance Law 24 of 1961
Capital requirements: Branch and locally domiciled insurer – KWD10m (US$34.4m).
Foreign ownership restrictions: Branch – 100 per cent foreign ownership permitted
Locally domiciled insurer – foreign ownership could vary between 49 per cent and 100 per cent depending on the stance adopted by the Kuwaiti Investment Committee.

Only insurers licensed in Kuwait are permitted to write direct Kuwait risks. There is no restriction on foreign companies writing reinsurance of Kuwaiti cedants. There are no restrictions on composite insurance currently in place in Kuwait.

Reports indicate that a new insurance law has been prepared and sent to the Fatwa and Shari’a department for approval. The law is likely to increase the capital and deposit requirements for branches and subsidiaries, which may be doubled to KWD20m.

Regulatory overview provided by Clyde & Co

A small but sophisticated market that awaits the implementation of a compulsory health insurance scheme to fuel further growth.

Market size
Bahrain may be the smallest GCC country, but boasts a flourishing insurance market. Total market premiums stood at BHD183.3m in 2008.

Growth has been driven by a 38 per cent increase in long-term insurance (life and savings products) to BHD51.9m, which now represents the largest class of business in the market (28 per cent share of total premium), followed by motor (BHD50.9m). Fire, property and general liability accounts for 17 per cent of the market (BHD30.9m), followed by medical (12 per cent or BHD21.2m) and engineering (seven per cent or BHD12.9m).

A report from Business Monitor International forecasted total market premium in the kingdom to hit BHD345m by 2012. Total gross takaful contributions have grown to BHD27.2m.

As a leading Islamic financial centre, Bahrain boasts the largest concentration of Islamic banks and takaful companies in the Middle East. The combined assets of insurance firms stood at BHD986.2m in 2008, with the combined investment income of Bahraini insurers down 10 per cent to BHD328.8m that same year. Bahrain’s insurance sector employed 1,394 employees in 2008.

Competitive conditions
For reporting purposes, the CBB segregates the onshore market into Bahraini insurance companies (comprising 11 conventional insurers and seven takaful operators) and eight overseas insurance companies. Big players in the market by gross written premium include Bahrain Kuwait Insurance (2008 GWP: BHD23.3m), Life Insurance Corporation (International) and Takaful International.

Bahrain National Insurance (BNI) is the major personal lines insurer in Bahrain and falls under the umbrella of the Bahrain National Holding Group. Recent entrants to the market include Legal & General Gulf and Legal & General Gulf Takaful; the two new companies were granted licenses to offer life insurance and takaful services.

Recent developments
The CBB has become the first regulator in the region to introduce minimum qualification requirements for representatives of insurance companies. To underpin this initiative, the Bahrain Institute of Banking & Finance (BIBF) and the Chartered Insurance Institute (CII) have introduced an internationally recognised qualification (in English and Arabic) with a regional emphasis.

Insurance agents can also turn to the Bahrain-based Gulf Insurance Institute (GII) for training. Further regulatory reform is expected from the CBB as it cements Bahrain’s reputation for having one of the most sophisticated insurance supervisory frameworks in the region. An anticipated future development is the introduction of a compulsory health insurance scheme for expatriates.

Legislation could be introduced through parliament this year, according to Abdul Rahman Al Baker, executive director of financial institutions supervision at the Central Bank of Bahrain. “There are several benefits for introducing compulsory health insurance, the most important of which is that it will reduce government expense of about BHD20m per year spent for healthcare for expats. This represents almost six per cent of total government expenditure on healthcare,” said Al Baker.

Should a compulsory scheme be introduced, the CBB estimates that GWPs for health insurance could soar from BHD21.2m (2008) to at least BHD90m by 2015. At an industry level, the Bahrain Insurance Association (BIA) is spearheading a number of initiatives including the set-up and launch of a minor motor accident company.

“We are quite well advanced in this project. An expert house is the final stages of concluding an information memorandum for the company. At the same time we are finalising the necessary legal documentation with the Ministry of Finance for the outsourcing of this government service to the new company. We believe the project should see the light in 2010,” said Ashraf Bseisu, chairman of the Bahrain Insurance Association.

Regulatory overview
Insurance regulator: Central Bank of Bahrain.
Governing legislation: CBB Rulebook Volume 3 – Insurance.
Capital requirements: Branch – reduced capital requirements apply depending on the type of insurance business.

Locally domiciled insurer – tier 1 capital of BHD5m (US$13m) for insurers and BHD10m (US$26m) for reinsurers.

Foreign ownership restrictions: Branch and locally domiciled insurer – 10 per cent foreign ownership permitted.

Only insurers licensed by the CBB can write/direct Bahraini risks. There is no restriction on foreign companies writing reinsurance of Bahraini cedants. An insurer can obtain a direct licence allowing access to both retail and commercial customers/risks in Bahrain.

Insurers can undertake general insurance or life insurance, but composite insurance is not permitted in Bahrain. Insurers are also not permitted to issue both takaful products and conventional insurance products.

Regulatory Overview provided by Clyde & Co