Takaful World Prospective Middle East & North Africa
Middle East & North Africa
Why is this an insurance growth
region?
MENA
Profile
An insurance growth region
Current figures and outlook
MORO 2006 - London June 13th 2
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.
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Different economy features
Common cultural heritage, but :
Various stages of economic development
Different natural resources endowment
(especially oil)
MORO 2006 - London June 13th 4
MENA Vs World
Population :
– 7.7% of the world’s population
Total GDP :
– Around USD 2 trillions
MORO 2006 - London June 13th 5
MENA
Profile
An insurance growth region
Current figures and outlook
MORO 2006 - London June 13th 6
Development drivers
Regulation
Investment
Takaful
Compulsory insurance
Bancassurance
MORO 2006 - London June 13th 7
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)
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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
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Jordan & Libya
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.
MORO 2006 - London June 13th 10
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
MORO 2006 - London June 13th 11
Development drivers
Regulation
Investment
Takaful
Compulsory insurance
Bancassurance
MORO 2006 - London June 13th 12
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).
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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.
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Development drivers
Regulation
Investment
Takaful
Compulsory insurance
Bancassurance
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Takaful
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
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Development drivers
Regulation
Investment
Takaful
Compulsory insurance
Bancassurance
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Compulsory insurance
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.
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Compulsory insurance
Algeria passed a law in August 2003,
following the earthquake in May of that
year, making insurance against natural
hazards obligatory
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Development drivers
Regulation
Investment
Takaful
Compulsory insurance
Bancassurance
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Bancassurance
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.
MORO 2006 - London June 13th 21
MENA
Profile
An insurance growth region
Current figures and outlook
MORO 2006 - London June 13th 22
Premium income in GCC
MUSD
4000
LIFE NON LIFE
3500
3000
3 442
2500
2 663
2000 2 405
1500
1000
500 805
551 631
0
1999 2001 2003
MORO 2006 - London June 13th 23
Premium income in N-Africa
MUSD
2000
1800
LIFE NON LIFE
1600
1 755
1400
1 515
1200 1 464
1000
800
600
400
450 459 509
200
0
1999 2001 2003
MORO 2006 - London June 13th 24
Growth rates
LIFE NON-LIFE
99/01 15% 11%
GCC
01/03 28% 29%
99/01 2% -3%
N-Africa
01/03 11% 20%
MORO 2006 - London June 13th 25
2004 MENA Premium income
MUSD
PALESTINE
YEMEN
SUDAN
SYRIA
LIBYA
BAHRAIN
JORDAN
OMAN
QATAR
KUWAIT
ALGERIA
TUNISIA
LEBANON
EGYPT
MOROCCO
SAUDI ARABIA
U.A.E
0 200 400 600 800 1000 1200 1400 1600
MORO 2006 - London June 13th 26
2010 premium income (e)
MUSD
PALESTINE
YEMEN
SYRIA
OMAN
SUDAN
LIBYA
BAHRAIN
JORDAN
QATAR
LEBANON
KUWAIT
EGYPT
ALGERIA
TUNISIA
MOROCCO
SAUDI ARABIA
U.A.E
0 2 000 4 000 6 000 8 000 10 000
MORO 2006 - London June 13th 27
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).
