nce the forgotten child of re/insurance, the Middle East is fast becoming a much sought-after market—one that is set to weather the recent financial storms better than most.
Despite the recent financial uncertainties in global markets around the
world, takaful insurance is set to reach nine percent of the world’s insurance market share by 2010, according to the latest figures.
Intelligent Insurer polled 600 of the Middle East market’s top brokers,
most influential re/insurers and commentators to find out who are the leading players in this fast-developing market and what these experts anticipate happening in the future.
“The opportunities for increased uptake of takaful insurance in the Gulf Cooperation Council (GCC) region should be positive,” said Kevin Willis, an analyst at rating agency Standard & Poor’s (S&P). “The considerable economic growth in the region, coupled with a sizeable, under-insured population, means that there are substantial prospects for further development of personal lines cover.”
Like several other rating agencies, S&P’s focus on the GCC region has
increased of late and it has now carried out a comprehensive analysis of the insurance market, which is contained in its 2009 Islamic Financial Outlook.
It’s not just rating agencies that are looking more closely at the Middle
East marketplace. Consulting and accounting giant KPMG is among the service providers looking to capitalise on the emerging opportunities. It maintains a strong focus on life and non-life underwriting in the region, according to Leah Dering-Ridley, a KPMG spokeswoman. It helps clients in the areas of cost-savings, Solvency II, restructuring and redomestication, with a heavy investment via actuaries and risk consultants.
Dering-Ridley adds that its focus is on “insurance solutions and transactions
leveraging our transaction services and corporate finance groups”. Exact information on the scale and potential size of the takaful market
varies, but takaful insurance—whose global market is expected to grow five-fold by 2015—is expected to provide a big opportunity in the coming years. That’s one reason for the survey—to get a better look at which companies players value and the attorneys making waves in the region.
What little data there is suggests that the reinsurance market in the GCC region in 2006 showed generated $6.4 billion in annual insurance premiums, of which 51 percent was ceded to re/insurers, creating a reinsurance premium of $3.3 billion.
Leading reinsurer Flagstone Re has increased its global platform in anticipation of growth.
“As we have developed, we have increased our geographical appetite and
lines of business with a global platform comprising nine production offices around the globe, writing a full selection of reinsurance and specialty lines,” said Clare Kerrigan, a Flagstone Re spokeswomen. “We can source more business worldwide, undertaking the high-quality, high-volume and comprehensive risk analysis that helps set Flagstone apart.”
22 | INTELLIGENT INSURER | Middle East Report 2010
Another highly thought of company in the region, Aon Benfield, topped the list of leading international reinsurance brokers in our survey.
“Being voted as the leading reinsurance broker in the Middle East is
a testament to our market capabilities,” said Dominic Christian, chief executive officer of Aon Benfield’s international division. “Third-party endorsement of our products and services is the best form of marketing, and we are thrilled with the news. Thank you to all who participated in the survey and for the ongoing support of our growing operations in the region.”
Although the region is set to flourish, it is unlikely to be immune to the
state of the global economy, according to broker Guy Carpenter. While the market is relatively stable, there are few signs of rate increases.
“There is still overcapacity in the market for all but the peak risks, both at
the insurance and reinsurance level,” said Christopher Pleasant, managing director at Guy Carpenter. “This has been driven over the last few years by numerous local start-ups, the result of abundant capital, and investors looking enviously at the very solid returns from many of the established insurance companies. Investment into new insurance and reinsurance ventures has dried up since the credit crunch, but competition for business is intense, with both existing companies and new players chasing premium.”
International giant Swiss Re feels that its highly diversified portfolio across many geographical locations is a key element of success.
“Our strength in the reinsurance business is based on two key factors: accumulated expertise and continuing research, as well as a highly diversified portfolio, spread across all lines of reinsurance business and many geographical regions,” said Alayna Francis, vice president at Swiss Re.
“ Intelligent Insurer polled 600 of the Middle East market’s top brokers, most influential re/insurers and commentators to find out who are the leading players in this fast-developing market and what these experts anticipate happening in the future.”
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