With the great tidings 2019 must bring, we look for hope amidst the struggles in the world threatened by trade wars, terrorism and nuclear spats with oil price shocks rated as the top risk for the region.
This must be a better year than 2018, say many, though there are the naysayers who smirk for a worse reality. As always, it is the mind that is at play in assessing opportunities and taking the bull by the horns, as they say. But there are already some players that are on the verge of shrinking to cut costs.
Fortunately, there is always the crowd that sees the glass only half-full and rushing to expand their business where others bow out. This is the cycle of business and life itself. We must draw lessons from the mega-hits that re-runs and returning movies rehashing old heroes make.
On a serious note, the January renewals are done and the verdict is that the market is no longer soft and rates have increased with some differentiation across the various classes. There is a marked impact on the claims-affected segments of the business and clients too, they say. The reinsurance landscape in the region has seen serious difficulties in the past year and companies are being extra vigilant in deploying capacity and managing risks. But it is still early days to collate the official trend.
Our cover story, based on MEIR’s recent CEO roundtable, gives the insight on the travails of 2018, a year long ago but still haunting us and pushing hard lessons for the market. Technology adoption and a hardening market are the two trends to watch out for.
On the regulatory outlook, despite the big strides taken by regulators in the region, there are still calls by international bodies highlighting the need for reforms even in the GCC markets. At the end of the spectrum, we have the Global Federation of Insurance Associations alleging that the IAIS rules are too invasive for businesses.
Our country profile this month looks at the GCC, the main growth engine of the region, and how it is holding up against the prevailing headwinds. With the changing demographics, life holds out a good potential, especially with the private sector playing a greater role in boosting the economy.
On takaful, there are calls to on-board millennials in some markets while in others, operators are still waiting for special takaful regulatory regimes. The IFSB has set takaful standards for the supervisory review process of takaful and retakaful undertakings.
It is the new year, so it bodes well to recall the great blessings in the insurance industry. The winners of the Middle East Insurance Industry Awards (MIIA) are always a good call, as are the dynamic regulators in the market beavering away behind the scenes to give the insurance business that cutting edge even as the risk business gets more unpredictable with cyber threats lurking, the market leaders with the gumption to dare to be different, and of course, the amazing talent in the region. I salute all.
Happy New Year to all. Make this a winning year for you.
Sivam Subramaniam
Editor-in-chief
Middle East Insurance Review