Lebanon: Govt to offer subsidised loans to merged insurers
Source: Middle East Insurance Review | May 2017
The Economy and Trade Ministry has completed a draft law that will encourage insurers to merge by providing subsidised loans.
Economy and Trade Minister Raed Khoury said this at a meeting for insurers held by Chedid Capital Holding, reported The Daily Star.
Mr Khoury said that mergers will enable insurers to increase their capital so as to offer better quality services.
Lebanon has over 60 small, medium and large insurers and some experts believe that this number is too big for a small country. The minimum capital requirement for insurance firms is US$1.5 million, a figure considered too low by some industry players.
Mr Farid Chedid, Chairman of Chedid Capital, said that the insurance sector has proven to be resilient against the various challenges that have faced the country in the past years. The sector contributes 3.5% to GDP, he said.
He said that the insurance sector in Lebanon is also among the main investors in the government’s Treasury Bills, which reached $910 million in 2014.
Mr Chedid noted that the average growth of the sector from 2010 to 2014 reached 5% compared to GDP growth and an inflation rate of 2%.
The sector provides job opportunities for around 12,000 people, he said. “Moreover, the good performance of this sector has a direct positive impact on the Lebanese because in 2014, around 515,000 people had life insurance and 540,000 had health insurance, while 2.3 million held other kinds of insurance,” he said. M