Instability and violence across MENA are still the main risks to the regional economic outlook, said Aon in its December 2019 Political Risk Newsletter. War is continuing to rage in Yemen and the situation remains tense in Syria, taking a toll on countries like Jordan, Lebanon and Iraq.
Regulators across the GCC are increasingly collaborating with insurers to educate consumers on protection and risk-mitigating insurance offerings to make a positive impact on the development of the industry, said Alpen Capital (ME), a Dubai-headquartered investment banking advisory firm, in a report on the region’s insurance industry.
Members of the Union of Algerian Insurance and Reinsurance Companies have met to discuss solutions on how to comply with a new Finance Act which will require them to collect an environment tax on behalf of the government.
The five (re)insurers listed on the Bahrain Bourse achieved a combined profit of BHD11.4m ($30.3m) for the first nine months of 2019, surging by 44.3%, compared to BHD7.9m for the corresponding period in 2018.
Egypt’s insurance industry needs a catalyst which can lead to the transformation of the industry, said local senior industry executives, just as the central bank did in 2004 in restructuring and developing the banking sector.
Total premiums of insurers in Egypt increased during the first nine months of 2019 to reach EGP25.7bn ($1.7bn), up 24.3% from the corresponding period of the previous year, according to data from the Financial Regulatory Authority.
In a first-of-its-kind initiative in the region, Jordan Insurance Federation (JIF) will offer employees of local insurers free training starting this year, announced the Federation.
The Parliamentary Committee on Economy and Investment recently held a meeting with several stakeholders of the insurance industry to discuss a draft insurance law prior to it being tabled before the House of Representatives.
In response to the heightened economic and political risk in Lebanon, Arab Reinsurance Company (Arab Re) has decreased its exposure to domestic securities and increased its proportion of assets held outside Lebanon, notably by redirecting its cash flows to Bahrain and Oman, said AM Best.
The World Bank has recently approved a $275m Disaster Risk Management Development Policy Loan for Morocco that contains a Deferred Drawdown Option for Catastrophe Risks (CAT DDO) designed to both help the country strengthen its capacity to manage the financial impact of natural disasters and climate-related shocks, and to upgrade its institutional framework for disaster risk management.
In the wake of increased losses, players in the insurance sector in Morocco are acting to improve their system of combatting fraud.
Several insurers have created alternative solutions for the settlement of motor premiums following a decision of the Ministry of Economy and Finance to prohibit payment by instalments.
Several ministries and government departments have begun to insure their fleet of vehicles after years of deliberation on the issue.
The Saudi Ministry of Municipality & Rural Affairs and the Saudi Arabian Monetary Authority (SAMA) have jointly been developing a new standard inherent defects insurance (IDI) policy, which is expected to be made available in early 2020, said international law firm HFW.
Tunisia’s People’s Assembly has passed a proposal to impose a special tax of 3% on the taxable income of insurers and banks for the benefit of social funds.
The Turkish insurance sector is looking forward to 2020 as the industry has been performing above expectations last year in spite of low economic growth, and the momentum is expected to continue.
The UAE Insurance Authority (IA) has said it is closely monitoring all insurers operating in the country, especially those that have posted financial losses.
The UAE Federal Transport Authority for Land and Maritime (FTA) is working on a new set of maritime regulations to attract more foreign investment which would be issued in 2020, said Ms Hessa bint Ahmed Al Malek, executive director of maritime sector at the FTA, at a maritime insurance roundtable.
Global
Reinsurance renewals at 1 January 2020 were shaped by deteriorating loss experience, a lack of new capital inflows and increasingly challenged environments in the primary insurance and retrocession markets, according to Guy Carpenter & Company in a report.
Global insured losses from natural and man-made CATs are estimated at around $56bn in 2019, down from $93bn the preceding year, and well below the 10-year average of $75bn, according to preliminary sigma estimates from Swiss Re Institute.
Takaful
The Council of the Islamic Financial Services Board (IFSB) approved the admission of five organisations into its membership during the council’s 35th meeting in Dhaka, Bangladesh in December.
EFG Hermes, through its non-banking financial arm EFG Hermes Finance Holding, and GB Auto, through GB Capital, have announced their entry into a definitive sale and purchase agreement (SPA) to acquire a 75% stake in life insurance player Tokio Marine Egypt Family Takaful in a deal worth EGP84.75m ($5.3m).
National reinsurer Malaysian Re has expanded into the family retakaful business with support from Pacific Life Re which will provide technical pricing, underwriting, product development, experience analysis and global insights. Both parties signed an MoU and entered into a partnership to provide sustainable retakaful solutions to family takaful operators.
Takaful operations in Morocco are expected to commence within the first three months of 2020, according to Insurance and Social Insurance Supervisory Authority (ACAPS) president Hassan Boubrik.
The legislative framework for takaful business in Oman has been completed with the issuance of the takaful regulation, said Capital Market Authority (CMA) executive president Sheikh Abdullah bin Salem Al Salmi.
Takaful has gained little traction in Qatar (less than 1% penetration), indicating substantial growth opportunities if the government makes it more of a priority and there is greater public awareness, according to an annual Islamic finance report issued by the Qatar Financial Centre (QFC) in association with Refinitiv, a global provider of financial markets data and infrastructure.
Tawuniya and the Hajj and Umrah Ministry have signed an agreement for the former to provide insurance for pilgrims coming from outside Saudi Arabia.