No, the pandemic is not yet been beaten, and business will probably be tough for some time to come, but it does look as if we are over the worst and that we can look forward to a better future.
For the region as a whole – and the insurance industry in particular – this could herald the beginning of another sharp economic growth phase that could offer multiple opportunities for insurers, reinsurers and brokers.
Just look at Saudi Arabia, where recent legislative changes coupled with the constant revving of the economic engine are seeing a large influx of women into the workforce. Played correctly, this should lead to many new opportunities in health insurance and life insurance – as well as motor insurance and many personal lines.
Viewed through a business development lens, this is a whole new market that has to be serviced with tailored products. Savvy insurers will learn the lesson from other smart players around the world and recognise that selling to smart young women takes finesse and intelligence.
Ironically, other ‘new’ opportunities for insurers post-pandemic could be found in the hydrocarbons sector. While many governments and corporates around the world have been trumpeting their ESG credentials, the harsh truth is that investment in renewable energies to date has been woefully inadequate.
The planet as a whole has spent, cumulatively, less than 10% of what it needs to have done in pursuing solar, wind, hydro and the like as sources of renewable energy if we are to meet our emissions targets and keep global temperature rises down.
What this means in reality is that while we may be able to turn our back on coal, or the dirtiest of the various coals at least, we will be dependent on ‘cleaner’ fossil fuels like gas and oil for a lot longer than we thought.
That has to be good news for big LNG producers, especially Qatar, as well as the insurers and reinsurers that service that sector – including lucrative and essential ancillary sectors like the producers of fertilizers as a natural by-product of LNG.
Oil producing nations – particularly Abu Dhabi and Saudi Arabia – will also benefit from this enforced moratorium on businesses, investors, insurers and reinsurers turning their back on polluting industries.
The message seems simple enough: We need to get better at planning for such seismic shifts in energy consumption and just wishing thing will get better is not a sound business strategy.
And then, of course, there are those nations in the Middle East that are simply ‘ready’ for growth – specifically Egypt, Turkey and Lebanon.
Yes, they still face significant challenges – but in some instances those challenges are where the big opportunities lie. Lebanon, for instance, is due a very significant break in its run of bad luck and the re-emergence of the Lebanese economy is likely to prove a boon for every business in the risk and insurance sector.
On an unrelated point, in this issue readers will also see the winners of the Middle East Insurance Industry Awards for 2021. Even a quick look is enough to give us all hope that the future of the sector in MENA looks very bright indeed. Congratulations to all.
Paul McNamara
Editorial director
Middle East Insurance Review