With March, spring is in the air with strong signs of growth everywhere. Most of the accounts are in and on the whole, the region has reported a profitable year. Hopefully, despite the restrained stockmarket returns, all companies have set aside adequate technical reserves and are managing their portfolios to control accumulation and ensure greater diversification. Companies, too, are set to take advantage of the opportunities that abound in the small, retail, personal and commercial sectors and mega-projects. They are also looking at retaining more risks and, hence, need to beef up their technical expertise as well, despite being lured by more brokers coming into the market with reach to more international capacity.
With spring bursting forth, we profile the UAE domestic market which has the most number of insurance companies in the GCC. Last year, it saw a 20% growth with all forecasts pointing to a doubling of the premium pie to hit US$4 billion by 2010. The growth is infectious in the UAE takaful sector where the three direct players are beavering away with great expectations and good results, while Takaful Re, based in Dubai, stands tall with its over-arching offer of reinsurance protection.
March is also the time for the Asian Takaful Conference, now in its second year and is recommended as a must-attend event as it is the only Takaful Conference that looks at co-operation, complementation, collaboration and competition between traditional and takaful insurers. Both can learn from the experiences and expertise of each other in meeting the consumer’s needs for protection against the vagaries of risks in life and business. As an amazing curtain raiser to this event, we bring you our own Map of Takaful Companies in the World – more than 100 Islamic insurers in more than 20 countries with the list still growing and never exhaustive because in the vibrant takaful scene, new players are popping up all over. But the true test at the end of the day is whether the takaful operator is set to meet the demand and need for Islamic insurance and not charge in, in pursuit of “hot oil money” as some put it. This will determine the longevity of the various newcomers.
On the investment front, we offer you a special piece on structured funds which are seen as an alternative that goes some way to meet the needs of takaful companies to find the right financial vehicles to park their funds. We also have a Malaysian perspective of the permitted investment routes open to takaful companies.
In the Middle East, political risk insurance is big, but risky business given the long-standing volatile stand-offs in the region, and the rapid growth in infrastructural developments everywhere in Mena. Our coverage of articles on political risk insurance looks at the need to adopt formal structures to assess ongoing political risk exposures as well as the covers insurers can offer. It also comes with Aon’s 2007 Political & Economic Risk Map which is indeed an invaluable guide to trade credit and political risk insurance markets’ perceptions of key risks around the world and in the Middle East in particular.
As a special feature, as more markets look at making workmen’s compensation insurance compulsory, we bring a close-up on what some of the more advanced countries are doing in reforming methods of financing the risk of occupational accidents and diseases with a greater role for private insurers.
With spring in the air, hopes are high and insurers are all set to create more real opportunities to buttress this growth. In this context, I draw your early notice to the forthcoming Mena CEO Insurance Summit to be held in Jordan in June with the theme: Theme: “Strategies for Growth & Profitability in the Middle East”. It will provide a much-needed long-awaited forum for CEOs in the region to come together to learn from each other’s experiences and draw from international insurance developments and expertise. Organised by MiddleEast Insurance Review and the Insurance Commission of Jordan, the Summit is a must-attend event. So mark your calendars - 18 and 19 June.
Sivam Subramaniam
Editor-in-Chief
MiddleEast Insurance Review