International reinsurance companies are expected to raise their premiums by 10% to 20% in the forthcoming period for some classes of insurance, due to the COVID-19 crisis, according to a senior insurance industry executive.
Dr Abdulla Sultan, CEO of Bahrain Kuwait Insurance Company (BKIC), said that there has been a drop in reinsurance coverage due to a decline in the premium portfolio, the low rate of investment returns and the increase in claims for major risks in recent years given the economic effects of the coronavirus pandemic, reported Alayam.
He said that the pandemic has left its impact on the various sectors of the economy in general and the insurance sector in particular, as it negatively affected the investment portfolios of companies, as well as negative repercussions such as a decline in oil prices, a decrease in the number of development and infrastructure projects and difficulty in collecting debts.
On the challenges facing the insurance market in Bahrain, he said that one of them is competition in the industry in which 24 insurance companies operate. He said that this is a large number when compared to the customer base and the population of Bahrain of less than 1.5m.
However, on a brighter note, the proposed national mandatory health insurance scheme is expected to be implemented early next year 2021, said Dr Sultan.
He said, "The implementation of compulsory health insurance will have a positive impact on the insurance sector, and will open the way for insurance companies to expand their services by offering insurance products to insure against disease and disability."