LONDON--(BUSINESS WIRE)-- The insurance, reinsurance, Takaful and cooperative markets within the Middle East and North Africa (MENA) continue to offer opportunity for growth, although the global slowdown of financial markets and political instability in the region threaten to dampen prospects for some companies, according to a new report from A.M. Best Co.
Whilst the MENA insurance markets have experienced double-digit premium growth in recent years, the pace of growth has slowed in 2011 and 2012, with most markets expected to achieve increases in total gross premiums written (GPW) of less than 5% this year. Movements in GPW have been more pronounced in countries affected by the Arab Spring where growth has either declined or stagnated in 2011, with difficult trading conditions in 2012.
Mahesh Mistry, associate director, analytics, said, “Competition in the MENA markets remains fierce, as a number of companies seek topline growth, and increasing market share is a priority. This has been exacerbated in recent years by the increasing number of new entrants into the market.”
The report, “Political Unrest Overshadows MENA’s Strong Insurance Demand”, found leading insurers have attempted to restructure their operations and achieve a profile more commensurate to their international peers. A number of companies have adopted a more prudent investment policy—de-risking from volatile asset classes such as equities and real estate, with a shift toward a more liquid investment portfolio—which should generate a steady income stream to supplement underwriting activities. In addition, regulators’ actions to introduce stricter guidelines should expedite requirements for a more prudent allocation of investments.
Yvette Essen, report author and director of industry research, Europe and emerging markets, said, “The MENA insurance markets tend to be immature, with very low penetration rates compared to more developed international markets. There is greater demand for insurance as the awareness of the benefits of insurance grows and regulators encourage its take-up with the introduction of compulsory lines of business.” She adds, “Obligatory medical schemes are considered to present the greatest opportunities in the region, although they remain fiercely competitive and need to be controlled to produce profitable growth.”
To access a complimentary copy of this report, please visit www.ambest.com/press/100101menaspecialreport.pdf.
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Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Mahesh Mistry, +(44) 20 7397 0325
Associate Director, Analytics
Rachelle Morrow, +(1) 908 4392200, ext. 5378
Senior Manager, Public Relations
Yvette Essen, +(44) 20 7397 0322
Director, Industry Research
Europe& Emerging Markets
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
Source: A.M. Best Co.