Bahrain insurance sector posts strongest ever annual growth in 2007

Life insurance contributed the lion's share of the growth, soaring by nearly 67%, with medical and the traditionally strong motor business also growing strongly by 39% and 16% respectively.

The profitability of insurance firms rose by 56%, while their total assets grew by 42%.

The number of insurance firms operating in Bahrain market during 2007 totaled 163, of whom 22 were locally-incorporated firms, 11 were branches of foreign firms and the remaining were other insurance ancillary services and insurance organizations.

"The insurance sector in Bahrain holds tremendous promise for growth, as demonstrated by the industry's strong performance not only during 2007 but in several recent years," said Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, at the CBB.

The economic boom taking place in Bahrain and the region, renewed Government investment in large infrastructure projects and strong private sector investment in real estate and other economic sectors are contributing to the expansion of the insurance sector. In addition, increasing public awareness and acceptance of insurance is also contributing to the growing demand for insurance products, both conventional and Islamic.

The growth was also reflected in a healthy increase in employment in the insurance sector. Insurance firms employed a total of 1,224 people in 2007 (64% Bahraini), an increase of 9% from 1,125 in 2006.

"We expect the insurance sector to continue its growth momentum in the coming years as significant investments continue in infrastructure, real estate and industry and with the introduction of compulsory health insurance for expatriates," said Mr. Al Baker.

Gross premiums generated in the domestic market amounted to BD135.6m ($360m) in 2007, up from BD112.4m ($298m) in 2006.

Life premiums amounted to BD38.8m ($103m), an increase of 67% over the 2006 figure of BD23m ($61m). The life market accounted for 29% of the total premiums generated during 2007.

Motor insurance constituted the single largest class of business, generating gross premiums worth BD43.6m ($115.6m), an increase of 16% over BD37.5m ($99.5m) in 2006. Motor insurance accounted for 32% of the premiums market in 2007.

Fire premiums grew 2% to BD11.3m ($30m) in 2007, from BD11.1m ($29.4m) in 2006, while premiums from marine insurance amounted to BD5.9m ($15.6m) in 2007, compared with BD5.7m ($15.1m) in 2006. The fire class accounted for 8.3% of total premiums in 2007, while marine represented 4.3%.

Miscellaneous insurance, which includes miscellaneous financial loss, engineering, liability, money, casualty guarantee and others, represented 13% of the insurance market, generating gross premiums worth BD18.2m ($48.3m) in 2007, up from BD18.1m ($48m) in 2006.

"The CBB is committed to advancing the promising insurance sector by ensuring a clear and transparent regulatory framework and a business-friendly environment for insurance services providers," said Mr. Nader Al Mandeel, Acting Director, Insurance Supervision Directorate, at the CBB.

This has helped attract several international insurance giants to establish their Middle East hubs in Bahrain. The presence in Bahrain of such names as Hannover Re, Allianz, AXA and ACE Group will help expand and advance the industry further.