BMA launches major initiative to expand insurance industry

The BMA-industry initiative is aimed at enhancing Bahrain's status as a major insurance center in the Middle East.

The initiative will be carried forward by a newly established Insurance Market Development Committee (IMDC), which comprises six BMA officials and four representatives from the Bahrain Insurance Association (BIA) and Bahrain Institute of Banking & Finance (BIBF).

The committee is chaired by Mr. Anwar Khalifa Al Sadah, Executive Director, Financial Institutions Supervision, at the BMA.

"There is a pressing need to raise awareness about insurance among the public in Bahrain, in order to further grow the insurance market," said Mr. Al Sadah, during a press conference held today at the BMA.

"Some lines of business, such as life, medical and other family protection and pension schemes, are under developed, largely due to lack of awareness about the benefits of insurance, coupled with religious inhibitions."

For example, per capita spending on life insurance in the GCC is less than US$60 (BD22), compared with US$2,500 (BD945) in a developed market such as the UK.

"There is tremendous potential to grow the domestic market," said Mr. Al Sadah.

There is also a need to raise the profile of Bahrain as the premier insurance hub of the Middle East.

The BMA is currently implementing a comprehensive strategy to further develop the Kingdom's insurance industry, Mr. Al Sadah pointed out.

Key elements of the new strategy include expansion of the domestic insurance sector through enhancing the quality of services, enhancing the quality and capacity of insurance professionals, enhancing transparency, attracting captive companies and Takaful business, as well as establishing a market-friendly regulatory framework which is on par with international best practice.

The IMDC is envisaged to support BMA's new insurance strategy by undertaking a series of programmes, which will be ongoing.

Mr. Sameer Al Wazzan, Chairman, BIA, welcomed the establishment of the committee.

"Insurance penetration is, indeed, low in Bahrain and the Arab world," he said.

"However, the industry should view this as a tremendous opportunity and work actively to develop this business by educating the public about insurance as an acceptable means of protecting the future of one's family."

Mr. Hussain Al Ajmi, Head Insurance Learning Centre, BIBF and member of IMDC, said the BIBF is committed to close collaboration with the BMA in the Agency's efforts to further develop the insurance sector, including improving the regulatory environment.

"Quality training is an essential element of the BMA strategy and we stand ready to prepare the personnel needed to advance the insurance industry, locally and regionally," he said.

Meanwhile, the IMDC is gearing up for a public awareness campaign in the run-up to the Middle East Insurance Forum, which is being held in Bahrain on 18th and 19th January 2004.

The event is being organized by Al Iktissad Wal A'amal, with the support of the Bahrain Monetary Agency (BMA).

The event will bring together leading experts in insurance to discuss the latest issues and trends in the Middle East insurance industry, including special risk, Takaful, Bancassurance and captive insurance.

A highlight of the event is a special session focusing on four major insurance jurisdictions in the region: Bahrain, Saudi Arabia, Iran and Egypt.