Alhuda CIBE - Presentation on Takaful World Prospective

1. Why is this an insurance growth
region?
Middle East & North Africa

2. MORO 2006 - London June 13th 2
MENA
 Profile
 An insurance growth region
 Current figures and outlook

3. MORO 2006 - London June 13th 3
More than 20 Countries
 Morocco, Algeria, Tunisia, Egypt,Libya
 Lebanon, Palestine, Israel, Jordan, Syria,
Iran, Iraq, Turkey
 Bahrain, Kuwait, Oman, Qatar, Saudi
Arabia, United Arab Emirates, Oman,
Yemen.

4. MORO 2006 - London June 13th 4
Different economy features
 Common cultural heritage, but :
 Various stages of economic development
 Different natural resources endowment
(especially oil)

5. MORO 2006 - London June 13th 5
MENA Vs World
 Population :
– 7.7% of the world’s population
 Total GDP :
– Around USD 2 trillions

6. MORO 2006 - London June 13th 6
MENA
 Profile
 An insurance growth region
 Current figures and outlook

7. MORO 2006 - London June 13th 7
Development drivers
 Regulation
 Investment
 Takaful
 Compulsory insurance
 Bancassurance

8. MORO 2006 - London June 13th 8
United Arab Emirates
 BMA developed a world-class regulatory
system.
 BMA is finalizing a new rules book for the
growth of specific lines of business :
– Takaful & Retakaful
– Bancassurance & Reinsurance
– Captive insurance
– Professional services (TPA)

9. MORO 2006 - London June 13th 9
Egypt & Kuwait
 Egypt / Insurance reforms pushed forward
– New provisions to prevent money laundering
– Internal audit committees to ensure compliance
with government regulations.
 Kuwait / New decree
– Revision of licensing requirements for brokers,
agents and consultants

10. MORO 2006 - London June 13th 10
 Jordan / New set of regulations
– Minimum required capital increased
– Solvency margin increased
 Libya / Insurance market opened
– New insurance companies are expected to
enter the market.
Jordan & Libya

11. MORO 2006 - London June 13th 11
Oman & Saudi Arabia
 Oman / Transfer of regulation authority
– From Ministry of Commerce and Industry to
Capital Market Authority.
 Saudi Arabia / New regulation and authority
– In 2003, promulgation of the long-expected
regulation relating to the establishment and
licensing of (re) insurance companies.
– SAMA is the insurance authority body

12. MORO 2006 - London June 13th 12
Development drivers
 Regulation
 Investment
 Takaful
 Compulsory insurance
 Bancassurance

13. MORO 2006 - London June 13th 13
Investments
 New investments thanks to planned policy
reforms :
– 16 Arab MENA nations showed their intention to pursue
their comprehensive reform : Economic, political,
social, educational and legal.
 New opportunities for insurance services from :
– Privatization programmes,
– Expected rapid growth in infrastructure development in
the Gulf Cooperation Council (GCC).

14. MORO 2006 - London June 13th 14
Investments
 Expected new investments driven by
liberalization of the insurance sector :
– Continuing and encouraging reform in
insurance legislation, particularly in Saudi
Arabia.
– Opening of markets in Libya and Syria and
untapped potential in Iraq.
– Global liberalisation of financial services as part
of WTO membership.

15. MORO 2006 - London June 13th 15
Development drivers
 Regulation
 Investment
 Takaful
 Compulsory insurance
 Bancassurance

16. MORO 2006 - London June 13th 16
 Takaful products contributed & are expected to
continue to contribute to insurance business
growth.
– Innovative customer needs driven products
– Overcome social and religious insurance demand
inhibitors
– Interest for Takaful is growing among customers.
 Number of Takafuls companies is growing fast.
 Number of Takaful windows is growing as well
Takaful

17. MORO 2006 - London June 13th 17
Development drivers
 Regulation
 Investment
 Takaful
 Compulsory insurance
 Bancassurance

18. MORO 2006 - London June 13th 18
 In UAE, demand for insurance increased
exponentially due to the introduction of two
compulsory lines :
– Third party motor liability
– Medical protection.
 Saudi Health Insurance Market expected to
grow by four times in a very short term
reaching USD 1 billion.
Compulsory insurance

19. MORO 2006 - London June 13th 19
 Algeria passed a law in August 2003,
following the earthquake in May of that
year, making insurance against natural
hazards obligatory
Compulsory insurance

20. MORO 2006 - London June 13th 20
Development drivers
 Regulation
 Investment
 Takaful
 Compulsory insurance
 Bancassurance

21. MORO 2006 - London June 13th 21
 In Saudi Arabia,
– SAMA allowed local banks collaborate with
insurance companies in the family takaful field
through Bancassurance.
– Bancassurance has improved production levels
and is expected to account for 30% of market
by 2010.
 Syria, which has an important banking
potential, encouraged bancassurance
development by the opening its financial,
banking and insurance sectors.
Bancassurance

22. MORO 2006 - London June 13th 22
MENA
 Profile
 An insurance growth region
 Current figures and outlook

23. MORO 2006 - London June 13th 23
805
631551
3 442
2 405
2 663
0
500
1000
1500
2000
2500
3000
3500
4000
1999 2001 2003
MUSD
LIFE NON LIFE
Premium income in GCC

24. MORO 2006 - London June 13th 24
509459450
1 755
1 515
1 464
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1999 2001 2003
MUSD
LIFE NON LIFE
Premium income in N-Africa

25. MORO 2006 - London June 13th 25
LIFE NON-LIFE
99/01 15% 11%
01/03 28% 29%
99/01 2% -3%
01/03 11% 20%
GCC
N-Africa
Growth rates

26. MORO 2006 - London June 13th 26
0 200 400 600 800 1000 1200 1400 1600
U.A.E
SAUDI ARABIA
MOROCCO
EGYPT
LEBANON
TUNISIA
ALGERIA
KUWAIT
QATAR
OMAN
JORDAN
BAHRAIN
LIBYA
SYRIA
SUDAN
YEMEN
PALESTINE
MUSD
2004 MENA Premium income

27. MORO 2006 - London June 13th 27
0 2 000 4 000 6 000 8 000 10 000
U.A.E
SAUDI ARABIA
MOROCCO
TUNISIA
ALGERIA
EGYPT
KUWAIT
LEBANON
QATAR
JORDAN
BAHRAIN
LIBYA
SUDAN
OMAN
SYRIA
YEMEN
PALESTINE
MUSD
2010 premium income (e)

28. Thank you
Ref : The ARAB BUSINESS MAGAZINE “ Al- Iktissad wal- Aamal” (March 2006).
The Annual ARIG Review of the Arab Insurance Market 2003.
The BMA Islamic Finance Review (issue 2 & 10).
The Insurance Review (issue 6).
L’Argus de l’Assurance (July 2005).