MANAMA: The Kingdom of Bahrain’s Insurance Sector remained resilient in 2016 with gross premiums reaching BD 272.04 million and surge in medical insurance by 19% during the year.
The Central Bank of Bahrain announced that the insurance industry has shown positive results in the year 2016, with general insurance business (including Medical insurance business) contributing 81% to the gross premiums. The growth in business from the previous year has been strongest for Medical insurance at 19% followed by Engineering insurance at around 7%. Long-term insurance comprises of almost 19% of the total gross premiums and holds tremendous growth potential.
A significant part of such results attributed to a surge in Medical insurance, which has increased from BD 52.20 million in 2015 to BD 62.11 million in 2016, showing an increase of around 19% and representing almost 23% of the total premiums/ contributions written in the insurance market in 2016.
Total gross premiums in Motor insurance has increased from BD 76.16 million in 2015 to BD 78.88 million in 2016, showing an increase of around 4%. Motor insurance is the largest in terms of gross premiums which represented around 29% of the total premiums/contributions written in 2016.
Total gross contributions of Takaful Firms registered BD 60.43 million in 2016. Gross contributions of Takaful Firms represent around 22% of the total Bahrain gross premiums/contributions in 2016.
By end of 2016, Bahrain’s domestic insurance market comprised of 25 Locally Incorporated Firms and 11 Overseas Insurance Firms (branches of foreign companies) carrying out Insurance, Reinsurance, Takaful, Retakaful and Captives business in the Kingdom of Bahrain. The locally incorporated firms consisted of 14 Conventional Insurance Firms, 6 Takaful Firms, 2 Reinsurance Firms, 2 Retakaful Firms and 1 Captive, while Overseas Insurance Firms consists of 8 Conventional Insurance Firms and 3 Reinsurance Firms. In addition, there are a substantial number of firms restricted to carry out business outside Bahrain and insurance ancillary services.
“The insurance sector in Bahrain holds tremendous promise for growth, as demonstrated by the industry’s strong performance not only during 2016 but also during the past five years,” said Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, at the CBB.
“Bahrain is fast becoming a hub for major regional and international reinsurance and retakaful firms” said Mr. Al Baker.
By end of 2016, there were five conventional Reinsurance Firms and two Retakaful Firms in Bahrain. The gross premiums/contributions of Reinsurance and Retakaful Firms reached BD 378.97 million in 2016.
“We expect the insurance sector to continue its growth in the coming years, mainly due to the increase in the public awareness on the importance of the insurance products in general, as well as due to the soundness of regulatory and supervisory framework of the insurance sector in Bahrain,” added Mr. Al Baker.
Gross premiums/contributions generated in the domestic market amounted to BD 272.04 million (US$ 721.60 million) in 2016 compared to BD 272.81 million (US$ 723.63 million) in 2015.
Long-term (life and savings products) insurance generated gross premiums/contributions amounted to BD 51.62 million (US$ 136.92 million) in 2016. The long-term insurance premiums/contributions represented 19% of the total premiums/contributions written by insurance market in Bahrain in 2016.
Medical insurance witnessed a growth of almost 19% in gross premiums/contributions to register BD 62.11 million (US$ 164.75 million) in 2016 compared to BD 52.20 million (US$ 138.50 million) in 2015. Medical insurance premiums/contributions represented around 23% of the total premiums/contributions written in Bahrain insurance market in 2016.
Motor insurance constituted the single largest class of business, generating gross premiums/contributions amounted to BD 78.88 million (US$ 209.23 million) in 2016 compared to BD 76.16 million (US$ 202.02 million) in 2015, an increase of around 4%. Motor insurance accounted for 29% of the total premiums/contributions written by insurance market in Bahrain in 2016.
Fire, property and others premiums/contributions represented 15% of the total premiums/contributions written by insurance market in Bahrain in 2016. Fire, Property & Liability insurance premiums/contributions totaled BD 40.31 million (US$ 106.92 million) in 2016 compared to BD 47.32 million (US$ 125.52 million) in 2015.
“Due to the well-established regulatory regime, a number of leading international insurance companies established their insurance and reinsurance operations in Bahrain both in Conventional and Takaful, which has further consolidated Bahrain’s profile as a financial centre. The increase of insurance ancillary services in Bahrain provides an important source of synergy to these international companies,” said Mr. Fouad A. Wahid Abdulla, Director, Insurance Supervision Directorate, at the CBB.
“The CBB continues to further enhance its regulatory framework to be in line with the best international financial standards and boost the confidence of the insurance licensees and general public,” added Fouad A. Wahid Abdulla.