The figures released by the Central Bank of Bahrain (CBB) on Sunday stated that Bahrain insurance market witnessed a growth with gross premiums reaching BD215milion in 2011, a 2% increase over 2010. The figures show that engineering insurance soared by 31 per cent in 2011.
The CBB said that the Bahrain insurance market posted an annual growth during 2011, with a significant part of this increase attributed to a surge in engineering insurance, registering around 31% increase in gross premiums to reach BD 16.46 million in 2011 compared with BD12.55 million in 2010, representing almost 8% of the gross premiums written in 2011.
Growth was also reported under medical insurance from BD31.75 million in 2010 to BD34.84 million in 2011, showing an increase of around 10%.
By end of 2011, Bahrain’s domestic insurance market comprised of 27 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, seven Takaful Firms, two Reinsurance Firms, two Retakaful Firms and two Captives, while Overseas Insurance Firms consists of eight Conventional Insurance Firms and three Reinsurance Firms. In addition, there are a substantial number of firms restricted to 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 2011 but also during the past five years,” Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, at the CBB, said.
The Takaful industry continued to expand with overall gross contributions, of the firms operating in Bahrain, reaching BD40.19 million in 2011, up from BD38.55 million in 2010, an increase of around 4%.
“Bahrain is fast becoming a hub for major regional and international reinsurance and retakaful firms as evidenced by the increasing number of such firms that are established in the Kingdom,” Al Baker, added.
By end of 2011, there were five conventional Reinsurance Firms and two Retakaful Firms in Bahrain. The gross premiums/ contributions of Reinsurance and Retakaful Firms have increased to register BD349.53 million in 2011 compared to BD323 million in 2010, an increase of 8% over the year 2010.
“We expect the insurance sector to continue its growth momentum 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 surge in the economic growth of the Kingdom and the soundness of regulatory and supervisory framework of the insurance sector in Bahrain” he said.
Gross premiums generated in the domestic market amounted to BD214.94 million in 2011, up from BD 210.48 million in 2010.
Medical insurance witnessed a remarkable development with rapid growth starting from year 2006. Premiums of Medical business rose from BD31.75 million in 2010 to BD34.84 million in 2011, showing an increase of almost 10%. Medical insurance premiums represented 16% of the total premiums written in the Bahraini insurance market in 2011.
Long-term (life and savings products) insurance generated gross premiums amounted to BD48.88 million (US$ 129.66 million) in 2011. The long-term insurance premiums represented 23% of the total premiums written by insurance market in Bahrain in 2011.
Motor insurance constituted the single largest class of business, generating gross premiums amounted to BD 55.63 million (US$ 147.56 million) in 2011 compared to BD57.47 million (US$ 152.44 million) in 2010, a decrease of around 3%. Motor insurance accounted for 26% of the total premiums written by insurance market in Bahrain in 2011.
Fire, Property and Liability insurance premiums represented 18% of the total premiums written by insurance market in Bahrain in 2011. Fire, Property and Liability insurance premiums totaled BD38.65 million in 2011 compared to BD35.66 million (in 2010, showing an increase of almost 8%.
“Due to the well established regulatory regime, a number of leading international insurance companies establish their insurance and reinsurance operations in Bahrain both in Conventional and Takaful, which has further consolidated Bahrain global profile as a centre for finance. The increase of insurance ancillary services in Bahrain provides an important source of synergy to these international companies,” Nader Al Mandeel, Director, Insurance Supervision Directorate, at the CBB, said.
“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,” Al Mandeel, added.