MANAMA: The Central Bank of Bahrain (CBB) will continue its focus on bringing the best regulatory regime for insurance sector, says a senior official.
Abdul Rahman Al-Baker, Executive Director of Financial Institutions Supervision, Central Bank of Bahrain, during his keynote address at the two-day InsureByte Conference, told the audience that the CBB always believes in continual enhancement and improvement of its regulatory framework for the growth and betterment of industry.
“The CBB has always played an important role in launching new initiatives to develop the insurance industry both locally and regionally. The issuance of the Takaful model is one of these initiatives in reaffirming Bahrain as the jurisdiction of choice for all the Takaful/ Retakaful companies in the region and globally. As you may aware, the main objective of the new Takaful rules, which is implemented starting January 2015, is to facilitate a faster growth of Takaful business in Bahrain while protecting the interest of all stakeholders, vis-à-vis participants, shareholders, and Takaful operator. The implementation of the Takaful rules has also attracted new entrants to the market and will foster competition for the betterment of the consumers.
The CBB in cooperation with the Bahrain Insurance Association have issued the Standard Policy Document of Compulsory Insurance for Motors (Third Party Insurance) and the procedures for dealing with claims. Such documents are issued, in order to ensure that high quality insurance services and fair treatments are offered to the policyholders. Currently, the CBB in cooperation with the BIA is in the final process of finalizing the Standard Policy Document for Comprehensive Insurance which will be issued during the third quarter of this year.
Although there are several factors that need to be taken into consideration to further strengthen the growth of insurance industry such as properly addressing customers expectation, expansion of distribution channels and proper disclosure of the terms of insurance, insurance companies need to watch financial technology closely and adopt a responsive digital strategy and fintech solutions to further strengthen their market position. Basically, financial technology is growing at a rapid pace, something that has not gone unnoticed by traditional insurers who can see the threat to their market share. As customers’ preferences change and technology continues to break new bounds, insurance licensees need to decide how to incorporate technology into their strategies and or face being left behind. Financial technologies or Fintech innovations are reshaping the provision of financial services, creating new opportunities and posing new challenges to the insurance industry.
As a regulator, he said, we should ensure that our regulatory framework accommodates the use of new technologies which help make the delivery of financial services more robust, efficient and inclusive. Therefore, the CBB has issued directives to address the financial technologies in various financial services.
Looking ahead, he said, we expect further growth in the insurance industry in the Mena region driven by moderate economic growth, despite slower than expected oil price recovery. Sector growth will continue to be supported by large investment in infrastructure and construction projects in the Mena region, further enhancement of regulatory and supervisory standards, as well as the support of the governments in making an increasing number of insurance products compulsory. Also, innovation and financial technologies is another big factor that insurers should keep an eye on in the coming years to upgrade their business and to grow the sector. All of these are expected to further enhance the insurance activities and growth of premiums in the Mena region.
