The Bahrain insurance market posted continuous annual growth over 2001-2010, with gross premiums rising at a CAGR of 15 per cent to hit BD210.5 million ($558.3 million) in 2010 compared to BD58.6 million in 2001, said a key report.

The Central Bank of Bahrain's (CBB) 'Insurance Decennial Report 2010,' the first of its kind in the region, highlights the performance of the industry, consistent with the rapid growth of the economy as evidenced by the GDP with a compound annual growth rate (CAGR) of 12  per cent over the same period.

The insurance penetration increased from 1.95  per cent of GDP to 2.55  per cent and the insurance density or average per capita expenditure on insurance increased with a CAGR of 7.5  per cent over the last decade, the report said.

A significant part of this increase was attributed to a surge in medical insurance from BD1.76 million in 2001 to BD31.75 million in 2010, showing a CAGR of almost 38 per cent.

Growth was also reported in long-term insurance - life and savings products - registering an increase with a CAGR of 16  per cent with BD51.36 million in 2010 compared with BD13 million in 2001, comprising almost 24  per cent of gross premiums written in 2010.

Total assets of insurance firms in 2010 stood at BD1,360.5 million compared with BD680.9 million in 2006, showing a CAGR of almost 19  per cent, while the investment portfolio of Bahraini insurance firms increased from BD352.78 million in 2006 to BD474.6 million in 2010 showing a CAGR of 8  per cent.

'The insurance sector holds tremendous promise for growth, as demonstrated by its strong performance not only during 2010 but over the last decade,' said CBB executive director of financial institutions supervision Abdul Rahman Al Baker.

The takaful industry continues to expand with overall gross contributions of the firms operating in Bahrain, increasing significantly. The gross contribution increased from BD1.89m in 2001 to BD38.55 million in 2010 showing a CAGR of 40  per cent.

'Bahrain is fast becoming a hub for major regional and international reinsurance and retakaful firms as evidenced by the increasing number of such firms getting licensed in the kingdom,' said Al Baker.-TradeArabia News Service