The outlook for the Middle East insurance industry in the short term is of modest growth or stagnation in premiums, particularly on the commercial side, a report said.

Growth in the personal lines (19.6 per cent in 2014 as compared to 6.6per cent for commercial lines) has been supported by regulations making motor and health insurance mandatory in several markets and as the penetration of these lines increases, the growth rate in premiums is likely to slow, according to the “Finance Forward Middle East Insurance Outlook Report 2016” from Middle East Global Advisors (MEGA), a leading gateway connectivity and intelligence platform to Islamic finance opportunities.

Even though personal line growth is expected to slow, survey respondents were more optimistic about revenue growth over the medium term in personal lines than in commercial lines.

Survey results of the Outlook Report highlighted that portfolio allocation is largely a result of long-term recognition of overexposure to the real estate sector at the expense of more diversified investments across the fixed income market.

The “Finance Forward Middle East Insurance Outlook Report 2016” will be launched at the upcoming Middle East Insurance Forum (MEIF) in Bahrain on February 2 at the Gulf Hotel.

Speaking ahead of the presentation of the report Dr Sayd Farook, vice chairman and CEO of Middle East Global Advisors, shared: “The Outlook Report is expected to serve as a definitive guide helping leaders in the industry make key strategic decisions and capitalize on emerging opportunities.”

The uniqueness of the report, he continued, is that it combines meaningful insights from insurance leaders - gathered from an extensive survey of practitioners’ sentiment – with robust analysis of the impact of the global economy on the Middle East’s insurance markets as well as comparative analysis of markets in the GCC and Levant.

Blake Goud, chief research officer at Middle East Global Advisors added that “Insurers are expecting to continue to invest in investment-grade fixed income, which includes US Treasury bonds.  As regulatory requirements are updated, there is greater impetus not just for higher investment grade fixed income allocations but also more local market fixed income (particularly home country debt).”

“Changing consumer behaviour due to advancements in technology which provides easy access to information is one the most disruptive trends that insurance providers perceive to be important over the coming years,” Goud added.

MEIF 2016 is a two-day gathering of the insurance industry's leaders taking place on February 2 and 3 at the Gulf Hotel in Manama, Bahrain. – TradeArabia News Service