Bahrain’s medical insurance led the sector growth at 19 per cent in 2016 reaching BD62.11 million ($163 million) from BD52.20 million in 2015, representing almost 23 per cent of the total premiums during the year, the Central Bank said.

The kingdom’s insurance sector showed positive results in the year 2016, with general insurance business (including medical insurance business) contributing 81 per cent to the gross premiums, the report said.

Long-term insurance comprise of almost 19 per cent of the total gross premiums and holds tremendous growth potential, it added.

Total gross premiums in motor insurance has increased from BD76.16 million in 2015 to BD78.88 million in 2016, showing an increase of around 4 per cent. Motor insurance is the largest in terms of gross premiums which represented around 29 per cent of the total premiums/contributions written in 2016.

Total gross contributions of Takaful firms registered BD60.43 million in 2016. Gross contributions of Takaful Firms represent around 22 per cent 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 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 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,” he added.

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 BD378.97 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 BD272.04 million ($721.60 million) in 2016 compared to BD272.81 million ($723.63 million) in 2015.

Long-term (life and savings products) insurance generated gross premiums/contributions amounted to BD51.62 million ($136.92 million) in 2016. The long-term insurance premiums/contributions represented 19 per cent of the total premiums/contributions written by insurance market in Bahrain in 2016.

Motor insurance constituted the single largest class of business, generating gross premiums/contributions amounted to BD78.88 million ($209.23 million) in 2016 compared to BD76.16 million ($202.02 million) in 2015, an increase of around 4 per cent. Motor insurance accounted for 29 per cent of the total premiums/contributions written by insurance market in Bahrain in 2016.
 
Fire, property & liability insurance premiums/contributions represented 15 per cent of the total premiums/contributions written by insurance market in Bahrain in 2016. Fire, property & liability insurance premiums/contributions totalled BD40.31 million ($106.92 million) in 2016 compared to BD47.32 million ($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 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,” he added. – TradeArabia News Service