Dean Roberts, business development executive at Aon Benfield’s ReMetrica risk and capital modelling software, explains the biggest challenges currently facing the Middle East.
Regulation and rating agencies are triggering a drive towards capital modelling in the Middle East and North Africa, as the growing number of regional insurers look to more established markets to benefit from best practice. Despite the troubles in the region, the MENA economies are experiencing high growth even in sectors outside of natural resources.
Dubai, Bahrain and Qatar have positioned themselves as international hubs for insurance and reinsurance and the region is growing in international importance in this sector. Many multinational industry players are establishing themselves in these regions, such as Catlin and Lloyd’s which have made the headlines recently with their new operations in Dubai. Moody’s says that the insurance industry in the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates—has almost tripled through 2006–13, with insurance premiums increasing to $18.4 billion from $6.4 billion.
In correlation, regional insurers are increasingly turning to more sophisticated analytics and tools to better understand the risks and drive their reinsurance purchase. Notably, there has been a significant increase in the use of risk and capital modelling in the region with a focus on driving growth while managing external pressures from rising regulatory and rating agency pressures.
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