MENA to remain attractive reinsurance destination
The Middle East and North Africa (MENA) region is expected to remain an attractive destination for the reinsurance industry despite pricing pressure.
This is the finding of the 2015 MENA reinsurance barometer, an annual survey published by the Qatar Financial Centre (QFC) Authority.
Over 90 percent of respondents believe that reinsurance capacity in the region will continue to expand, although more moderately than before. But only 3 percent of executives believe that capacity will increase by more than 10 percent, compared with 18 percent last year.
Under 20 percent of respondents believe that reinsurance premium growth will outpace regional gross domestic product growth over the next 12 months, down from 28 percent a year ago.
“Reinsurance capacity is expected to further expand in the MENA region. This is the main finding of the MENA reinsurance barometer which we have been publishing since 2011,” said Sheikh Salman Al-Thani, chief strategic and business development officer of the Qatar Financial Centre.
Between 2009 and 2014, the region’s total non-life and life insurance premium volume expanded from about $32 billion to more than $51 billion.
Over $1.4 trillion worth of projects are currently underway in the Gulf Cooperation Council (GCC) region alone.
However, pressure on prices and an increasing share of largely self-retained personal lines business weigh heavily on the reinsurance sector’s growth prospects, according to the report.
“The region’s strengths, namely robust insurance market growth, a vast pipeline of infrastructure and construction projects and a relatively low natural catastrophe exposure, still prevail over the challenges. Excess capacity, a lack of technical expertise and political instability are major challenges,” added Sheikh Salman Al-Than.
Senior executives of 32 regional and international reinsurance companies, ceding companies and intermediaries operating in the MENA region were interviewed.
