Keeping pace

While the global insurance industry is well capitalised at present due to a lack of catastrophes, the flood of new capital into the reinsurance market is causing rates to stagnate.

This dynamic is also affecting the Arab market but, as Mohamed Larbi Nali, CEO of Morocco’s Société Centrale de Réassurance (SCR) explains, there are positive signs pointing to the improvement of the pricing in some products, particularly fire, terrorism and political violence.

“Despite the political and security problems facing some countries in the region, the Arab insurance market is experiencing a new and notable launch in light of the positive role played by the insurance and reinsurance companies for the last period in containing the difficult circumstances and moving forward at the right pace, in addition to the role of international players in the Arab insurance and reinsurance market,” he says.

Although obvious improvements can be seen, Nali acknowledges the need for the region to keep pace with the technological and scientific development taking place in foreign markets.

“The insurance industry in the Arab world is considered one of the economic sectors needing new innovative solutions, leading to the growth of this sector and thus enabling it to face the global challenges.

“We must work to support different aspects of Arab cooperation in the field of insurance to enable companies to achieve effective coordination between their different activities in order to protect their interests, promote the development of the insurance sector and strengthen its foundation,” he says.

The Arab re/insurance sector has experienced a continued flow of new capital (despite some reinsurers experiencing losses), and Nali says this is the result of several factors.

“The investment in the re/insurance sector is a long-term goal and is based on foundations and visions for the future as it contributes to the establishment of technical reserves which are injected into large investment projects in addition to being considered as the largest contributor toward the support of national economies at the Arab and global levels,” he says.

“The future of the insurance sector in the Arab world still looks promising and prosperous in the presence of a large variety of social classes, diverse products and new insurance risks, as it is closely linked to the evolution of projects being developed in the oil and energy sector.”

Promoting the region

Annual conferences, specifically that of the General Arab Insurance Federation (GAIF), are significant within the Arab re/insurance calendar and play an important part in the region’s development.

“The insurance meetings emphasise their great importance for the Arab insurance sector in terms of achieving acquaintance and direct communication between companies and developing close relations with each other, as well as enabling them to identify new products and to have access to the latest developments in the sector, internally and externally.

“There is no doubt that high-level insurance conferences play a major role in knowledge and expertise sharing among the participants enabling them to benefit from the experiences of each other, in line with trends in the insurance industry on the Arab and global levels,” explains Nali.

The 2016 GAIF conference will be held in Beirut. “We will have a prominent participation in the event as we are always eager to accompany all of its activities and developments at the various levels,” he says.

The GAIF is a leading body serving the Arab insurance industry, a quality which is reflected at the annual event, says Nali.

“Its continuous efforts and the general secretariat’s active dedication, as well as the good reception and the hospitality of the Arab people are evident,” he says.

Careful planning

Nali reports that during the first half of this year, SCR achieved a level of growth of about 35 percent compared to the same period last year, due to the signing of new treaty agreements in the Moroccan market, with significant shares, in addition to the expansion of business activities in the African, Gulf and Arab markets.

For 2015, Nali says the company will look to expand and develop new projects.

“We look forward to continuing to expand and spread into new markets, as well as proceeding with the project on catastrophe insurance, which is in the final stage of development and implementation. That will contribute to inject huge sums of money, as much as $74 million per year.

“Also in 2015, we intend to open a new office in Dubai to facilitate the rendering of insurance services to all our customers in the Arab world,” he says.