Bahrain Insurance sector posts strongest-ever annual growth in 2008

Gross premiums surge by 34%; Life business soars by 38%

Manama, Bahrain -16 June 2009: The Central Bank of Bahrain announced today that the Bahrain insurance market posted its strongest-ever annual growth during 2008, with gross premiums surging by 34% over 2007 to register BD183.3 million in Bahrain Market in 2008.

A significant part of this increase attributed to a surge in Life insurance from BD37.69 million in 2007 to BD51.98 million in 2008, a 38% increase. Significant growth was also reported for classes of Fire, Property & Liability, Engineering and Medical.

The underwriting income of insurance firms rose by 151% to register BD30.4 million in 2008 compared to BD12.1 million in 2007.

The number of insurance companies and organisations operating in Bahrain market during 2008 totaled 163, of whom 25 were locally-incorporated insurance firms, 11 were branches of foreign firms and the remaining were other insurance ancillary services and insurance organisations.

"The insurance sector in Bahrain holds tremendous promise for growth, as demonstrated by the industry's strong performance not only during 2008 but in several recent years," said Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, at the CBB.

The Takaful industry continued to expand with overall gross premiums reaching BD27.2 million, up from BD15.7 million in 2007, a 73% increase, the majority of which was generated by increased Family Takaful premiums.

The growth was also reflected in a healthy increase in employment in the insurance sector. Insurance firms employed a total of 1,394 people in 2008 (62% Bahraini), an increase of 14% from 1,224 in 2007.

"We expect the insurance sector to continue its growth momentum in the coming years, mainly due to the increase in the public awareness on the importance of Life and Medical insurance as well as the introduction of new insurance products by the existing insurance firms" said Mr. Al Baker.

Gross premiums generated in the domestic market amounted to BD 183.3 million (US$ 486.2 million) in 2008, up from BD136.7 million (US$ 362.6 million) in 2007.

Life insurance constituted the single largest class of business, generating premiums amounted to BD51.98 million (US$ 137.9 million), an increase of 38% over the 2007 figure of BD37.69 million (US$ 100 million). The Life market accounted for 28.3% of the total premiums generated during 2008.

Motor gross premiums reached BD50.9 million (US$ 135 million) in 2008, an increase of 17% over BD43.6 million (US$ 116 million) in 2007. Motor insurance accounted for 28% of the premiums market in 2008.

Fire, Property & Liability premiums grew 58% to BD 30.98 (US$ 82.2 million) in 2008, from BD19.6 (US$ 52 million) in 2007, while premiums from Marine & Aviation insurance amounted to BD7.5 million (US$ 20 million) in 2008, compared with BD 6.9 million (US$ 18.3 million) in 2007. The Fire Property & Liability class accounted for 17% of total premiums in 2008, while Marine & Aviation represented 4%.

Medical insurance represents 12% of insurance market, generating gross premiums worth BD21.2 million (US$ 56.2 million) in 2008, up from BD14.7 million (US$ 39 million) in 2007, an increase of 44%.

"The CBB is committed to advancing the promising insurance sector by ensuring a clear and transparent regulatory framework and a business-friendly environment for insurance services providers," said Mr. Nader Al Mandeel, Director, Insurance Supervision Directorate, at the CBB.

This has helped attract several regional and international insurance giants to establish their Middle East hubs in Bahrain. The presence in Bahrain of such names as Hannover Re, Allianz, Legal & General, Life Insurance Corporation (LIC) of India, MedGulf and AXA will help expand and advance the industry further.

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Central Bank of Bahrain (CBB)
Contact: External Communications Unit
Tel: +973 17547370/17547360
E-mail: media@cbb.gov.bh
Website: www.cbb.gov.bh