Insurance firms urged to prepare for oil and gas future

  

04 June 2015

BEIRUT: Lebanese Insurance companies need to diversify their offerings as Lebanon prepares to invest in the exploration of oil and gas resources, Economy Minister Alain Hakim said at an oil and gas conference held Wednesday at the Phoenicia Hotel.

“The insurance sector needs to acquire new tools that would allow it to provide services for huge projects and this requires the adoption of advanced risk management practices aimed at evaluating risks based on advanced models,” he said.

Hakim emphasized that only then can the insurance become an active partner in the oil and gas sector.

“This would definitely contribute to the growth of the sector allowing it to compete in regional and international markets,” he added.

The Lebanese insurance sector registered a growth of 6 percent in the first quarter of 2015 compared to the same period last year, according to statistics provided by the Association des Compagnies d’Assurances au Liban (ACAL).

Life premiums constituted 24.4 percent of Lebanese insurance in the first quarter of 2015 while the share of non-life premiums stood at 75.6 percent, according to the ACAL statistics.

ACAL President Marx Zaccar said the Lebanese insurance sector is now getting prepared to insure the oil and gas industry.

“We want the 50 Lebanese registered insurance companies to get involved in the insurance of the oil and gas industry under the supervision of ACAL, which has a strong experience in running insurance pools,” he said.

Zaccar said Lebanese insurance companies are highly liquid with total equities of $1 billion and a total premium income of $1.5 billion.

“We are therefore the most solvent insurance industry in the world ... we invest $3 billion and employ 4,000 employees,” he said.

Abdel-Khaliq Raouf Khalil, secretary-general at the General Arab Insurance Federation (GAIF), said that huge oil installations in Arab countries are being reinsured by foreign reinsurance companies and not by Arab ones which is considered to be a great loss for Arab countries.

“Arab insurance companies can cooperate together in a bid to take part in this business,” he said.

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