(BUSINESS WIRE)-- The Kingdom of Bahrain has maintained its position as a key insurance hub and continues to post growth in its insurance market despite a prolonged period of political turbulence, according to a new report from A.M. Best Co.
The report, titled “Political Uncertainties Overshadow Bahrain’s Regional Hub Status”, states that Bahrain has been the country in the Gulf Cooperation Council (GCC) most impacted by political instability. Prior to the social unrest, Bahrain’s insurance sector had enjoyed strong growth. In 2008, total gross premiums written (GPW) had climbed by 33.6%, surpassing a 25% increase a year earlier. However, in 2011, total insurance premiums rose by a mere 2.4%. Yet despite the political pressures, the insurance sector has shown resilience with greater demand for insurance expected to be reported for 2012, and the market being well-positioned for further growth in 2013. Mahesh Mistry, director, analytics, said: “Of the six GCC countries, Bahrain has the highest insurance penetration, with total premiums as a percentage of gross domestic product (GDP) reaching 2.2% in 2011. This reflects the higher awareness of the benefits of insurance”.
However, when measured by total GPW, Bahrain has the smallest insurance market in the GCC with premiums of BHD 215 million (USD 572 million) in 2011, reflecting the country’s low population. Furthermore, competition from other regional hubs such as the Dubai International Financial Centre (DIFC) and Qatar Financial Centre (QFC) has intensified. Nevertheless, Bahrain’s robust regulation has enabled the country to maintain its financial hub status, and despite its small size, is the chosen domicile for several regional and international reinsurance and Retakaful companies.
Yvette Essen, director, industry research - Europe and emerging markets, and report author, said: “Bahrain is the least oil-dependent country of those in the GCC. Given that Bahrain does not have the same scale of natural resources as its neighbours, its development of a financial services sector has always been imperative. For many years, Bahrain was considered the Gulf’s financial centre, offering expertise and experience. The Central Bank of Bahrain is one of the most highly regarded regulators in the Middle East, adopting a risk-based capital approach.”
To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=212460.
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
Contacts
A.M. Best
Mahesh Mistry, +(44) 20 7397 0281
Director, Analytics
mahesh.mistry@ambest.com
or
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Yvette Essen, +(44) 20 7397 0322
Director, Industry Research
Europe & Emerging Markets
yvette.essen@ambest.com
or
Vasilis Katsipis, +(971) 4375 2782
General Manager, Market Development,
A.M. Best - MENA, South & Central Asia
vasilis.katsipis@ambest.com
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