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THE 2 ND INTERNATIONAL ISTANBUL INSURANCE CONFERENCE (İstanbul 30 September – 1 October 2010)

THE 2 ND INTERNATIONAL ISTANBUL INSURANCE CONFERENCE (İstanbul 30 September – 1 October 2010). “Recent Re/Insurance Trends in the MENA Region ” By Gökhan AKTAŞ (Chief Area Underwriter – Milli Re). MENA Region. World : 7%. Insurance Sector in General. Insurance Penetration 2009 (%).

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THE 2 ND INTERNATIONAL ISTANBUL INSURANCE CONFERENCE (İstanbul 30 September – 1 October 2010)

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  1. THE 2NDINTERNATIONAL ISTANBUL INSURANCE CONFERENCE (İstanbul 30 September – 1 October 2010)

  2. “Recent Re/Insurance Trends in the MENA Region” By Gökhan AKTAŞ (Chief Area Underwriter – Milli Re)

  3. MENA Region World: 7% Insurance Sector in General Insurance Penetration 2009 (%) • Low insurance penetration MENA: 1,6% GCC: 1,4% 3

  4. MENA Region Insurance Sector in General • Very soft market / Cut-throat price competition • “Young” insurance regulation differing across the Region • A number of players with low capital levels when compared with international standards

  5. MENA Region Insurance Sector in General • MENA Insurance markets rank below the world average with a contribution of 0,53% to the total world premium

  6. MENA Region • Insurance Sector in General

  7. MENA Region Insurance Sector in General • GCC witnessed a record premium growth rate in past few years with a solid future outlook 7

  8. MENA Region Insurance Sector in General • Slower growth in life and non-life premiums when compared to 2008

  9. MENA Region Insurance Sector in General • Liability Insurance • Premiums classified as liability make up about 2.7% of the non-life account with 2009 premiums of just under USD 28 mio in Algeria • In Lebanon, liability account grew by 12.5% in 2008 and the incurred loss ratio realised as 27.3% • In Libya market liability account grew by 42.75% in 2009 to reach a total gross premium income of USD 19.5 mio. The paid L/R of the account in 2009 was 12% • The gross market incurred loss ratio in 2008 regarding the liability classes was 10.34% for Bahrain

  10. MENA Region Insurance Sector in General • Islamic Insurance – Takaful Market by Region 2008 $9,4 billion 2004 $3,9 billion

  11. MENA Region Insurance Sector in General • Islamic Insurance – Takaful Market by Line of Business in 2008 (%)

  12. MENA Region Insurance Sector in General • Introduction of compulsory insurances like motor and health • Financial Centers • Dubai International Financial Centre • Qatar Financial Centre • Central Bank of Bahrain • Calls for consolidation across the region’s fragmented and highly competitive markets

  13. MENA Region Insurance Sector in General • Increase in the frequency of cat losses in the last 5 years • Cyclone GONU – June 2007 Economic Loss : USD 3,2 billion Insured Loss : USD 1 billion • Cyclone PHET – June 2009 Economic Loss : USD 776 millin Insured Loss : USD 200 million • Floods in JEDDAH – November 2009 Economic Loss : USD 930 million Insured Loss : USD 200 million 13

  14. MENA Region Reinsurance Practices Dominance of Proportional Treaties. Small XL business. Low retention levels. High dependence on reinsurance (in some cases 80%-90% of business reinsured) Relatively high commission rates.

  15. MENA Region 2010 Renewals Minimal impact of financial crisis on reinsurance pricing in GCC. Despite the global crisis, the region has not faced any capacity problems. No significant changes in proportional treaty terms and conditions. Limitations to Fac. Inward Acceptances. Imposition or widening of loss corridors.

  16. MENA Region 2010 Renewals Flat rates in non-proportional treaties / slight decreases in loss-free layers in Middle-East . Reduction in EPI figures . Diversification in the panel of reinsurers in Northern African Markets.

  17. MENA Region TRENDS / OPPORTUNITIES ALGERIA Population: 34.900.000 GDP : $130 billion GDP per capita:$ 3.725 Inflation rate : 5,4 % Growth rate: 2 % Insurance premium:$ 797 million Number of companies:16 (7government, 7 private, 2 mutual)

  18. Algeria Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Domination of state owned insurance companies • Compulsory insurance against catastrophes • Gold Mines: Personal Liability and Life Insurance • Public Investment Programme

  19. MENA Region TRENDS / OPPORTUNITIES BAHRAIN Population: 800.000 GDP : $ 22 billion GDP per capita:$ 27.500 Inflation rate : 2,8% Growth rate: 2,2% Insurance premium:$ 494 million Number of companies: 26 • The role of theBahrainFinancialHarbour. • Opportunities on thehealthside.

  20. MENA Region TRENDS / OPPORTUNITIES EGYPT Population: 83 million GDP : $ 188 billion GDP per capita: $ 2.265 Inflation rate : 16,2% Growth rate: 4,7% Insurance premium:$ 1.565 million Number of companies: 26

  21. Egypt Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Regulatory changes • The first stage of reforms (2004-2008) • The second stage of reforms (2009-2012)

  22. MENA Region TRENDS / OPPORTUNITIES IRAN Population: 74.200.000 GDP : $ 369 billion GDP per capita : $ 4.973 Inflation rate : 12,2% Insurance Premium: $ 4.316 million Growth rate: 0,9% Number of companies: 19

  23. Iran Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Privatisation law. • A new draft of the Insurance Overhaul Plan. • Dominance of the state owned insurance companies. • Dominance of the XL Treaties versus Proportional Treaties.

  24. MENA Region TRENDS / OPPORTUNITIES SAUDI ARABIA Population: 25.700.000 GDP : $ 390 billion GDP per capita:$15.175 Inflation rate : 5,1% Insurance premium:$3.896 million Growth rate: % 0,1 Number of companies: 29

  25. Saudi Arabia Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Strong growth over the next five years. • Enforcement of compulsory health insurance. • Establishment of Saudi Re. • Young population and the overall growth of the financial sector.

  26. MENA Region TRENDS / OPPORTUNITIES QATAR Population: 1.400.000 GDP :$ 93 billion GDP per capita :$ 66.428 Inflation rate : -4,9% Growth rate: 9,5% Insurance premium:$ 773 million Number of companies: 19 • Efforts to encourage health insurance. • The role of QFC (QatarFinancialCenter)

  27. MENA Region TRENDS / OPPORTUNITIES KUWAIT Population: 3.000.000 GDP : $101 billion GDP per capita :$ 33.666 Inflation rate : 3,9% Growth rate: 9,5% Insurance premium:$ 457 million Number of companies: 24

  28. Kuwait Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • 85.5% of the market premium is written by the local companies. • More than 10 takaful companies. • Significant growth potential due to young population.

  29. MENA Region TRENDS / OPPORTUNITIES LEBANON Population: 4.200.000 GDP : $ 31 billion GDP per capita :$ 7.380 Inflation rate : 1,1% Growth rate: 6% Insurance premium:$ 952 million Number of companies:54

  30. Lebanon Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • One of the largest Life Insurance Markets in MENA Region. • Efforts to be recognised as a regional hub. • A new pension plan. • Need of a new insurance law.

  31. MENA Region TRENDS / OPPORTUNITIES U.A.E Population: 4.600.000 GDP : $ 205 billion GDP per capita:$ 44.565 Inflation rate : 1,6% Insurance premium:$ 5.113 million Growth rate: 1,3% Number of companies: 58

  32. U.A.E Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Leader in GCC countries i.r.o premium production. • Disappointing absence of regulatory development. • Low rates, large losses.

  33. MENA Region TRENDS / OPPORTUNITIES OMAN Population: 2.800.000 GDP :$ 53 billion GDP per capita :$ 18.928 Inflation rate : 3,6% Growth rate: 3,7% Insurance premium:$ 627 million Number of companies: 16 (9 domestic, 7 foreign )

  34. Oman Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • The formation of Oman Re. • Orange Card • Medical Insurance offering vast potential.

  35. MENA Region TRENDS / OPPORTUNITIES JORDAN Population: 6.300.000 GDP : $ 22 billion GDP per capita :$ 3.492 Inflation rate : -0,6% Growth rate: 2,1% Insurance premium:$ 510 million Number of companies: 28

  36. Jordan Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • New minimum capital requirement. • New instructions to regulate the bancassurance business. • Amendment on civil health insurance.

  37. MENA Region TRENDS / OPPORTUNITIES TUNISIA Population: 10.300.000 GDP : $ 40 billion GDP per capita: $ 3.883 Inflation rate : 3,7% Growth rate: 2,8% Insurance premium: $ 758 million Number of companies: 22 (18 domestic,4 foreign)

  38. Tunisia Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Partial privatisation of The Societe Tunisienne d’Assurances et de Reassurances (STAR). • Updated regulations. • Tunis Financial Harbour.

  39. MENA Region TRENDS / OPPORTUNITIES MOROCCO Population: 32,000,000 GDP : $ 91 billion GDP per capita:$ 2.843 Inflation rate : 1,2% Growth rate: 5,3% Insurance premium:$ 2.583 million Number of companies: 27

  40. Morocco Insurance Market Review MENA Region TRENDS / OPPORTUNITIES • Leader in North Africa. • Free trade agreement with US. • Removal of obligatory cession for non-life business by 2012. • Launch of first risk management association.

  41. THANK YOU FOR YOUR ATTENTION

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