“For new road and railway projects, the GCC countries will be spending around $100 billion in the next eight years. This is expected to result in a surge in insurance activity and a growth in gross premiums of insurance industry in the region,” Abdul Rahman Al-Baker, Executive Director of Financial Institutions Supervision, CBB told an audience of 500 people on Monday.
During his keynote address at the opening of the two-day 9th Middle East Insurance Forum (MEIF 2013) at the Gulf Hotel Bahrain, Al-Baker, said looking ahead, there would be great new and untapped potential for insurance industry in the coming years.
“There is huge investment in the region and the GCC on construction, infrastructure, and petroleum industry related projects.”
“The MENA region needs to work more closely to develop a regional insurance market by harmonizing legal frameworks and ensure that supervisory standards are at par with best international standards. In this regard, the CBB has played an important role in the founding of the Arab Forum of Insurance Regulatory Commissions (AFIRC), which brings together 17 Middle East regulatory authorities, and aims to promote collaboration, transparency and adoption of international standards among regulators in the region,” he said.
“With Middle East insurance industry expected to grow remarkably in the coming years, regulators must work together at the local, regional and international level to effectively deal with the risks that can have a systemic impact. Furthermore, regulators need to work more closely with insurance companies, service providers and other industry stakeholders to ensure a close oversight of their activities and a healthy financial sector,” he added.
“MEIF 2013 is an opportunity for the insurance industry to meet and exchange views on current market and economic conditions that have direct impact in our insurance markets. I would like to thank the organizers, sponsors and speakers for supporting this important event.
Touching upon the theme ‘Enhancing Regulatory Frameworks to support the further development of the Insurance industry in the Middle East,’ he said it served as an important and timely as the insurance industry in the MENA region was undergoing transformation and there is a tremendous potential for the regional insurance market to grow and thrive.
“Maintaining adequate level of solvency that is in line with the best regulatory standards is another regulatory priority for the regulators in the Middle East insurance industry. Such solvency requirements should be helpful to provide early warning to regulators so that they could take the necessary measures should the capital of insurance firm falls below the required level. Adequate solvency requirements enhance the confidence in the financial stability of the insurance industry and further improve the financial standing of insurance firms.
Regulators must ensure that their respective rules and regulations on Corporate Governance are robust and in line with the best international practice. Regulators should require market players to establish and implement a corporate governance framework which provides for sound and prudent management, oversight of the insurer’s business and adequately recognizes and protects the interests of policyholders.
Regulatory authorities should also support public awareness in order to enhance the public knowledge on the basics of insurance and the importance of such financial services to the public.