Manama: The insurance sector witnessed steady results in the year 2015 with written gross premiums reaching to BD272.09 million in 2015, according the Central Bank of Bahrain (CBB) statistics.
Looking by the class of business, it is evident that the general insurance business (including Medical insurance business) contributed almost 80% to the gross premiums. The growth in business from the previous year has been strongest for Medical insurance at 11% followed by Motor insurance at 4%. Long-term insurance comprises of 20% of the total gross premiums and holds tremendous growth potential.
A significant part of such results attributed to a surge in Medical insurance, which has increased from BD 47.89 million in 2014 to BD 53.39 million in 2015, showing an increase of around 11% and representing almost 20% of the total premiums/ contributions written in the insurance market in 2015.
Total gross premiums in Motor insurance has increased from BD 73.11 million in 2014 to BD 75.78 million in 2015, showing an increase of around 4%. Motor insurance is the largest in terms of gross premiums which represented around 28% of the total premiums/contributions written in 2015.
The Takaful industry in Bahrain has shown a growth in terms of gross contributions of 3% to register BD 63.22 million in 2015. Gross contributions of Takaful Firms represent around 23% of the total Bahrain gross premiums/contributions in 2015.
By end of 2015, Bahrain’s domestic insurance market comprised of 25 Locally Incorporated Firms and 11 Overseas Insurance Firms (branches of foreign companies) carrying out Insurance, Reinsurance, Takaful, Retakaful and Captives business in the Kingdom of Bahrain. The locally incorporated firms consisted of 14 Conventional Insurance Firms, 6 Takaful Firms, 2 Reinsurance Firms, 2 Retakaful Firms and 1 Captive, while Overseas Insurance Firms consists of 8 Conventional Insurance Firms and 3 Reinsurance Firms. In addition, there are a substantial number of firms restricted to carry out business outside Bahrain and insurance ancillary services.
“The insurance sector in Bahrain holds good potential for growth, as demonstrated by the industry’s strong performance not only during 2015 but also during the past five years” said Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, at the CBB.
“Bahrain is fast becoming a hub for major regional and international reinsurance and retakaful firms as evidenced by the number of such firms that are set up in the Kingdom,” said Mr. Al Baker.
By end of 2015, there were five conventional Reinsurance Firms and two Retakaful Firms in Bahrain. The gross premiums/contributions of Reinsurance and Retakaful Firms reached BD 397.44 million in 2015 compared to BD 412.53 million in 2014.
“We expect the insurance sector to continue its growth in the coming years, mainly due to the increase in the public awareness on the importance of the insurance products in general, as well as due to the soundness of regulatory and supervisory framework of the insurance sector in Bahrain” added Mr. Al Baker.
Gross premiums/contributions generated in the domestic market amounted to BD 272.09 million (US$ 721.72 million) in 2015 compared to BD 273.95 million (US$ 726.66 million) in 2014.
Long-term (life and savings products) insurance generated gross premiums/contributions amounted to BD 55.03 million (US$ 145.97 million) in 2015. The long-term insurance premiums/contributions represented 20% of the total premiums/contributions written by insurance market in Bahrain in 2015.
Medical insurance witnessed a growth of almost 11% in gross premiums/contributions to register BD 53.39 million (US$ 141.62 million) in 2015 compared to BD 47.89 million (US$ 127.03 million) in 2014. Medical insurance premiums/contributions represented around 20% of the total premiums/contributions written in Bahrain insurance market in 2015.
Motor insurance constituted the single largest class of business, generating gross premiums/contributions amounted to BD 75.78 million (US$ 201.01 million) in 2015 compared to BD 73.11 million (US$ 193.93 million) in 2014, an increase of around 4%. Motor insurance accounted for 28% of the total premiums/contributions written by insurance market in Bahrain in 2015.
Fire, Property & Liability insurance premiums/contributions represented 17% of the total premiums/contributions written by insurance market in Bahrain in 2015. Fire, Property & Liability insurance premiums/contributions totaled BD 47.44 million (US$ 125.84 million) in 2015 compared to BD 49.01 million (US$ 130 million) in 2014.
“Due to the well-established regulatory regime, a number of leading international insurance companies established their insurance and reinsurance operations in Bahrain both in Conventional and Takaful, which has further consolidated Bahrain global profile as a financial centre. The increase of insurance ancillary services in Bahrain provides an important source of synergy to these international companies” said Mr. Fouad A. Wahid Abdulla, Director, Insurance Supervision Directorate, at the CBB.
“The CBB continues to further enhance its regulatory framework to be in line with the best international financial standards and boost the confidence of the insurance licensees and general public,” added Mr. Fouad A. Wahid Abdulla.