11/08/2010 00:00 AST
Bahrain's insurance market posted an annual growth of more than 7.5 per cent last year with gross premium in excess of BD200 million ($530.5m), the Central Bank of Bahrain (CBB) announced yesterday.
The growth was largely attributed to a surge in medical insurance from BD21.23m in 2008 to BD27.02m in 2009, a 27pc increase.
Growth was also reported in long-term insurance in life and savings products, registering an 11pc increase in gross premiums to reach BD57.31m compared to BD51.57m in 2008.
Net investment income of insurance firms increased significantly to register BD43.02m in 2009 compared to BD5.54m in 2008, an increase of 677pc.
The number of insurance companies and organisations operating in Bahrain during 2009 totalled 168, of whom 27 were locally-incorporated insurance firms, 11 were branches of foreign firms in addition to insurance firms restricted to business outside Bahrain and insurance ancillary services.
"The insurance sector in Bahrain holds tremendous promise for growth, as demonstrated by the industry's strong performance not only during 2009 but in several recent years," said Central Bank of Bahrain financial institutions supervision executive director Abdul Rahman Al Baker.
The takaful industry continued to expand with overall gross premiums reaching BD32.67m, up from BD26.75m in 2008, a 22pc increase.
The growth was also reflected in a healthy increase in employment in the insurance sector.
Insurance firms employed a total of 1,566 people in 2009 of whom 61pc were Bahraini, an increase of 12pc from 1,394 in 2008.
"We expect the insurance sector to continue its growth momentum in the coming years, mainly due to the increase in public awareness on the importance of life and medical insurance as well as the introduction of new insurance products by the existing insurance firms," said Mr Al Baker.
Gross premiums generated in the domestic market amounted to BD200.56m in 2009, up from BD186.64m in 2008.
Life insurance constituted the single largest class of business, generating premiums of BD57.31m, an increase of 11pc over the 2008 figure of BD51.57m.
The life insurance market accounted for 29pc of the total premiums generated during 2009.
Motor gross premiums reached BD57.01m, an increase of 4pc over BD54.66m in 2008. Motor insurance accounted for 28pc of the premiums market in 2009.
Fire, property and liability premiums grew 5pc to BD32.51m from BD30.95m in 2008, while premiums from marine and aviation insurance amounted to BD7.87m compared with BD7.54m in 2008.
The fire, property and liability class accounted for 16pc of total premiums in 2009, while marine and aviation represented 4pc.
As many regional and international reinsurance and retakaful firms take Bahrain as a hub for their business, a significant growth was registered by these firms.
The reinsurance and retakaful gross premiums reached BD292.98m in 2009 compared to BD235.31m in 2008, a 25pc increase.
"Due to the well established regulatory regime, a number of leading international insurance companies establish their insurance and reinsurance operations in Bahrain both in conventional and takaful, which has further consolidated Bahrain's global profile as a centre for finance," said CBB insurance supervision director Nader Al Mandeel.
"The increase of insurance services in Bahrain provides an important source of synergy to these international companies.
"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 companies and the general public," he added.
Gulf Daily News
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