The political tensions created by ISIS, internal conflicts and cheaper oil prices have started to affect business sentiments. Market conditions are getting tougher, though there is a flurry of activities in the M&A area.
With the AIO Conference in Tunis this month, all eyes are on Africa. The continent with at least 54 independent countries has been drawing quiet attention for some time now. Initial skepticism that it was just boardroom tactics in the developed markets to divert attention away from the home market results has turned positive.
Now, even on the insurance front, there is a rush to Africa where the 1.2 billion population base is expected to double within the next 35 years even as several thousands still flee the continent from sheer poverty and insecurity. There are projections for double-digit growth in just a few of the markets. Total premiums in Africa hit US$72 billion for 2013, though South Africa alone makes up 75%. About $18 billion comes from the other 53 markets. Penetration in most markets is low except for South Africa (15.4%), Namibia (7.7%), Kenya (3.4%) and Morocco (3.0%). Our Cover Story bring you tips from an insider on how to compete successfully in the long term in this diverse but hot continent.
Our Country Profile is on AIO Conference host, Tunisia. Business sentiments are upbeat as the country enters a new political era with the continuing presence of a strong national reinsurer helping to steer the market to cope with the challenges. The regulator is also keen to help create a solid sustainable industry capable of competing locally and regionally.
As we settle down to the dynamics of May, we look at maritime safety rules and piracy risks, draw lessons from the Ebola scare and how to institute enhanced disaster risk reduction processes, key issues in underwriting the changing construction landscape in the Middle East, tap into reinsurance models, and the role of TPAs in the healthcare market.
In takaful, there is growing confidence even as reality kicks in. The 10th World Takaful Conference in Dubai did a realistic assessment of the potential amidst calls that takaful operators should move into new territories and not just limit themselves to motor and health products. There were also calls to reach non-Muslims as well. Though many assumed there is perennial demand for takaful, awareness of Islamic insurance among Muslims was rated very low, below 15%.
Our Takaful feature this month shines the spotlight on the needs of the greying population and looks at the pensions market in takaful.
We also offer a must-read take on a brave new world where a technology and data revolution in insurance is taking place, and insurers may need help from the government to shift the paradigm of risk selection and transfer.
With the launch of the DIFC Insurance Association, the hub comes a full circle. The MICC, surpassing 20 members, now also has a critical mass for a greater say in the region. This month, we bring you an interview with a Saudi MICC member, who calls on the need to nurture younger professionals urgently.
Lastly, I urge you to send your nominations for the 2nd Middle East Insurance Industry Awards, supported by DIFC and GAIF. You can moan that there are just too many awards, but how many can boast of having a defined criteria, a strict code of transparency and a panel of 27 eminent judges, and being audited by independent body, EY? So send your entries now!
I wish you all the merriness of May in life and in business. May the sun shine bright for you.
Sivam Subramaniam
Editor-in-Chief, Middle East Insurance Review