The recent upheaval in Syria is clearly a significant event for all in this strategically-vital country – as well as for those bordering it, including Türkiye, Jordan, Iraq and Lebanon. But what does it mean for the insurance sector?
The political turmoil that is presently roiling Syria could end up having a very significant effect on the Syrian economy overall – or it could turn out to be something of a damp squib.
It is too early to predict which outcome is most likely, but some observers are cautiously optimistic that it could prove to be a boon for the people and businesses of Syria – and therefore for an insurance sector hungry for growth.
Growth from a low base
The population of Syria is estimated at around 24m today, which perhaps explains why there are so many insurers listed as being active in the country on the Syrian Insurance Supervisory Commission (SISC) website.
Some evidence of the parlous state of the Syrian economy under Assad in reflected in the fact that the last performance data for the sector produced by SISC dates back to mid-2022.
Entities listed include Syrian General Insurance Corporation, United Insurance, Syrian Arab Insurance, Syrian National Insurance, Syrian International Insurance (AROPE), Arab Insurance Syria, Syrian Kuwait Insurance, Arab Mashreq Insurance, Syrian Trust Insurance, Al-Aqeelah Takaful Insurance, Union Cooperative Insurance, Adonis Insurance and Syrian Islamic Insurance.
It should be noted that in 2023, shareholders of Gulf Insurance Group approved the group’s exit from the Syrian market and the sale of its subsidiary, Syrian Kuwait Insurance.
In 2023 all private insurers in Syria agreed to act as a single block as a reinsurer among themselves for 2024 contracts.
According to the SSIC, “This, like the BBB Comprehensive Banking Reinsurance Pool, is largely a pattern of self-sufficiency for the Syrian insurance sector and gives Syrian companies additional leverage when negotiating with any current and future reinsurer. The Technical Committee of the Reinsurance Complex formed in the Authority and the Arab Union Reinsurance Company will manage this agreement.”
Foreign interest
There is little doubt that the nation holds much interest for other nations wishing to invest in Syria, particularly in the oil sector, which could not hope to develop without robust insurance sector support.
China, in particular, had invested a lot in the Syrian oil industry before the civil war – and as recently as 2022 the nation signed up for China’s Belt and Road Initiative hoping for funds to underwrite the many reconstruction projects slated for the coming years.
The hope is that these projects might now receive the green light – as well as the necessary funding. Underwriting opportunities would swiftly follow.
The insurance sector is central to other oil-producing nations in the MENA region, like Saudi Arabia and the UAE, so there is no reason to expect that the opportunity offered by Syria’s oil sector would be any less important for the dynamism of the economy overall.
Cautious optimism
The leader of the rebel faction that toppled Assad, Mr Abu Mohammad al-Jolani, has promised “dignity, justice and freedom” for all Syrians. If he holds true to his word, this can also only be good news for the insurance sector although at the time of writing, many foreign government heads are holding off on making a judgement, preferring to make a decision based on actions rather than words.
Gross written premium of the entire Syrian insurance market were estimated at around $22m in 2023, which gives some sense of the level of underinsurance as well as the potential for growth.
Prior to the overthrow of the Assad government, there were hopes that health, life and motor insurance might prove to be growth drivers. To that end, in 2023, the SISC produced guidelines directing insurers to stop requesting a traffic clearance document when insuring a vehicle to sever the link between the clearance certificate and the insurance policy.
A few months later, the Ministry of Health led the development of Syria’s strategy for primary health care for 2023-2027 through a participatory process. The process provided a roadmap to achieve universal health care in the country.
What the experts are saying
To get a sense of how leaders of the insurance sector are viewing recent developments, we caught up with General Arab Insurance Federation secretary general Chakib Abouzaid who expressed his own realistic views.
“In my humble opinion, I can see the coming developments,” he said. “In the short term, instability will remain; and will continue impacting Lebanon mainly, Jordan and Palestine.
“In the medium term, UN sanctions and US Caesar’s restrictions should be removed,” he said.
Mr Abouzaid was referring to the Caesar Syria Civilian Protection Act of 2019, US legislation that sanctions the Syrian government, including Syria’s former president, for war crimes against the Syrian population.
“This will lead to an increasing interest in the Syrian economy. GCC investors are very much interested in coming back to Syria. Moreover, part of the Syrian diaspora will return and invest in the country,” he said.
But is in the longer term that Mr Abouzaid sees most hope.
“In the long term, rebuilding will be a great opportunity for investors, construction companies, mainly from Türkiye and the GCC; and, of course, for insurance companies,” he said.
“The local insurance industry will benefit in the medium and long term; however, there are two issues to be addressed. The ‘central’ role of the state in the economy should be limited to strategic industries - and insurance regulation must be revisited.
“The role of the state-owned Syrian insurance company will evolve to make it a ‘regular’ competitor, similar to private companies. Companies will have to recapitalise and invest heavily in HR; the private sector will start disputing the role of the state-owned company, whose market share will shrink over the time,” he said.
However, Mr Abouzaid also expressed a note of caution.
“As long as the geopolitical situation in the region is not stable, there will be uncertainty on the future of the economy and insurance in Syria,” he said. M