It is February, and the world is getting used to a new Trump Presidency in the US, tougher Brexit, greater nationalism and greater populism in the world, with the migration problem still a hot potato, and tensions in the Middle East still brimming. But growth prospects in the region are still strong with recovering oil prices adding to the glimmer.
On the insurance front, technology is giving the insurance business a new lease of life and, with the Middle East being a highly connected region, we bring you a must read Guest Editorial on how technology can indeed make insurance more relevant and even more appealing, more affordable and better understood. It is not a pipedream, but a possible reality. So chin-up, belt up and ride the wave of technology which offers disruptive innovation as a milestone growth opportunity for insurers. Check out our special package of stories on Big Data, analytics and blockchain for greater authenticity and security – the buzzwords of the day that InsurTech aside sees even insurers investing in tech-interrupters or interlopers.
Much is happening in the Middle East though the year has started quietly. On the diary for February, we have the CBB bringing MEIF in Bahrain to explore current challenges and future trends, while GR is launching a brand new Dubai World Insurance Congress with DIFC IA and DIFC to focus on the future of the insurance industry in the Middle East.
As for us, our Cover Story is on the new wave of stringent regulations across the Middle East which seems set to trigger the much-needed consolidation in the market. Many feel that consolidation is long overdue, but is this the watershed moment? The industry is suffering from competition, over-capacity and cheap rates. Can regulators step in to change the market – is it a matter of authority, clout or just persuasive powers?
Reinsurers have a big say in the fate of the region. The January renewals saw mixed signals in different classes though generally there was intense pressure on prices and terms. The unique friendly role of Arab reinsurers is being challenged as even they come under the pressure of global trends for consolidation to get size.
Our Country Profile is on Saudi Arabia with a new normal in sight as the market has responded glowingly to regulatory intervention and companies are seeing healthy bottom lines, though growth rates are slowing down. There is a greater buzz about consolidation on the horizon.
Much is happening on the takaful front where new companies are setting up even in Africa, there are successful IPOs in the UAE, new authorisation procedures are being drawn up in Pakistan, and predictions are that the global sukuk market will remain subdued in 2017. But there are several pockets of growth, including in the pensions front.
Our special focus is on China where new regulations for agricultural cooperatives there provide a gateway for the introduction of takaful. Though China has some 23 million Muslims accounting for less than 1.8% of the population, the takaful model may appeal in business.
Sivam Subramaniam
Editor-in-Chief
Middle East Insurance Review