1 “ the growth imperative: a mena perspective” yassir albaharna, fcii ceo, arab insurance group...
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““The Growth Imperative: The Growth Imperative: a MENA Perspective” a MENA Perspective”
Yassir Albaharna, FCII Yassir Albaharna, FCII
CEO, Arab Insurance Group (Arig)CEO, Arab Insurance Group (Arig)
International Insurance Society International Insurance Society Tuesday, 15 July 2008, Taipei Tuesday, 15 July 2008, Taipei
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MENA Region
MENA region consists of the following countries:
– GCC: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates – North Africa: Algeria, Egypt, Libya, Mauritania, Morocco, Sudan, Tunisia– Levant: Iraq, Jordan, Lebanon, Palestine, Syria and Yemen, Iraq
Source of information: Arig Annual Insurance Reviews, directories and internal data andSigma No. 4/2007
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Insurance Penetration and Density
CountryInsurance
penetration
Insurance density in
US$
Algeria 0.5% 18.8 Bahrain 1.8% 423.9 Egypt 0.8% 11.3 Jordan 2.6% 65.2 Kuwait 1.1% 241.5 Lebanon 2.9% 160.0 Libya 0.3% 25.9 Mauritania 0.4% 3.3 Morocco 3.0% 55.7 Oman 0.8% 134.2 Palestine 1.9% 21.0 Qatar 2.2% 693.4 S. Arabia 0.4% 63.1 Sudan 0.6% 5.9 Syria 0.4% 7.5 Tunisia 2.0% 59.8 U.A.E. 2.2% 610.3 Yemen 0.3% 2.4
Total Average 1.0% 41
Insurance penetration and density- by Sub region
171
24 21
1.0%
1.4%
1.0%
0
20
40
60
80
100
120
140
160
180
200
GCC Levant NAF
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
Insurance density Insurance penetration
•1.03% insurance penetration (0.87% Non Life and 0.17% Life) compared to 7.5% worldwide •US$ 41 insurance density against US$ 555 worldwide•GCC represented the highest insurance density
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Economic Overview /1
642,553 656,391
821,169 965,630
1,135,970
257,590 261,321 273,310 279,793 286,621
1
2,494 2,512 3,005
3,451 3,963
050010001500200025003000350040004500
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2002 2003 2004 2005 2006
GDP
per c
apita
US$
Economic Indicators - MENA region
GDP (US$m) Population (000) GDP Per Capita (US$)
•Yet, GDP 2006 represents 2.3% of the world total
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Economic Overview / 2
GDP per Capita 2002-2006 in MENA region
10,612
1,568
9,260
7,771
6,3665,974
1,3421,2711,1281,221-
2,000
4,000
6,000
8,000
10,000
12,000
2002 2003 2004 2005 2006
Energy
Non-Energy
Energy Based Economies: Algeria, Bahrain, Kuwait, UAE, KSA, Oman, Qatar, Libya
Non Energy Based Economies : Egypt, Jordan, Lebanon, Mauritania, Morocco, Palestine, Sudan, Syria, Tunisia, Yemen
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Insurance Premiums
- 500 1,000 1,500 2,000 2,500 3,000
In US$ million
U.A.E.Morocco
Saudi ArabiaEgypt
LebanonKuwait
Algeria Tunisia
Qatar Jordan
OmanBahrainSudan Libya Syria
PalestineYemen
MENA - Gross premium by market in 2006
Life NL
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Insurance Growth
MENA insurance market - gross written premium 2002-2006
6,477
7,161
5,3446,021
7,104
8,271
9,797
8,501
9,925
11,720
1,3971,1401,133
1,9231,654
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2002 2003 2004 2005 2006
GW
P i
n U
SD
mil
lio
n
Total Life Non-Life Linear (Total)
Currently one of the fastest growing insurance market in the world
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Growth Drivers
+ Buoyant economies & emerging markets + Infrastructure spending + New products: health & life
+ Development of Takaful+ Privatization of state owned companies + Emerging financial centers: Dubai, Bahrain & Qatar
- Awareness - Enforcing regulations - Political stability - HR & professional skills development- Membership in WTO & GATS
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Profit Drivers
+ Reinsurance over-dependence+ Portfolio composition + Low cat potential + litigation + investor expectations + taxation
- Competitive pressures- Pricing adequacy - Fragmented markets - Capital management - Product cycle - M&A or cross boarder integration
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Conclusions
1. The economic realities of today’s MENAinsurance markets make it easier to achieveprofitable growth - but for how long?
2. Choosing between investing for growth anddelivering profitability from existing business is asource of tension
3. Most companies cut costs and increaseproductivity, but the ability to drive continuousand profitable top-line growth is under threat