Bahrain's insurance sector faces a challenging period as the knock-on effects of low oil prices on the country's hydrocarbons sector and wider economy result in households and businesses adopting more cautious approach over the coming years. As such, we expect both life and non-life insurance penetration to remain fixed at their current, relatively low rate through to 2019. That said, we see opportunities emerging in a number of sub-sectors through this period, not least health insurance.
Having bounced back strongly from the Arab Spring episode of early 2011, Bahrain's insurance sector has enjoyed substantial growth in recent years, with growth in underwriting activity supported by a combination of robust economic expansion and a growing expatriate population. That said, penetration (including both the life and the non-life segments, is relatively low at around 2.1% of GDP. This is accentuated by low take-up among non-Bahraini nationals who comprise more than half of the resident population of the kingdom. Further, it is flattered by the inclusion of (substantially compulsory) health insurance premiums in the non-life segment. The lack of increase in total penetration (and the measured rise in density, which is set to grow over 2015-2019, highlights several challenges and constraints. These include: the lack of potential for life insurers to reach new clients; the impact of low interest rates on the sales of life insurance and other savings solutions; and the persistent and fairly brutal price competition in many areas of the non-life segment. That said, among the factors currently driving growth in insurance premiums is the government's decision in 2013 to extend its compulsory health insurance policy to the expatriate community, a move which has seen underwriting activity in this segment increase substantially in recent months.
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The Bahrain Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's Bahrain Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Bahraini insurance industry.
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Market Report, "Bahrain Insurance Report Q4 2015", published
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