Changing Insurance Landscape offers Major Opportunities to Global and Local Companies
24 April 2007
The Middle East is emerging as a highly dynamic insurance market, as attitudes towards the sector shift and consumers look for a wider variety of financial products to support their long-term interests in the region.
A new report from Standard & Poor's Ratings Services points out that, provided the world average insurance premium of US$550 per capita is achieved, the GCC insurance market could be worth up to US$20 billion.
However, the penetration of all forms of insurance is low by global standards – European countries typically average around 10 percent for life insurance, for example, while countries in the Middle East hover around the two percent mark.
Standard & Poor's study suggests that the current market is valued at around US$4.6 billion, but points out that economic growth in the region, coupled with a sizable, underinsured population, is creating major opportunities both for local and global insurance groups.
One example of the increasing dynamism of the sector is the collaboration between Nexus, the region's largest independent financial advisor (IFA), and American Life Insurance Company (ALICO) AIG Life.
Following a distribution agreement in February 2007, Nexus has added a range of ALICO's life, critical illness and accident insurance products to its panel. In close cooperation, both Nexus and ALICO are committed to building on the success of the first quarter.
"We're seeing both increased demand and increasing sophistication in markets throughout the region, and the collaboration with ALICO AIG Life has helped us to offer a wider portfolio of best-of-breed products," said Mahmoud Nodjoumi, owner and CEO of Nexus.
"In particular, the availability of critical illness and accident insurance through Nexus has been welcomed by our clients, who look for greater peace of mind for themselves and their families," he added.
Christopher Bendl, General Manager for the Gulf Region at ALICO AIG Life, agreed: "The Gulf is definitely responding well to our multi-products and multi-market solutions for life, accident and health protection."
"Working with a company like Nexus, which is entirely focused on meeting its customers' needs and exceeding their expectations, has provided us with an additional impetus in 2007, and we see strong potential for growth moving forward," he added.