Insurance results are encouraging say experts

A number of insurance experts and professionals in Bahrain said any growth achieved in the insurance sector under the current circumstances is an encouraging sign.

This reflects the healthy status of the sector, as growth in the insurance sector is synonymous with economic growth in general, they said, noting that results of the second quarter of this year for most insurance companies in Bahrain show promising indicators, and most of the companies, especially the large ones that announced their results, achieved better performance than last year, which was better than the previous one.

Therefore, the insurance results and indicators are positive and encouraging, especially with regard to investment due to the development the sector is witnessing, the rise in interest rates, and the improvement in deposit rates.

They said Bahrain has 21 insurance companies and 10 foreign companies’ branches, which represents a large number in relation to the market size, noting that the three largest insurance companies in the kingdom account for about 80 per cent of the local market.

They called on the Central Bank of Bahrain and other parties concerned to play a role in encouraging mergers and acquisitions among companies, notably small companies likely to face greater challenges, especially with the change in the regulatory system, liquidity requirements, capital adequacy, and the new accounting standard that imposes a radical change in accounting methods for insurance contracts.

This is a good standard, but it poses greater challenges to smaller companies or those that have no adequate financial solvency, they noted.

They said there is strong competition in the insurance market, which causes companies to lower their prices to attract more customers.

They pointed out that lack of awareness among the insured is the real problem facing insurance companies which are always discussed in the Bahrain Insurance Association, stressing that companies do not intentionally evade obligations, as the insurance contract is that of compensation, and the goal of insurance is neither for the insured to make profit nor for the company to evade its obligations, but there are contract terms that all parties adhere to.

Source: https://www.gdnonline.com/Details/1292244/Insurance-results-are-encouraging-say-experts