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Atlas Magazine [4] has seized this opportunity to draw up a statistical survey on the insurance markets of the GAIF member countries. The analysis has been designed to address premium growth between 2010 and 2014, along with some indicators of activity.
GAIF, The current situation
The GAIF [5], whose establishment dates back to 1964, counts by the end of 2013 nearly 330 insurance and reinsurance companies from twenty member countries: Lebanon, United Arab Emirates, Jordan, Saudi Arabia, Kuwait, Egypt, Syria, Tunisia, Libya, Sudan, Bahrain, Oman, Yemen, Qatar, Algeria, Palestine, Morocco, Iraq, Mauritania and Somalia.
This huge market, extending over two continents, is scrambling to play out as a specific entity. Several constraints are hindering its take-off, the most important of which pertains to its political, economic and social instability.
Furthermore, regional insurers are facing several other structural challenges such as:
- a high motor loss experience,
- a poor retention rate,
- a perfectible risk management policy,
- the lack of expertise among local insurers,
- the absence of regulation homogeneity,
- the absence of a framework specific to Takaful insurance,
- the weakness of the regulatory authorities,
- the lack of training structure.
GAIF, evolution of premiums: 2010-2014
Altogether, the GAIF member States, with the exception of Somalia(1) , reported 32 445 million USD in premiums in 2014, compared to 22 443 million USD in 2010, a 44.56% increase. Within the same period, the entire global premiums grew by no more than 10%.
With 26 338 million USD in premiums and 81.18% in market shares, non life insurance is the undisputed leader in 2014. The life class of business, which has hardly progressed since 2010 (+7%), accounts for 18.82% of the overall revenues in 2014.
(1) Data non availableOn the market level, the growth prize during the 2010-2014 period goes to the Gulf countries which posted the highest progression rate. Saudi Arabia is in the lead with an 85.9% growth, followed by Oman (60.2%), Qatar (58.3%), United Arab Emirates (52.1%) and Kuwait (41.6%).
Despite the overall good performance made by the GAIF countries in the course of the recent five years, premium collection remains marginal. In relation to global premiums, the contribution of the area remains insignificant, not exceeding 0.66% in 2014. The insurance penetration rate in the GAIF region is only 1.1% compared to 6.2% at the global level.
The GAIF Market structure
 View of Lebanon © Lebnen18 [6], CC BY-SA 3.0 [7] |
Arab insurance is characterized by its heterogeneity, with three kinds of markets living side by side in the region: the prosperous markets, those whose performance is still below in comparison with the three leaders, and those in which the insurance industry is struggling to survive.
In terms of premiums, the first group is dominated by three countries that, alone, account for nearly two thirds of the premiums collected (63%). United Arab Emirates come first with 9.1 billion USD in premiums in 2014, followed by Saudi Arabia with 8.1 billion USD. Morocco comes third with a premium volume of 3.155 billion USD. It is thanks to the establishment of an enabling business environment, the introduction of compulsory insurance, and the undertaking of a whole set of reforms, that insurance business has developed in those markets.
Lebanon, Tunisia, Egypt, Algeria, Bahrain, Jordan, Kuwait, Oman and Qatar may be ranked in a second subgroup. Insurance in most of these countries has reported relatively constant performance since many years. The nine countries of this group account for approximately 33% of the overall Federation's turnover.
The last third of the market is still undergoing hardships of all kinds that, oftentimes, go beyond the insurance framework. Libya, Iraq, Sudan, Syria, Mauritania, Palestine and Yemen are in this position.
Density and insurance pentration rate in the GAIF
Insurance density in almost all GAIF countries amounted to 88.4 USD in 2014, well below the global average value which is set at 662 USD. Only United Arab Emirates and Qatar are above that average with per-capita premium of 971.4 USD and 677 USD respectively. For Bahrain, this indicator stands at 530 USD.
Insurance penetration rate remains quite low for the 19 countries under study. It is set at 1.14%. The weakness of this parameter is indicative of a high development potential for regional markets.
GAIF: main indicators in 2014
Figures in USD| Population in millions | PIB in billions | Inflation rate | Number of insurance companies | Written premiums in millions | Insurance penetration rate | Insurance density | |
|---|---|---|---|---|---|---|---|
United Arab Emirates | 9.4 | 411 | 2.30% | 60 | 9132 | 2.20% | 971.4 |
Saudi Arabia | 29.4 | 752 | 2.70% | 32 | 8124 | 1.08% | 276.3 |
Morocco | 33.5 | 107 | 0.40% | 17 | 3155 | 2.90% | 94.2 |
Egypt | 83.4 | 286 | 10.40% | 32 | 1913 | 0.70% | 22.94 |
Lebanon | 4.9 | 46 | 0.70% | 51 | 1489 | 3.20% | 303.9 |
Qatar | 2.172 | 210.1 | 3.10% | 18 | 1471 | 0.70% | 677.3 |
Algeria | 39.9 | 226 | 2.90% | 20 | 1436 | 0.64% | 36 |
Oman | 3.9 | 82 | 1% | 22 | 1035 | 1.26% | 265.4 |
Kuwait | 3.5 | 179 | 2.60% | 7 | 1007 | 0.56% | 287.7 |
Tunisia | 11.1 | 49 | 4.90% | 21 | 837 | 1.70% | 75 |
Jordan | 7.4 | 36 | 2.90% | 25 | 745 | 2.07% | 100.7 |
Bahrain | 1.362 | 33.85 | 2.70% | 36 | 722 | 2.10% | 530.1 |
Iraq* | 34.81 | 223.5 | 0.10% | - | 383 | 0.17% | 11 |
Sudan* | 39.35 | 73.81 | 36.90% | 16 | 313 | 0.42% | 8 |
Libya* | 6.259 | 41.14 | -17.30% | - | 274 | 0.70% | 43.8 |
Palestine | 4.295 | 12.74 | 2.70% | - | 171 | 1.30% | 39.8 |
Yemen* | 26.18 | 36.13 | 11% | 13 | 116 | 0.32% | 4.4 |
Syria | 22.16 | 40.41 | 15 | 94 | 0.23% | 4.2 | |
Mauritania | 3.97 | 5.061 | 3.50% | 13 | 28 | 0.60% | 7.1 |
Total GAIF | 366.958 | 2850.741 | 4.08% | 398 | 32 445 | 1.14% | 88.4 |
World | 7217.9 | 77 394 | - | - | 4 778 248 | 6.20% | 662 |
GAIF: evolution of premiums: 2010-2014
in thousands USD| 2010 | 2011 | 2012 | 2013 | 2014 | 2010/2014 evolution | 2014 shares | |
|---|---|---|---|---|---|---|---|
United Arab Emirates | 6 003 970 | 6 514 033 | 7 153 557 | 8 033 919 | 9 131 596 | 52.10% | 28.14% |
Saudi Arabia | 4 370 520 | 4 967 110 | 5 576 852 | 6 411 093 | 8 123 834 | 85.90% | 25.04% |
Morocco | 2 621 018 | 2 788 908 | 3 090 547 | 3 317 387 | 3 155 578 | 20.40% | 9.73% |
Egypt | 1 551 151 | 1 471 022 | 1 753 557 | 1 741 338 | 1 913 157 | 23.30% | 5.90% |
Lebanon | 1 151 822 | 1 249 656 | 1 319 103 | 1 415 998 | 1 488 844 | 29.30% | 4.59% |
Qatar | 929 000 | 1 154 600 | 1 114 600 | 1 424 900 | 1 471 000 | 58.30% | 4.53% |
Algeria | 1 120 285 | 1 148 444 | 1 280 246 | 1 467 115 | 1 435 777 | 28.20% | 4.42% |
Oman | 646 113 | 728 499 | 856 692 | 948 429 | 1 035 000 | 60.20% | 3.19% |
Kuwait | 711 200 | 804 300 | 903 700 | 948 000 | 1 007 000 | 41.60% | 3.10% |
Tunisia | 785 258 | 787 971 | 829 872 | 862 152 | 837 351 | 6.60% | 2.58% |
Jordan | 580 830 | 619 152 | 652 071 | 695 945 | 744 649 | 21.99% | 2.30% |
Bahrain | 560 708 | 524 538 | 634 087 | 691 235 | 722 466 | 28.80% | 2.23% |
Iraq(1) | 160 056 | 288 171 | 316 988 | 348 686 | 383 555 | 139.60% | 1.18% |
Sudan(2) | 294 100 | 289 100 | 337 200 | 312 600 | 312 600 | 6.30% | 0.96% |
Libya(3) | 325 800 | 140 700 | 273 900 | 273 900 | 273 900 | -15.90% | 0.84% |
Palestine | 125 700 | 146 000 | 144 500 | 158 700 | 171 000 | 36.00% | 0.53% |
Yemen (4) | 84 381 | 80 600 | 98 466 | 110 490 | 116 014 | 37.50% | 0.36% |
Syria | 405 700 | 373 000 | 237 000 | 155 600 | 94 300 | -76.80% | 0.30% |
Mauritania | 15 000 | - | - | - | 28 000 | 87% | 0.08% |
Total | 22 442 613 | 24 075 805 | 26 572 940 | 29 317 490 | 32 445 625 | 44.57% | 100% |
(2)Turnovers 2013 and 2014 estimated by Atlas Magazine
(3)Turnovers 2013 and 2014 estimated by Atlas Magazine
(4)Turnover 2014 estimated by Atlas Magazine Sources: Sigma, Atlas Magazine, Arig 2015 report
GAIF: Breakdown of premiums in 2014: life and non life insurance
in USD| Life | % life | Non life | % non life | Total | |
|---|---|---|---|---|---|
United Arab Emirates | 2 354 284 000 | 25.79% | 6 777 312 000 | 74.21% | 9 131 596 000 |
Saudi Arabia | 240 943 120 | 2.97% | 7 882 891 280 | 97.03% | 8 123 834 400 |
Morocco | 1 043 582 073 | 33.08% | 2 111 996 006 | 66.92% | 3 155 578 079 |
Egypt | 855 403 000 | 44.72% | 1 057 754 890 | 55.28% | 1 913 157 890 |
Lebanon | 430 238 758 | 28.90% | 1 058 605 459 | 71.1 | 1 488 844 217 |
Qatar | 64 000 000 | 4.36% | 1 407 000 000 | 95.64% | 1 471 000 000 |
Algeria | 97 549 000 | 6.80% | 1 338 228 000 | 93.20% | 1 435 777 000 |
Oman | 95 000 000 | 9.18% | 940 000 000 | 90.82% | 1 035 000 000 |
Kuwait | 191 000 000 | 19.00% | 816 000 000 | 81% | 1 007 000 000 |
Tunisia | 145 396 556 | 17.37% | 691 955 269 | 82.63% | 837 351 825 |
Jordan | 275 880 584 | 37.05% | 468 769 270 | 62.95% | 744 649 854 |
Bahrain | 151 767 567 | 21.01% | 570 698 673 | 78.99% | 722 466 240 |
Iraq* | 64 159 524 | 16.73% | 319 396 077 | 83.27% | 383 555 601 |
Sudan* | 11 500 000 | 3.68% | 301 100 000 | 96.32% | 312 600 000 |
Libya* | 6 200 000 | 2.27% | 267 700 000 | 97.73% | 273 900 000 |
Palestine | 3 900 000 | 2.29% | 167 100 000 | 97.71% | 171 000 000 |
Yemen* | 38 736 600 | 33.39% | 77 277 900 | 66.61% | 116 014 500 |
Syria | 35 600 000 | 37.76% | 58 700 000 | 62.24% | 94 300 000 |
Mauritania* | 2 200 000 | 7.85% | 25 800 000 | 92.15% | 28 000 000 |
Total 2014 | 6 107 340 782 | 18.82% | 26 338 284 824 | 81.18% | 32 445 625 605 |