The Arab Insurance Group (Arig), the Bahrain-based regional reinsurance group, is to enter the life insurance market as part of an expansion made possible by a recovery in profits, deputy general manager Bader al-Wahidi says. The company is due to announce its second year of profits following heavy losses in the early 1990s.
A study on developing life insurance products for the region is nearing completion. The launch will probably be done in joint venture with international firms for product development, and with local companies for distribution, Al-Wahidi says.
Al-Wahidi says there is room in the region’s life insurance market, particularly for providing products tailored to the Arab market. The two main life companies currently operating are American Life Insurance Corporation and Eagle Star, both catering mainly for expatriates. Life insurance accounts for only 11.5 per cent of total Arab insurance premiums, compared with 53 per cent worldwide. The region spends about $500 million a year on life insurance, Al-Wahidi says.
International consultant Bain & Company is due to complete a study in May on how to diversify Arig’s traditional reinsurance business. Arig wants to expand its range of products by offering, for example, bankers bonds to regional institutions and deposit guarantees for local banks. Arig began expanding its business development and marketing departments in 1993 and plans further growth in 1994 (MEED 4:6:93).
The results of the two studies will be presented at Arig’s general assembly on 11 May, when the company’s annual results for 1993 will be announced. ‘Results for 1993 are better than 1992. The insurance market is still hardening and we expect to post even better results in the next two years,’ Al-Wahidi says.