On Opportunities and Challenges in the Middle East

With Mr. Zuhair Atout CEO of Apex Insurance, host to the Amman Speciality Lines Forum

Host to a shifting and potentially combustible population mix drawn in from the neighbouring conflict zones; resource-poor and lacking the wider mineral wealth of its neighbours, history and nature has not been so kind to Jordan.  Yet as a moderate politically tolerant country, its society has been largely spared the drama of the upheavals in the Arab world over the past two turbulent years. Enjoying one of the highest standard of livings, with GDP growing at 7% annually over the last decade, the Jordanian economy is one of the most robust, open and competitive in the region. Whilst instability continues to dog insurance centres like Bahrain, as a natural commercial gateway, Jordan’s capital Amman is staking a claim to be the new hub for reinsurance into the Middle East and Gulf area.

As a sign of this growing confidence, backed by the General Arab and Jordan Insurance Federations, the highly ambitious and well-connected broker Apex Insurance successfully hosted last month the inaugural Specialty Lines Forum in Amann. Over two hundred delegates coming from at least twenty countries were attracted to a popular agenda focusing on products and capabilities. There has been plenty of debate over the years about the delivery of insurance to the Arab audience, specifically the concept of Islamic insurance, Takaful; that Apex chose to move on the discussion from the question of “how?” to “what?” was a progressive sign for those of us in the specialist end of the industry.

I was delighted to present a key note address at the opening session and then in the course of two intense days enjoyed a series of interactive panel discussions covering a broad range of topics. We heard how demand was racing for professional liability and D&O from the large number of financial institutions domiciled in the Gulf region. Investment in the energy sector and infrastructure was priming the supply of project cargo proposals and wider interest in supply side business interruption coverage. Most poignantly since we were at the Grand Hyatt, the scene of the last and only major terrorist incident in Amman seven years ago, it was less surprising to learn that the demand for political violence insurance since the Arab Spring is growing significantly in the local markets.

Judging by the number of overseas speakers and attendees at the Apex Forum, the international reinsurance community has a desire and is well positioned to provide the required expertise and capacity in response to the developing Middle East opportunity. The task now is to build more robust distribution channels to improve the business flow from the region to specialist reinsurers and here both the brokers and the local insurance companies have a role to play.

The challenge for the growing network of brokers is to remain entrepreneurial whilst keeping pace with the increasing demands of reinsurers for fuller more compliant risk information. Improving the data quality of business proposals is a priority. In tandem the local insurers should also be more proactive in the marketing of specialist products. Yet as AM Best recently demonstrated in its MENA analysis, those insurers that depend disproportionately on reinsurance commission to support their financial performance, participating less in the technical result of the business, offer little in the promotion of local underwriting skills in the specialist sectors. Risk retention levels should therefore increase.

So work is still to be done but as a first step the Apex Forum was excellent in facilitating a two way transfer of knowledge. The local delegates came away with a deeper appreciation of the types of products and coverage now available and the international representatives, a clearer understanding of the demands of buyers on the ground. For the Jordanian insurance community, who superbly showcased the attractions of Amman as a centre to do business, the question being considered must be whether they repeat the Forum next year; I for one hope that they do.

One thought on “On Opportunities and Challenges in the Middle East

  1. Dear Roger,

    Thanks for the vote of confidence, the conference would have never been a success without you & the rest of the panel of speakers, head of sessions & deelgate that we had. Thank you all. By the way we had over 240 delegates from 26 countries. Thanks again & hopefully we can build up on this.

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