BizBahrain Magazine Sep-Oct 2017

Highlights | Banking & Finance
Positive results for
Bahrain Insurance sector
The Central Bank of Bahrain announced
that the insurance industry has shown
positive results in the year 2016, with
general insurance business (including
Medical insurance business) contributing
81% to the gross premiums.
A significant part of such results
attributed to a surge in Medical insurance,
which has increased from BD 52.20
million in 2015 to BD 62.11 million in
2016, showing an increase of around 19%
and representing almost 23% of the total
premiums/ contributions written in the
insurance market in 2016.
Total gross premiums in Motor
insurance has increased from BD 76.16
million in 2015 to BD 78.88 million in 2016,
showing an increase of around 4%. Motor
insurance is the largest in terms of gross
premiums which represented around
29% of the total premiums/contributions
written in 2016.
Total gross contributions of Takaful
Firms registered BD 60.43 million in 2016.
Gross contributions of Takaful Firms
represent around 22% of the total Bahrain
gross premiums/contributions in 2016.
By end of 2016, Bahrain’s domestic
insurance market comprised of 25 Locally
Incorporated Firms and 11 Overseas
Insurance Firms (branches of foreign
companies) carrying out Insurance,
Reinsurance, Takaful, Retakaful and
Captives business in Bahrain. The
locally incorporated firms consisted
of 14 Conventional Insurance Firms, 6
Takaful Firms, 2 Reinsurance Firms, 2
Retakaful Firms and 1 Captive, while
Overseas Insurance Firms consists of
8 Conventional Insurance Firms and 3
Reinsurance Firms. In addition, there are
a substantial number of firms restricted
to carry out business outside Bahrain and
insurance ancillary services.
By end of 2016, there were five
conventional Reinsurance Firms and two
Retakaful Firms in Bahrain. The gross
premiums/contributions of Reinsurance
and Retakaful Firms reached BD 378.97
million in 2016.
Gross premiums/contributions
generated in the domestic market
amounted to BD 272.04 million (US$ 721.60
million) in 2016 compared to BD 272.81
million (US$ 723.63 million) in 2015.
Long-term (life and savings products)
insurance generated gross premiums/
contributions amounted to BD 51.62
million (US$ 136.92 million) in 2016.
The long-term insurance premiums/
contributions represented 19% of the
total premiums/contributions written by
insurance market in Bahrain in 2016.
Fire, Property & Liability insurance
premiums/contributions represented
15% of the total premiums/contributions
written by insurance market in Bahrain in
2016. Fire, Property & Liability insurance
premiums/contributions totaled BD
40.31 million (US$ 106.92 million) in 2016
compared to BD 47.32 million (US$ 125.52
million) in 2015.
Bahrain is fast becoming a hub
for major regional and international
reinsurance and retakaful firms.
Solidarity Takaful
to merge with Al Ahlia
Insurance
Solidarity General Takaful, aims to
consolidate its position as one of the
top insurance players in Bahrain through
its merger with Al Ahlia Insurance
Company which will be effected in
December 2017.
The combined entity, which is set to
be named "Solidarity Bahrain", will have
a paid-up capital of BD11.2 million and
an estimated 15 % market share with 10
branches serving customers throughout
the country, making it the largest Takaful
Insurance Company in Bahrain.
Solidarity General Takaful
shareholders will be entitled to receive 2.5
shares of Al Ahlia stock for each share of
Solidarity General Takaful, on the basis of
the independent valuations as required by
the Central Bank of Bahrain.
In order to facilitate the merger,
Al Ahlia shareholders approved the
conversion of the insurance license from
conventional to Islamic insurance license
AbdulEllah Ashraf Beau Jawad Mohammed
(Takaful). They also approved the increase
of the authorised share capital of Al Ahlia
to BD12m.
AbdulEllah Al Qassimi, Vice-chairman
of Al Ahlia said, "Under Solidarity Bahrain,
we will draw on our decades of experience
to push the boundaries of customer
service innovations and remain focused
on delivering outstanding returns to our
stakeholders. The merged human resource
base will provide for the range of a strong
and capable human capital pooled from
within the existing resources."
Ashraf Bseisu, Solidarity Group
Holding chief executive said, "We
believe that consolidation has become
a necessity to create larger and stronger
financial institutions capable of offering
a unique customer experience. Solidarity
Bahrain, the new merged entity, will result
ultimately in being the largest Takaful
company and one of the leading top-tier
insurance players in Bahrain."
Solidarity Bahrain will be headed
by Jawad Mohamed, who said, "This
is the first insurance industry merger
Bahrain has seen in 20 years. We expect
the merger to significantly intensify and
strengthen our combined ability to serve
our retail customers and corporate clients
that made both Solidarity General Takaful
and Al Ahlia successful.”
64 September-October 2017