MANAMA: The Middle East insurance market has the potential for better returns than the West because it is not hampered by the legacy the industry has elsewhere from consolidating business after a period of takeovers.
That is the view of Ernst & Young (E&Y) MENA Insurance leader Justin Balcombe.
He said the industry in the region was split between small family run businesses, more developed companies looking for expansion regionally and international firms with a presence in the market.
"The regional industry has gone from a young industry to one that is now maturing and we can look to see some consolidation in the future though perhaps not among the smaller family owned businesses."
He was speaking at an insurance breakfast briefing organised by Ernst & Young at the Sheraton Hotel.
The event featured a market update on the regional and global insurance sector followed by queries and feedback from participating delegates. The briefing was attended by industry representatives and regulators.
"The financial crisis and resulting economic recession are reminders that insurance companies are exposed well beyond the risk from insurance policies," said E&Y assurance partner Peter Griffiths.
"Extreme risk events can catch even well-prepared executives off balance. The insurance industry has learned many lessons. For the past year, leading insurers have been responding to the pressures of an evolving economic landscape. Insurers are not only applying strategies to manage and protect their businesses, but they are focusing on a growth agenda that will reshape their organisations and guide them in the future."
E&Y Bahrain office managing partner Essa Al Jowder said insurance companies expect to emerge stronger from the downturn by capitalising on opportunities to extend their market reach, through enhanced products and taking market share away from their competitors.
"Understanding the impact of new regulation in the new operating environment will give the attendees a better perspective while developing strategies to expand or grow. "