The combination of economic growth, multifaceted political landscape, substantial infrastructure investments and highly organised public-private finance initiatives have created ripe conditions for a surge in demand for specialist insurance in the Middle East.
Vincent Vandendael, Lloyd’s Chief Commercial Officer, said: “As the Middle East develops, there is a significant requirement for innovative insurance solutions to support economic growth. We see lines such as trade credit, political risk, public private finance initiatives, warranties and indemnities and mining as a growth opportunity as the regional economies diversify and require increasingly sophisticated risk transfer mechanisms. "Renewable energy is another expanding class of business for Lloyd’s, said Vandendael, who added that Lloyd’s and the international market could bring significant expertise to bear in this area. Takaful reinsurance – a form of reinsurance that is compliant with Islamic or sharia law – is another growth area, he said. “We are looking at what more we can do to support the growth of this segment”.
Vandendael continued: “Insurance plays a key role in supporting economic growth, and a clear demonstration of the value of insurance is in the payment of claims. In 2016 we’ve paid a total of USD 120m in claims for losses arising from the United Arab Emirates, but it’s not the value of the pay-outs that it’s important. Far more important is what this money is used for – to help communities, businesses and governments recover from disaster. At Lloyd’s we are proud of the contribution that we make to building greater resilience and speeding up recovery from catastrophes around the world.”
According to City Risk Index 2015 - 2025, the Middle East region will generate US$ 2.4 trillion in GDP in the coming decade, but 15 percent of this economic growth is at risk from 18 man-made threats such as a market crash, sovereign default, terrorism, power outages and cyber-attacks. Together, these account for US$ 213 billion or approximately 58% of GDP at risk.
The shifting risk landscape in the Middle East requires insurers to be more innovative than ever.
