Benjamin Enyong’s Post

Reinsurance Challenges in the Somali Insurance Market The recent willingness of more regional and international reinsurance companies to provide reinsurance support to Somali insurance companies is considered to be a positive development for Somali insurance sector compared to the past couple of years. Although the Somali insurance market is considered an emerging market, with its low penetration rate and touchable challenges in securing good reinsurance treaties with regional and international reinsurers compared to East African Insurance market, highlight the complexities the sector faces. Several factors might contribute to these market difficulties in obtaining proper reinsurance support, especially in areas of securing property insurance, group personal accident, and third-party liabilities reinsurance support. 1. Low Market Penetration Despite Somali insurance market has growth potential compared to neighboring insurance markets but low insurance awareness among the Somali community remains a significant barrier to increasing market penetration compared to other East African countries and considered a primary contributor to the low market penetration. The limited understanding of Somali people of the importance of Insurance in their daily lives due to the traditional and tribe-based community insurance practices within Somali tribes which creates a serious market competition for formal Insurance business and considered one of the main factors of the low penetration rate and small premium based market, which makes difficult for insurance companies to spread risk effectively and making reinsurers partners Selective in their reinsurance support and sometimes suspicious of the profitability of the market. 2. Selective Reinsurance Support Even with lower insurance losses compared to neighboring countries, reinsurers are cautious about providing support due to absence of enough market data which makes reinsurance players more selective in providing required reinsurance support and capacity and prevented reinsurers from retaining more risk which leads to limited retention capacity particularly for Political violence and all risk covers. 3. Treaty Renewal Challenges With reinsurers becoming more selective and limiting capacity, renewals have become difficult for Somali insurers especially for property and liability policies, where reinsurers are tightening terms, requiring higher premiums or offering lower limits. Finally, despite these market challenges, I do believe a closer partnership between Somali insurers and reinsurers partners is essential to overcome these obstacles, in order to convince Regional and international reinsurers to engage more effectively with the Somali insurance market Somali insurer should take active steps to manage and mitigate risks through better reporting, transparency, and collaboration on loss-control strategies. #Insurance #Reinsurance #SomaliInsurance

Good work from Insurance Monitor and Lux Actuaries & Consultants. Well worth a read for those interested in the GCC insurance markets

#gcc: Weaker underwriting performance slows down profit growth of listed insurers in 9M 2024, to 4.5% from 8.0% in H1 2024, despite higher investment income. The highlights: #uae: Losses increase for several insurers since H1 2024, notably Al Ain Ahlia Insurance Company (P.S.C) (up by AED 37mn) and Al Buhaira National Insurance Co. (up by AED 23mn) from motor and general lines of business. #ksa: Earnings for insurers outside the top three players have dropped by 28% owing to medical business. #oman: Total losses of USD 6mn registered in 9M 2024, despite a strong recovery from LIVA in Q3 following hefty weather-related losses in H1 2024. Such losses have caused solvency ratios to deteriorate further for several UAE-based insurers, with at least (8) eight in breach of regulatory requirements. Together, these insurers represent 12% of total insurance revenue in 9M 2024. Notably, Takaful Emarat-Insurance (P.S.C) anticipates increasing capital to AED 211mn by the close of the rights issue subscription period on 26 November 2024. In Saudi Arabia, SALAMA Cooperative Insurance Co. and Saudi Enaya Cooperative Insurance Co. await shareholder approval for proposed capital increases, with EGMs scheduled for late November 2024. At the same time, United Cooperative Assurance / UCA and GULF GENERAL COOPERATIVE INSURANCE CO. have canceled their capital increase plans, citing improved profitability and the potential merger with Gulf Union Al Ahlia, respectively. The Saudi market is also evaluating at least two other mergers including MEDGULF Saudi Arabia (solvency: 71.2%) with Buruj Cooperative Insurance Company which if completed is expected to improve the creditworthiness of MEDGULF as the survivor, according to rating agency Moody's. Meanwhile, Dubai Islamic Insurance & Reinsurance Company (AMAN) faces setbacks, with both Abu Dhabi National Takaful P.S.C "Takaful" and Salama Islamic Arab Insurance Co. terminating their agreements to acquire AMAN’s insurance portfolios in Q3 2024. On a positive note, insurance revenue has increased across the region by 13.9%. Higher rates, mandatory coverage requirements, and ongoing market consolidation are underlying factors. Notably, Qatar Insurance Group saw a remarkable 60% increase in GWP from regional markets, largely driven by growth in medical business, likely from the UAE. Download your copy of the Q3 2024: GCC Performance Periodical in association with Lux Actuaries & Consultants Actuaries Nisha Braganza Shivash Bhagaloo #insurance #management #markets #economy #marketing #growth #mergersandacquisitions #sales

New report from Insurance Bureau of Canada provides the most recent data on the property and casualty insurance industry’s direct, indirect and induced impacts on the gross domestic product and employment. The report also highlights some of the key public policies that P&C insurers are advocating for on behalf of Canadians. Read the report below. #CDNInsurEconomy #CDNPoli

A good read. Especially when trying to explain what we do and the importance of it all.

Straight Talk about the Insurance Industry: Thriving in an Economy Tailored to Ensure Their Success They should thank governments for a framework that allows them to make such profits. Why doesn’t IBC allow comments on its’ Posts?!? Here are some observations. Critical Assessment: 1. Market Position: - Regulatory Advantage: Insurance companies thrive due to favourable regulations. Their profits are almost guaranteed by mandatory policies (e.g., auto insurance). - Government Support: Mandatory insurance laws ensure constant demand, reducing business risks compared to other sectors. 2. Economic Contribution vs. Dependence: - Reliance on Economy: The industry’s GDP and job contributions depend heavily on overall economic health. During downturns, they offset risks with higher premiums for consumers. - Indirect Subsidies: Investments in government bonds act as low-risk, high-return subsidies, further stabilizing the industry. 3. Job Creation and Quality: - Job Quality: The report boasts 297,000 jobs but doesn’t detail their quality. Are these high-paying and secure, or mostly low-wage roles? - Gender Statistics: While 60% of employees are women, it's important to see if they hold leadership roles or are in lower-level positions. 4. *Tax Contributions: - Tax Burden: The $12 billion tax contribution should be weighed against the industry’s total revenue. Are there significant tax breaks that reduce their effective tax rate? - Comparison: Are insurance companies paying their fair share compared to similar industries? 5. **Public Policy Influence:** - Self-Interest: The industry’s advocacy for policies like national flood insurance may primarily benefit them by expanding their market and reducing payout risks. - Policy Impact:Their influence can shape regulations to their advantage, possibly at the expense of consumer protection. 6. Investment Strategies: - Safe Investments: Heavy investments in government bonds ensure steady returns with minimal risk but do not necessarily foster economic innovation or growth. Conclusion: While contributing to economic growth, the P&C insurance industry benefits from a favourable regulatory framework and government policies. Their economic contributions should be viewed critically, considering their privileged market position.

In a critical initiative to support Ukraine's devastated economy, insurance broker Aon, alongside the US International Development Finance Corporation (DFC), has launched a $350 million war risk insurance scheme. The scheme includes a $50 million reinsurance facility, with DFC acting as the reinsurer for local insurers. ARX, a subsidiary of Fairfax Financial Holdings Limited, is the first firm to be certified as a qualified Ukrainian insurance company to access the reinsurance facility. Aon, DFC, and ARX will collaborate to build a portfolio of war risk insurance policies for companies operating in Ukraine and support ARX in expanding its war risk insurance offerings in the country. With the facility in place, qualified insurance companies can rapidly provide on-the-ground war risk policies to businesses in Ukraine. In the long term, this facility can encourage private market participation in Ukraine by other reinsurers, promoting a foundation of private investment essential for recovery. Additionally, $300 million is earmarked specifically for war risk insurance for Ukraine's healthcare and agriculture sectors, meeting the robust demand for accessible, affordable war risk insurance by private companies operating in Ukraine, which will only increase during reconstruction. Penny Pritzker, the US special representative for Ukraine’s economic recovery, underscored the importance of a robust insurance market in attracting investment. Meanwhile, Ukraine’s deputy economy minister, Taras Kachka, emphasised the scheme’s critical role for the private sector and expressed a desire for the private market to function independently. By drawing in private capital now Ukraine will be better prepared for reconstruction when peace arrives, ensuring projects can commence immediately, particularly in the less affected western regions. Explore further details by clicking here: https://lnkd.in/eUNuyHH2 #InsuringWar #WarRisk

Insurance density and insurance penetration are the key measures of a country's level of development in the insurance sector. Insurance density is the ratio of insurance premiums to a country's population. It shows how much each person in a country spends in insurance in terms of premiums. On the other hand, insurance penetration measures the contribution of insurance premiums to the Gross Domestic Product(GDP) of a country in percentage terms. As of 2022, Kenya's Life and Non-life insurance penetration rates were 1.1% and 1.2% respectively. As of 2020, the insurance density in Kenya was at KES 4787. At 2.3% IPR, which is below global averages, Kenya leads its East African counterparts in terms of insurance uptake .

In our most recent blog, Diligencia’s founder and CEO Nouri Bakkali shares information on recent changes in Saudi Arabia’s Insurance Sector. Saudi Arabia has recently established the Insurance Authority (IA) as the sole regulator for the insurance industry, bringing together the responsibilities previously held by the Saudi Central Bank (SAMA) and the Council of Health Insurance (CHI). This centralisation aims to foster a transparent, efficient and resilient insurance market. The IA is empowered to issue regulations, license companies, supervise activities, and manage disputes through the Committees for Resolution of Insurance Disputes and Violations. Early indicators are promising, with the sector showing a 14.6% growth in Q3 2023. With this momentum, the IA is poised to drive the sector forward through 2024 and beyond, setting a strong foundation for long-term development. Exciting times ahead for Saudi Arabia’s insurance industry! 🌟 https://hubs.ly/Q02Y1JBX0 #Insurance #InsuranceSector #SaudiArabia #KSA #Regulations #FinancialServices #BusinessIntelligence #Growth

Privatization of State-Owned Insurance Companies in Pakistan: A Global Perspective vs National Game Plan The global insurance industry is predominantly driven by private sector companies, with government-owned insurance companies making up a smaller portion of the market. For instance, in the U.S., top players in property and casualty, life, and annuity insurance are all privately held or publicly traded companies like State Farm, Progressive, and Berkshire Hathaway in the property/casualty segment, and MetLife and Equitable Holdings in the life/annuity sector. However, there are notable exceptions where state-owned insurance companies play a significant role. In some countries, particularly developing economies, government-owned insurers are crucial for providing coverage and maintaining market stability. For example, China Life and Life Insurance Corporation of India (LIC) hold substantial market shares and play pivotal roles in their respective insurance markets. The balance between private and government-owned insurance companies varies significantly by region, influenced by historical, economic, and regulatory factors. While private insurers lead in market share and innovation in most regions, state-owned entities often ensure coverage for high-risk sectors and populations that may be underserved by the private market. Given this context, appreciate thoughts from the industry experts on the recent move to privatize state-owned insurance companies like State Life Insurance Corporation (SLIC) and National Insurance Company Limited (NICL) and Pakistan Reinsurance Company Limited (PRCL) in Pakistan….! Can privatization drive efficiency and innovation, and lesson the burden of public exchequer or is there a risk of neglecting high-risk sectors and vulnerable populations? Looking forward to the insights and perspectives! #Insurance #Privatization #Pakistan #Economy #Business #FinancialStability #MarketDynamics