Insurance

The Bahraini insurance industry is ranked the most advanced in the region and as of June 2003 the kingdom counted no less than 154 insurance firms and brokers.

Insurance sector has marked growth prospects

Bahrain already has 14 percent of the region’s revenue pool for non-life business and with the low penetration rates and relatively underdeveloped nature of the regional insurance market, the kingdom is in an ideal position to be the regional hub for the insurance sector’s expansion.

Despite the slow development of this sector regionally, the BMA has built a regulatory framework to suit a variety of business models and facilitate theallocation of resources for the development and distribution of products, joint-ventures and outsourcing for regional and international companies. This also covers the reinsurance and captive insurance sectors. In August 2002, the BMA took over the growth and development of the insurance sector from the Ministry of Commerce, to become the first integrated regulator in the Middle East.

The development of Islamic insurance has been a key focus for the BMA as it positions Bahrain as a center for Islamic financial services. The basic tenets of takaful and re-takaful products are essentially the same as conventional insurance; however, Islamic insurance differs in the way funds are invested. Investment must be ethically acceptable and based on Shari’a law which does not tolerate usury or interest, known as riba, and must be devoid of any pretensions of gambling or exploitation. As the popularity of Shari’a compliant products rises, Bahrain will increasingly be a focal point for their development.