Downturn in region's property sector, debt revamps in Saudi family firms have hurt kingdom's insurance industry
Bahrain's insurance companies need to merge to create stronger and more competitive entities, the country's central bank governor was quoted as saying on Tuesday.
A severe downturn in the region's real estate sector and debt restructurings in Saudi family firms have hurt Bahrain's banking and insurance sector following the global financial downturn.
Central Bank of Bahrain's (CBB) governor Rasheed Al Maraj urged insurance companies operating in the non-OPEC oil producer to strengthen their positions through mergers to boost competitiveness among firms.
"We need to look at the question of integration and formation of large entities able to provide new services and products for customers to compete at the same time with big companies," Al Maraj told the Bahraini Alwasat newspaper.
The size of the insurance industry in the island kingdom reached more than BHD200m ($530.6m) at the end of 2010, the paper reported.
He also said the central bank would however not intervene in the services provided by insurers.
"Our key task is to provide the legislative environment for all activities, and to guarantee the controls governing the work of these companies," he said.
The penetration rate of insurance companies in the Arab world was at least 25 percent, and the volume of insurance premiums in the region about $20bn by the end of the year 2010, according to the General Arab Insurance Federation.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.