2. What is your outlook on the Bahrain insurance market, and the new compulsory medical insurance law proposed ?

I have had no sight of any compulsory medical insurance law proposed in Bahrain as I was not privy to this information. I am not aware whether any official white paper for discussion and consideration has been issued to the market. It is however common knowledge that the authorities are thinking of this but as to what stage they have arrived I do not know and therefore cannot comment. As a matter of principle any insurance that is required as compulsory, more often than not, creates losses to the insurers as legislation creates demand and therefore insurers go for the market share without proper pricing. The fact that it is compulsory will sometimes imply a tariff which due to political and social reasons will be inadequate certainly in the medium to longer term. So although this will increase the size of the insurance market I doubt whether it will increase the technical profits. I am sure that the authorities will take all these into considerations in the drafting of any such legislation.
With regards to the Bahrain Insurance Market one can immediately say that it is highly competitive with new insurers mushrooming every year. Unfortunately the new competitors are not bring anything new to the market by way of products or services. Presently it is just a price war to get enough premium income to service their capital. What they might be missing is that the capital is not serviced by premiums written but with technical profits which is a direct function of price. A huge potential exists for the Takaful companies but this potential is not being exploited as these companies are adopting the path of least resistance. Instead of creating products based on Islamic concepts and therefore increasing the insurance market they are opting for the easy way out by competing for a piece of the present insurance market. As it is well known that the success of insurance depends on the law of large numbers, this makes Bahrain a very sensitive and vulnerable market. It is the duty of all the players in the market to safeguard the credibility of the insurance market and therefore to maintain prices which are viable and sustainable in the longer term.

3. What have been the key highlights for your company during 2009 ?

2009 has been a very eventful year for BNI. It has been a year of consolidation, maintaining selective underwriting approach, sensible level of pricing and focus on the small to medium size business. This has given the company a good spread without any large dependencies and kept only those accounts that offered a potential good return. Obviously we operate in the risk market and therefore one has to have adequate protection to ensure that our clients are always paid to the full for losses for which they are covered. We have achieved this year increased capacity in many areas. We have introduced new packaged policies which are selling as per expectations.
BNI has also delved into the area of professional negligence, directors and officers and insurances for financial institutions. All these were launched during 2009 with the support of well known international reinsurers and increased local retention. BNI has also made tremendous progress in taking the products and services to the client by introducing on-line internet renewals on motor and personal lines business and installed various intelligence zones with automated machines for renewals of motor policies in their various branches. This has given personal insurance in Bahrain a different dimension which makes us proud of being the first.

4. There has been much debate about the need for the mandatory training of entry level insurance staff in Bahrain. What do you see as the roles of the CBB and BIA moving this forward ?

It is the duty of the CBB as a regulator to ensure that the insurance sector is run professionally. This implies that insurance companies have to employ qualified, competent, mature and professional personnel. The regulator has to set the minimum standards for persons performing a control function within their fit and proper criteria. It is in the interest of the individual companies themselves to employ qualified and professional personnel and it is their duty to provide opportunities and assistance for training.

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