It is no secret that the last few years have been very competitive in the GCC insurance market. Whether it is because of the global economic downturn, the Dubai property crash, the Arab Spring, or too many insurance companies and brokers in the market, many in the region’s insurance fraternity will admit anarchy is upon us and the market is set to pay dearly.

The market today is a no holds barred contest where rate slashing, brokerage slashing, and sometimes unethical business practices or even miss-selling are common.

With not enough to go around, it will be interesting to see how the market copes over the mid-term. Essentially cannibalism, reinsurers have yet to reign in local insurers and the treaties which they write despite threats of accumulation.

What is most amusing, is more and more capital continues to flow into the regional reinsurance market further increasing competition and the number of pointless conferences where new companies can throw
away their first year marketing budgets.

Property rates in markets such as the UAE and Bahrain have dropped as low as 0.1 per mile on some accounts, and many ceding companies unable to find adequately rated reinsurance security are reverting to third world securities as far as Africa and Russia. Motor is plummeting, engineering dropping, and not enough Marine cargo to go around.

Brokers around the region are slashing their brokerage to compete hence eroding the quality of risk management and insurance advice being given to clientele, and ultimately their financial viability.

The medical insurance market is in chaos despite compulsory regulations. Regulations are out of control, Hospitals are out of control, and TPAs are out of control. Where do you think that leaves the insurers, brokers, and the insured?

On top of all of the above, regulators are becoming more stringent, and continue to pass new regulations across the board raising the cost of compliance for both brokers and insurers alike. Who can blame them?
We operate in a market where insurers and brokers can agree on everything and nothing, and the law of the jungle prevails.

With all of the above, the first question you should ask yourself as an insurance professional is couldn’t we all just get along? Like green movements to save the environment around the world, isn’t it time we all stopped for a minute and starting working more closely together to police the way we choose as insurance players to operate in the market. It’s time to save the insurance world from implosion, and if we are not careful as an industry, capital will exit the insurance market as quickly as it entered!

Isn’t it time to standardize more wordings, impose minimum security requirements, minimum rating for motor, and shift to an agent and broker distribution only model?

Imagine a Pan GCC market where we have uniform regulations allowing both insurers and brokers to passport across the region.

Imagine a broker distribution only model similar to Europe and the US, and where both product offerings and commission levels are standardized.

Imagine a market where insurers actually meet to set rates on generic product lines such as Motor insurance, and reach a market understanding on other classes.

Enough said! As Thomas Edison once proclaimed, ‘’Vision without execution is Hallucination.’’

Every time we meet at the next conference our dear friends, remember we are all hallucinating!