(MENAFN Press) Bahrain maintained steady economic growth during the review period, a situation which is expected to continue over the forecast period.
The country's GDP at current prices grew at a CAGR of 8.79% during the review period, although it declined by -12.9% in 2009 over 2008 due to the global financial crisis.
The Bahraini economy recovered quickly despite the minor blip experienced in 2009 and posted annual growth rates of 11.4% and 20.4% in 2010 and 2011.
The economy is projected to maintain positive growth rates across the forecast period and is expected to attract higher foreign capital inflows that will subsequently have a bigger impact on the country's financial services industries.
As a result, the takaful insurance business is expected to rise significantly over the forecast period.
Rapid growth in population to be an important driver for takaful insurance demand
According to the World Bank, the population in Bahrain grew from 760,000 in 2007 to 1.1 million in 2011, registering a CAGR of 10.3%.
Meanwhile, the population in the GCC region recorded a CAGR of 15.1% during the review period to reach over 44.9 million in 2011.
The population growth rates in the region, including Bahrain, are significantly higher than the global average recorded during the period.
The rapidly growing population in Bahrain will be an important driver for the development of the insurance industry, accelerating the demand for life insurance policies.
Regulator making concerted efforts to push takaful industry
The CBB collaborated with takaful insurance companies in Bahrain in order to enhance retentions in the industry.
The CBB has been actively involved in providing advanced modules of training and in developing the talent pool of human resources available in the industry.
Highly qualified personnel will help to achieve the rising demands for sophisticated and customized products in this industry.
The CBB is currently updating and expanding the regulatory framework in the takaful industry in order to accelerate growth.
Regulatory changes will involve enhancement in the rules related to different solvency margin conditions in terms of its calculation and treatment.
Government's planned infrastructure spending to increase non-life takaful segment growth
The Bahraini government invested BHD112 million (US289 million) in various infrastructure projects in 2011.
Additionally, the government has announced plans to invest over BHD110 million (US292 million) in 2012 on various infrastructure projects, encompassing the roads, construction and sanitation sectors.
This large infrastructure spending is expected to be a major driver for the development of the takaful non-life insurance segment, especially the property insurance category, over the forecast period.
Non-life insurance segment leads the way for takaful industry
Takaful non-life insurance remained the largest insurance segment in the Bahraini takaful insurance industry during the review period.
In terms of gross written premiums, the non-life insurance segment accounted for 60.6% of the overall insurance industry in 2011, followed by the personal accident and health insurance and life insurance segments, with respective shares of 29.6% and 9.8%.
However, the share of non-life insurance declined from 71.1% in 2007 to 60.6% in 2011; while, the share of personal accident and health segment saw a rise from 21.0% in 2007 to 29.6% in 2011.
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