Gcc Insurance Sector Facing Challenging Times
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BRIDGING YOU TO ARAB WORLD Malaysia and the Arab World Arabic English Monthly Magazine (15th of Every Month), Issue 87, March 2016 GCC INSURANCE SECTOR FACING CHALLENGING TIMES UAE HOTELS RECORD HIGHEST OCCUPANCY RATE IN MIDEAST 9 772462 249006 ISSN ISSUE 87 RM 6 2462-2494 PP 16000/07/2013(032927) 87 ASWAQ INFO HALAL INDUSTRY CHALLENGES The Halal Industry is considered one of the fast growing industries in the world in regions with prevalence of Muslim communities. Arab countries have DIGITAL ISSUE begun to encourage investment in Halal industries for quite a while. The Halal industries is defined as any product or service produced according to Islamic Law (Sharia Law), and it takes into account all standards and procedures agreed upon, furthermore, it is characterized by quality and adherence to global health standards and codes. The importance of this industry lies within the contributions to the global economy, such as Islamic CHAIRMAN EDITORIAL QATAR OFFICE: Finance providing alternative finance solutions to credit companies that Dato Noor Mohamad Mohamed Al Soofi Tel: +974 6668 2824 lacks the ability to engage in traditional banking system. Maher Ibrahim Mob.: +974 33115135 With the continuous expansion of multi-Islamic economic categories, EXECUTIVE EDITOR-IN-CHIEF Yusuf Waswas Director & DG Eiad Mahmoud Yousuf Mohamad Al Boutary where there are a lot of the challenges workers face in this sector, Dr. Abdulrahim Abdulwahid Abdul Karem Al Jamal consequentially highlighting the important sectors of the Islamic economy, Heba Mostafa Hashem OMAN OFFICE: CONSULTANT BOARD Zanib Abdulrahim Mob.:+968 92925677 which has become a focal point of interest for investors and businessmen Datuk Seri Azman Ujang Director around the world, non-Muslims and Muslims alike, whom are expected to Dato Tuan Ibrahim ART DIRECTOR Mohamad Saad Manal Basalamah reach 2.2 billion Muslims in 2030. EXECUTIVE MANAGER PRINTING In this context, Malaysia will host this month the 13th edition of "MIHAS" MARKETING Superior Press Sdn Bhd Alaa Abdulwahid exhibition, which is the biggest specialized exhibition in the Halal industry Mohammed AbdulRaheem PP13331/08/2013(032685) PR AND PUBLISHING Amal Mahfoudh Lot2063A, Jalan Kusta, Dr. Abdulrahim Abdulwahid world-wide, which will feature more than 500 international companies www.aswaqpress.com MANAGER Sungai Buloh Executive Editor-in-Chief & DG from 30 countries to analyze the status quo of the Halal industry globally, DISTRIBUTION Kawasan Industri Taman Giath Fowze [email protected] considering the forecasts of higher global spending on products, food, [email protected] Waleed Salama Jaya, 47000 Selangor Darul FINANCIAL MANAGER and lifestyle by 10.8% annually until 2019 turning this sector into an DISTRIBUTION CENTERS Ehsan aswaqpress Sara Yasmin international industry worth USD 3.7 trillion.At this point we completely Malaysia, UAE, Saudi PUBLIC RELATIONS Arabia, agree with the general direction of the United Arab Emirates as a pioneer Qatar, Kuwait and Oman Basem Ayad leader in the Halal industry due to the need to control and audit the E-MEDIA Islamic international standards system in an attempt to reach leadership EDITING MANAGER Mohamed Al Soofi and excellence in standards and regulations pertaining to all aspects of Anas Salman consumer’s health and safety within the Sharia Law’s boundaries which contributes to reinforce trust and credibility to Muslim consumers in the Halal industry, ensuring homogeneity in the application of standards amongst all countries in accordance with standardized mechanisms to ensure the efficiency of these bodies’ halal certification. Strict procedures under the supervision of OIC (Organization of Islamic MALAYSIA UNITED ARAB EMIRATES No.343 (3-rd Floor) , Jalan 2570/A, Desa Sri Dubai, Deira, Abu Hail, New Safia Building, Cooperation) between Muslim pioneers in the Halal industry is perceived Hartamas, 50480 Kuala Lumpur. M. Floor, Office 53A ،Tel: +603 6201 8841 / 8842 Tel: +971 4 2972740, 2971577 [email protected] Mob.: +971 50 646 97 51 to be of utmost importance as to benchmark standards and procedures, www.aswaqpress.com E-mail: [email protected] Facebook.com/aswaqpress www.mediahubintl.com as well as the initiation of a promotional campaign led by Islamic countries throughout OIC to reenact the support of the economy and bolster trust in Halal products and services, despite that, the problem is the mistrust in Islamic countries, either individually or collectively due to the miserable DISTRIBUTION LOCATIONS reality of the Muslim and Arabic common people’s lives in all aspects of EMIRATES AIRLINES BUSINESS LOUNGE PAVILION MALL KUALA LUMPUR SUNWAY LAGOON PARK ROYAL HOTEL KL MALAYSIAN AIRLINES (IN-FLIGHT) POPULAR BOOKSTORE life, however we still have high hopes and ambition to utilize and exploit TIMES BOOKSTORE TIMES THE BOOKSHOP BERJAYA BOOKS WH SMITH (KLIA, LANGKAWI AIRPORT, PENANG AIRPORT) COLD STORAGE the Halal industry to the maximum in order to attain a prosperous future MY HERO MERCATO AEON BIG for the next generation. ASWAQ Magazine | March 2016 5 ASWAQ INFO ASWAQ INFO DUBAI’S DEVELOPERS TO GO AHEAD WITH HIGH-PROFILE 10 LAUNCHES INDEX GCC MINISTERS PLAN TO BUILD SMART CITIES 14 GCC INSURANCE SECTOR FACING CHALLENGING TIMES 8 16 18 DUBAI LAUNCHES INTEGRATED HEALTH RECORD SYSTEM 12 UAE HOTELS RECORD HIGHEST OCCUPANCY RATE IN MIDEAST 20 ISLAMIC BANKS PROVE RESILIENT IN FACE OF ECONOMIC DOWNTURN OMAN'S PORT OF DUQM BEGINS TO EXPORT MINERALS 6 ASWAQ Magazine | March 2016 ASWAQ Magazine | March 2016 7 REPORT REPORT Some of the markets in the region are already going The most challenging area is in the commercial lines through a significant competitive challenge where (excluding reinsurance), where total gross written local insurance markets are flooded with too many premiums increased just 6.9 percent in 2014 as small insurers competing against one another for a compared to 20 percent, up 19.3 for the personal relatively limited, undiversified market. The biggest lines of business. The growth of premiums in personal challenge for the insurance industry in the region is lines is largely due to the new legislation making motor GCC INSURANCE SECTOR the intensified competition due to the small market and health insurance compulsory in most markets. as well as the large number of firms. The report also revealed that the direction of oil price FACING CHALLENGING TIMES plays an important role across the region, particularly in the GCC where the currency peg limits the direct Dubai – “ASWAQ” impact of US interest rate policy. There were rising The GCC insurance industry is currently facing pricing pressures and regulatory speculations suggesting that Saudi Arabia could hurdles in 2016, with little opportunity for insurers to diversify themselves, an industry outlook report released by Middle East Global Advisors revealed. The report added that despite these significant challenges facing the industry, overall premiums continued growing by double digits at around 12.6 percent from 2013 to 2014, which is considered impressive in the face of macro challenges. Among the GCC industry players, Qatar-based Insurance companies recorded the highest asset base. The Qatari insurance industry is gaining momentum mainly due to the government's extensive expenditures in non-oil sectors such as Qatari Rail and the FIFA World Cup 2022. The Saudi insurance sector recorded the highest premium growth due to regulatory reforms and the remove the Riyal's peg to the dollar which would mandatory motor and health insurance, while the significantly impact the future of monetary policy in investment ratio in Qatar and UAE puts insurers based the region. in these countries high in the leader board rankings. Overall, the total size of the insurance industry has not The lowest operating ratios in the region were in the grown in line with the number of players competing UAE, where companies with the lowest ratios are mainly for the existing market, which has resulted in severe non-life insurance providers. Most of these companies price wars and difficulty in sustaining profits. This is the have government stake and have benefited from greatest challenge for insurance companies in the the current trend of the public-private-partnerships Middle East to survive and sustain in an environment that are bringing in more underwriting income for of high competition. these companies. The low combined ratios reveal Insurance companies in the Middle East foresee that more net income are being generated from that slowing economies due to the impact of lower their underwriting activities rather than investment oil prices could slow down the insurance industry's activities. growth in the near-term. 8 ASWAQ Magazine | March 2016 ASWAQ Magazine | March 2016 9 REPORT REPORT GCC MINISTERS PLAN TO BUILD UAE PORTS AMONG THE SMART CITIES WORLD'S MOST ADVANCED Dubai – “ASWAQ” Dubai - “ASWAQ” Ministers of the Gulf Cooperation Council (GCC) countries are planning to adopt UAE Ports rank among the world's largest in terms of advanced equipment, capabilities, the 'Smart Cities' plan as part of the new housing projects to be implemented in shipping and unloading, said Dr Abdullah bin Mohammed Belhaif Al Nuaimi, UAE Minister the GCC countries, according to a Gulf official. of Infrastructure Development and Chairman of the Federal Transport Authority - Land and Maritime. The ‘Smart Cities’ plan is aimed at rationalization that will help foster the best and most optimal use of the new housing projects to be built in the GCC of resources and the management of facilities to countries and also the energy usage within the eliminate many shortcomings and flaws," he said. new housing areas, according to Kuwait's State Among the topics discussed in the forum were Minister for Housing Affairs Yasser Hassan Abul. smart and modern projects in health, information, Abul said the housing ministers in the GCC communication technology, smart buildings and countries will coordinate with other ministries such smart energy, as well as education and youth as the Planning Ministry, for greater unification in development.