Despite the soft market, reinsurers committed to the region are trying earnestly to educate the market on the need to boost underwriting standards and to achieve a technical profit with the right price. Some 15 professional entities give their views on the challenges faced and the competitive edge they bring to the marketplace to help the industry grow.

The Middle East is booming and there is greater international interest in the region. The dynamics of change is hitting the sands faster than expected and the regional reinsurers in the market are fast waking up to this reality. Some are dramatically taking the challenge to try to lead the market; some are doing more to keep abreast of the changes; some are consciously stepping up their skills and capital resources, yet others are just hanging in there expecting all this attention to just go away. The actual premiums in the region might be low by all global counts at US$21.4 billion based on data extrapolated with the sigma figures for 2006. Yet the Middle East is one of the fastest-growing insurance market in the world with a 15.6% growth in 2006 compared to a world average of 8.0%. And as many keen observers of the Middle East know, this not a true picture of the size of the regional premiums as quite a large portion of the oil and gas, marine and aviation business flow directly into the London and global markets. Hence, there is more to the region than meets the eye.

As for reinsurance in the Middle East, the rates are still low. And in many markets, even in times of higher claims and losses, companies are able to report technical profits because of the reinsurance commissions. Hence, reinsurers are seen as the friendly support force to the domestic market, and there is strong dependence on reinsurers be they local, regional or international. As one market participant said: “We have the cheapest reinsurance rates in the world in the UAE.” Another said: “We are spoilt for choice even with our losses as there are more reinsurers knocking at out doors.” But as reinsurers say: “This is because times are good elsewhere, and the insurers are enjoying the benevolence of global reinsurers who are looking for geographic spread and diversification.”

As popular wisdom has shown, there are no guarantees in this kind of accommodation business which will dry up the moment the going gets tough. Hence, reinsurers committed to the region are trying earnestly to educate the market on the need to boost underwriting standards and to achieve a technical profit with the right price. The markets are changing and they are changing fast. The expectations of the reinsurers who have seen the various cycles are also changing given the globalised reinsurance environment.

Here, we bring you the views of some 15 professionals in the market who responded to our survey of the challenges faced and the competitive edge they bring to the marketplace to help the industry grow. We have divided the story into four segments:

• Local regional reinsurers: Arig, Best Re, Arab Re, Kuwait Re, Tunis Re, and National Re of Sudan;
• International reinsurers: Munich Re, Hannover Re and Flagstone Re;
• Asian reinsurers: Labuan Re and Malaysian Re; and
• Four brokers in the market: Chedid Re, Cogent, Heath Lambert and Lockton.