60 February 2012 BTM the US, Europe and Japan, observes Bahrain National Holding (BNH) chief executive, Mahmoud Al Soufi. Despite taking over the mantle of the regional financial hub from Lebanon in the 1980s, the insurance sector in Bahrain did not find mention in the Kingdom’s economy until the last decade. In contrast, the insurance sector in countries such as the UK has been contributing more to the economy than the banking sector. Until seven years ago, the insurance industry in Bahrain fell under the purview of the Ministry of Finance and Commerce and it was only after the Bahrain Monetary Agency assumed the responsibility for regulating and supervising the sector that a comprehensive regulatory framework for insurance activities was developed. As CEO of Bahrain National Holding (BNH), the parent company of Bahrain National Insurance (bni) and Bahrain National Life Assurance (bnl) and board member of six insurance and insurance-related companies in the region, Mahmoud is acutely aware of the immense potential the sector holds, particularly in the individual, life, health care as well as the industrial lines. “The industry has not been given the respect and attention it deserves,” he opines. “It is overshadowed by banking and most of the complementary business is outsourced; it is yet to mature when it comes to public awareness, product innovation, regulation and personnel development. Going forward, these factors would be the key enablers for growth.” Having posted good results in 2011 despite a challenging market environment, Mahmoud is optimistic about BNH’s performance for 2012. He firmly believes that the growth of the insurance sector as a major component of the financial services industry is attainable if the right conditions are cultivated by regulators, policymakers and the sector itself. “The potential for growth in the region remains intact, but we cannot wait for things to happen. We must embrace change and adopt a more international outlook and above all, think long-term value rather than short-term profitability,” he maintains. Developing human capital The insurance sector in the Kingdom is marked by an acute shortage of skills, particularly in the areas such as underwriting, surveying and actuarial skills. “Bahrainis comprise around 70 per cent of the workforce in the insurance sector, but the main revenue earning functions are outsourced to expatriate professionals. This presents a huge opportunity for locals in the region as cultivating the Insurance may have become one of life’s necessities today, but it remains one of the least understood among financial products. In Bahrain, as in much of the Arab world, insurance penetration has traditionally remained low given the philosophical outlook on risk and uncertainty coupled with outdated regulation. In fact, the insurance spend per capita in the Kingdom is barely two per cent compared to developed markets such as businessinterview xxxxx Small was considered beautiful twenty years ago; it’s time the Kingdom’s small and medium enterprises (SMEs) started thinking big Bahrain’s expanding insurance sector presents boundless opportunity not only for professionals within the GCC, but across the Arab region as a whole. Mahmoud Al Soufi Poised for Growth
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