Lauren Gow talks to internal and external experts about the region’s fragmented market, the challenges this poses and how they will be overcome


Justin Balcombe

Justin Balcombe, Head of insurance for MENA, Ernst & Young


Starting with the rest of the landscape [outside the Gulf Cooperation Council (GCC)], there aren’t any regulations to write home about.

But when you look at the level of insurance penetration in the rest of the Middle East, we are probably only looking at markets like Morocco and Algeria, where at least there is good penetration and they have an understanding that is equivalent to the FSA.

But the insurance market for GCC is very different.


As far as harmonisation goes, the challenge that the regions have got - which they are addressing - is that if I buy a motor policy in Dubai and I want to drive to Saudi, I need to drive through three countries and, by law, I need to have a policy in each country, which is crazy.

You don’t need to do that in the EU, so there already exists a mechanism for this, but it should be discussed more at a communal federal level across the GCC countries.

It’s not that they are not doing anything, because they are, but as ever the speed at which they are implementing this is certainly not fast enough, given the exceptionally fast growth of insurance in the region and the fact that the appetite for insurance is only increasing.


Doing business there isn’t for the faint-hearted, but the Middle East is in a far better position than some of the other global economies.

People judge it by the news coverage, but it isn’t like that at all.

The countries are reasonably financially stable, though no one is immune from the global events.

They have the benefit of lack of heavy regulations, lack of huge financial exposure and having natural resources in the region.

Each region has its fair share of issues, but it has always been able to transit through that.

The next 10 years are very exciting times for them, including integration across the region. That is going to offer huge potential.



David Guest

David Guest, war terrorism and political violence underwriter, Hiscox


Compared to some of the regulation that we have in more developed parts of the world, where it is never-ending, life is quite simple.

Simple is good sometimes. I wouldn’t say at the moment there are any regulatory drawbacks as a Lloyd’s operator.

There are different challenges in different areas, but regulation is not one of them.


There is an operating environment challenge and a policy challenge.

The business that we do in the Middle East has gone from somewhere around 6% of our portfolio to aro

und 15%, and that is driven predominantly by a lot of new clients coming in, some price increases and, for some existing clients, we are selling a broader product.

What we have seen in the past year is that 90% of our policies sold in Egypt were terrorism only; now 90% are political violence ones.

We have seen clients look at what has happened.

A lot would have read their wording for the first time, talking with their brokers and buying a broader coverage that can encompass all of the challenges that we have seen in Egypt, Libya and Tunisia.


What we saw in Egypt last year was a resurgence of 18th or 19th century terms such as insurrection, rebellion and revolution.

While these might sound anachronistic, they all have very precise legal definitions that exist as exclusions on most policies and within political violence coverages.

The scale of what was happening in Egypt and the intent behind it means real challenges for our clients.

Those two words ‘insurrection’ and ‘rebellion’ are excluded under all property and terrorism policies.

Clients have to be aware that we are in this brave new world now, where populations around the globe are fighting to have their lives under their own control.

But for clients in those places, the perils that can operate now have mostly been excluded from all the policies they have bought in the past.