Qatar is well placed to lead the charge of strong growth in the Middle East, writes Shashank Srivastava acting CEO of Qatar Financial Centre Authority.
The next decade looks set to be one of steady growth for the Gulf Co-operation Council (GCC)’s reinsurance market. Having weathered the economic storm, expansion looks set to become common in the region, with $1 trillion of infrastructure investment either currently under way or in government pipelines.
With its reinsurance market having an estimated value of around $3bn in 2008, this strong growth will build on the region’s solid foundations. Qatar is well-placed to lead this charge, especially following the Qatar Financial Centre Authority’s recent strategy shift, focusing on reinsurance, captive insurance and asset management.
Competition will be fierce as reinsurers look to take advantage of the lucrative market. Given this, it is surprising that the GCC does not have a single reinsurer in the global top 40 in terms of gross written premium. The majority of regional business has traditionally been won by global players such as Lloyd’s, Swiss Re and Munich Re, with local firms accounting for less than 10%.
Regional players must evolve their approach in order to win new business and operate on a global scale. Some key strategies include:
• identifying business lines of expertise in order to build sophistication and expand capabilities;
• aligning business activities with talent hiring;
• moving on from an investment income mindset; and
• building risk management sophistication that captures regionally specific models and data to provide a deeper understanding for more effective pricing.
Shashank Srivastava is acting chief executive and chief strategic development officer of the Qatar Financial Centre Authority