-1341120-32829500University of Bahrain
College of business administration
Prepared by: (section-02)
Soukaina jaoudi 20132139
Noora sami al-zamil 20132141
Zainab ahmed al-aradi 20146029
Asma moh’d salman 20130521
Sara jaffar sedaif 20155412
The insurance industry in Bahrain…………………………………3
4The profile of the company Arabia insurance Co………………….
Competitive environment …………………………………………..5
The various insurance policies and strategies of the company…….6
7Methods of handling risks by Arabia insurance company…………
Tables summarizing data gathered / sources……………………..10
The insurance industry in Bahrain:
First of all, Insurance is a contact between the insurance company and the parties that would like to protect them self from the losses and risk that might be happened in the future.
Insurance sector in Bahrain offers all kinds of insurance that an individual and entity needs such as (Health, life, property, accident and fire insurance, etc.)
Therefore there is various insurance companies in Bahrain by which people be able to protect them self from any risk or loss by applying for insurance either by an individual or entity.
The insured has many companies in Bahrain that can provide various insurance services such as (Bahrain;Kuawit, Al-Aliyah, Gulf Union, Bahrain National, Fakhroo insurance company, etc.).
And each insurance company have their own polices and special types of insurance that meet the need of everyone how want to be insured through applying for insurance.
Depending on a research, Insurance officials in Bahrain believe that at the recent years, the insurance sector has grown and developing because of the new insurance companies entering the market and the greater demand on insurance that increase the competitive to motivate the companies to provide professional service to the customers, to reduce the losses and risk.
Moreover, Bahrain is considered as first country that introduce normal insurance, as well as the mandatory insurance by convince the people about the benefits of the insurance. Also, has become a place to attract foreign insurance companies because of the laws that are designed to attract them.
In this research we found that Bahrain consist of number of licensed companies in the insurance market in Bahrain, reached 25 national companies and 11 branches of foreign insurance companies engaged in insurance business. Each insurance company served by the insurance manger, representative office for the insurance, insurance consultants and insurance appointed representative.
It is expected that the insurance sector in Bahrain will achieve a higher growth rate in the coming years by increasing the insurance awareness of the importance of insurance products in general, in addition to increasing economic growth rates in the Kingdom and the legislative and regulatory environment of the insurance sector in Bahrain.
The profile of the company selected:
Arabia Insurance draws its strength from 73 years of experience in the Arab and Middle Eastern Insurance community.
Arabia Insurance was established in 1944 to be incorporated later on in Beirut with a fully paid up capital of L.B.P. 51,000,000,000 (Lebanese pounds Fifty One Billion).Arabia Insurance has drawn its objectives over delivering the adequate coverage, proper and prompt claims handling, product development and the latest technical updating.
The core of its success lies in understanding individual needs and maintaining a close relationship with customers.
ARABIA BOARD OF DIRECTORS
Mr. Wahbe Abdallah Tamari (Chairman), Mr. Hani Atallah Freij (Vice – Chairman), Arab Bank PLC (Represented by Mr. Riyad Kamal), Mr. Nadim Baroody, Dr. Karma Fahoum El-Hassan, Mr. Nadim Ghantous, Mr. Maroun Kyrillos.ARABIA MANAGEMENT
Mr. Wahbé A. Tamari (Chairman of The Board), Mr. Hani Freij (Vice-Chairman), Mr. Samer Abou Jaoude (General Manager), Mr. Hisham Barraj (Deputy General Manager), Mr. Marwan Mokdad (Human Resources Director ), Mr. Wael El Bsat (Operations Directors), Mr. Bassam Semaan (Life Insurance Director) ,Mr. Antoine Abou Faysal (Non Life Insurance Director), Mr. Mohammad El Hassan (Regional Director – Lebanon.
To be the leading “customer centric” Arab Insurer.MISSION
To provide accessible, simple, effective and client friendly products and services that respond to the evolving needs of our customers.
Al-Arabiya Insurance Company provide many insurances to the customer but our focuses in the report will be in the health insurance that provided by (Al-Arabiya Insurance Company).
Al-Arabiya Insurance Company, provide their health insurance by carefully selected a large number of medical facilities that include (hospitals, clinic, and diagnostic centers) and health care that reach the high level of professionals for their all customer.
The insurance industry in Bahrain has grown and developing steadily and strongly in the recent years, with growth matching expansion of the financial sector as a whole. In 2013, for example, total gross premiums increased by 8% over 2012. Such growth also was due to other various reasons, such as the new insurance companies entering the market, as well as the greater demand on the insurance. Therefore, as a result the competition increases concluding that the insurance market or the insurance environment is a competitive environment which actually motivates the companies to serve professional insurance products to its customers. Moreover, a research has found that the insurance market in Bahrain including both conventional insurance and takaful, comprises of 25 national companies (locally incorporated firms), and 11 branches of foreign insurance companies engaged in insurance business.
In addition, the insurance sector in Bahrain is expected to achieve a higher growth rate in the coming years, through the awareness of the importance of insurance products in general and the economic growth rates in the kingdom, legislative and regulatory environment of the insurance sector. Also the insurance sector is continued to grow in 2014 supported by a growth in the domestic economy.
Additionally, the market is somewhat crowded with small and medium-size players. This has resulted in a highly competitive environment, as leading firms look to expand over the coming decade. The sector is expected to see a round of mergers and acquisitions. While consolidation could be a hurdle for smaller firms, it is likely to benefit the industry in the long run.
market share?arket share , pointeao parties.bys of insurance companies in Bahrain
The various insurance policies and strategies of the company:
Arabiya insurance policies and strategies:
Arabiya insurance provides guaranteed sum assured, and the cash value of the policy or both whenever it become needed.
One of the insurance that Arabiya Company provides is health insurance. They provide to their customers the indirect cost of illness such as (cancer, stroke, and heart attack). Arabiya insurance provides its customers the money when they need it or when they are suffering from mentioned illness. This let the insured to forget about finance and letting them to focus more about getting well.
Arabiya insurance company pays the illness or medical costs according to diagnosis of unknowing or predetermined critical illness, and subject to the assured staying alive at the end of 30 days period commencing from the diagnosis date.
And this is available as:
A rider to term policy.
A rider to an Arabiya lifestyle policies.
A standalone Arabiya life style policies.
The payment will be in case of unfortunate death, under 2;3 above, the cash at the date of occurrence.
The Group recognizes and understands that risk is inherent in seeking business opportunities, in developing and implementing new and original business strategies, and in dealing with local and global enterprises and communities.
Speaking about The underwriting strategy which attempts to ensure that the underwritten risks are well diversified in terms of type and amount of risk, industry and geography.
Methods of handling risks by Arabia insurance company:
“ARABIA has been developing its risk management framework over recent years, in line with international best practice. A corporate governance framework is well established and is relatively well advanced when compared to many of the company’s regional peers.” (excerpt from A.M. Best Report)
Here is some risks and how ARABIA is managing/handling these risks-
Underwriting Risk The underwriting strategy attempts to ensure that the underwritten risks are well diversified in terms of type and amount of risk, industry and geography.
The Group mitigates this risk through underwriting guidelines and authority limits for issuing insurance contracts, as well as through Diversification across lines of business and proper reinsurance arrangements.
Claims Settlement Risk Clear documented claims settlement guidelines and limits by class of business are communicated to the claims functions. Periodical reviews are carried out by the Head Office to ensure proper adherence to these guidelines and adequate internal control system.
Reserving Risk the reserves are calculated based on substantiated assumptions, methods and assessments. Periodical Reviews by internal and external parties are being made to ensure that the reported reserves are reasonable and sufficient.
Reinsurance Credit Risk the Group minimizes its financial exposure arising from large claims by entering into reinsurance agreements that are suitable and adequate for the corresponding business.
Concentration Risk This is the risk that the total coverage sum insured is aggregated at the level of a single policy, contract, or client and a large loss would be generated in the case that this single contract is hit by a covered event. The Group mitigates this risk and protects its equity through the transfer of catastrophe risks and proper reinsurance arrangements.
Collection Credit Risk The financial loss that the Group could incur as a result of a change in the financial position of counterparty is being managed through the Group’s credit policy and monitored through periodical analytical reports that highlight any breaches for the credit limits specified in the policy.
Operational / Business Continuity Risk the Group enhanced its understanding of natural hazards, man-made hazards, political risk exposures and other emergency events (system breakdown) that could severely affect the continuity of the operations if they occur.
In this project we have discussed first in general the insurance industry in Bahrain, stating that insurance is a contract between two parties, the development and the steady growth of insurance in Bahrain.
Furthermore, we have considered a particular insurance company which is Arabia Insurance. We proceeded further with mentioning the company’s board of directors, management and also their vision of being the leading customer centric Arab insurer and their mission. And Covering the competitive environment; illustrating the development of the insurance industry in Bahrain and the creation of the competition within that development, expecting the market to be crowded with many firms and how this results on the environment of the insurance industry in Bahrain.
Last but not least, pointing out the policies and strategies of Arabia insurance, as not all insurance firms have the same policies. Arabia insurance provides health insurance to the customers as we have listed in this project its three different polices of health insurance, and last the risk management.
Insurance companies offer many products such as life Assurance, Property Insurance, Health Insurance, General Accidents and many other insurance products.
In this report, we discussed Arabia Insurance and focused on the Health insurance Arabia Insurance is one of the insurance companies that provides satisfactory services to the Middle East market, With the time passing, people become more educated and acknowledge the importance of insuring their interests whether it was properties, automobiles, lives and even their health to protect against future unforeseeable risks.
With the growth in the market and increase in public awareness about Insurance and its benefits,
Competition has increased as each company seeks to provide its target customers with the better insurance products that fits their needs and guarantees fair compensation at the time of loss.
Arabia Insurance company implements well planned strategies to cope with the insurance market growth and fulfil its mission “To provide accessible, simple, effective and client-friendly products and services that respond to the evolving needs of our customers.”
Tables summarizing data gathered: