MANAMA: BahrainÕs insurance market saw around eight per cent growth in gross premiums to BD258.41 million ($685m) last year when compared with the previous year, the Central Bank of Bahrain (CBB) said yesterday.

A significant part of the increase is attributed to a surge in motor insurance, which increased from BD61.99m in 2012 to BD68.05m last year, seeing a growth of around 10pc.

Motor insurance is the largest in terms of gross premiums, which represented around 26pc of the total premiums/contributions written last year.

Medical insurance premia saw an increase of around 10pc to BD40.83m last year from BD37.17m in 2012, representing almost 16pc of total premiums written.

The takaful industry saw around 7pc growth in gross contributions to BD57.22m last year when compared with BD53.67m in 2012.

Gross contributions of takaful firms represent around 22pc of total gross premia last year.

Total assets of insurance and takaful firms last year stood at BD1,698.33m when compared with BD1,613.28m in 2012, an increase of approximately 5pc.

By the end of last year, BahrainÕs domestic insurance market comprised 25 locally incorporated firms and 11 overseas insurance firms (branches of foreign companies) carrying out insurance, reinsurance, takaful, retakaful and captives business in the kingdom.

Locally incorporated firms include 14 conventional insurance firms, six takaful firms, two reinsurance firms, two retakaful firms and one captive, while overseas insurance firms include eight conventional insurance firms and three reinsurance firms.

In addition, there are a number of firms only allowed to carry out business outside Bahrain and insurance ancillary services.

ÒThe insurance sector in Bahrain holds tremendous promise for growth, as demonstrated by the industryÕs strong performance not only during last year but also during the past five years,Ó said CBB executive director for financial institutions supervision Abdul Rahman Al Baker.

ÒBahrain is fast becoming a hub for major regional and international reinsurance and retakaful firms as evidenced by the number of such firms that are set up in the kingdom,Ó said Mr Al Baker.

By end of last year, there were five conventional reinsurance firms and two retakaful firms in Bahrain.

The gross premiums of reinsurance and retakaful firms were BD336.57m last year compared with BD312.12m in 2012, an increase of around 8pc.

ÒWe expect the insurance sector to continue its growth in the coming years, mainly due to the increase in the public awareness on the importance of the insurance products in general, as well as due to the surge in the economic growth of the kingdom and the soundness of regulatory and supervisory framework of the insurance sector in Bahrain,Ó added Mr Al Baker.

Gross premiums generated in the domestic market amounted to BD258.41m last year, up from BD239.05m in 2012.

Long-term (life and savings products) insurance generated gross premiums amounted to BD62.77m last year.

Long-term insurance premiums represented 24pc of total premiums written by insurance market in Bahrain last year.

Medical insurance witnessed a growth of almost 10pc in gross premiums to BD40.83m last year compared with BD37.17m in 2012.

Medical insurance premiums represented around 16pc of total premiums written in BahrainÕs insurance market.

Motor insurance constituted the single largest class of business, generating gross premiums of BD68.05m last year compared with BD61.99m in 2012, an increase of around 10pc.

Motor insurance accounted for 26pc of total premiums written by the insurance market in Bahrain.

Fire, property and liability insurance premiums represented 18pc of total premiums written by the market.

Fire, property and liability insurance premiums totalled BD47.20m last year compared with BD41.75m in 2012, an increase of approximately 13pc.

ÒDue to the well-established regulatory regime, a number of leading international insurance companies established their insurance and reinsurance operations in Bahrain both in conventional and takaful, which has further consolidated BahrainÕs global profile as a financial centre,Ó said CBB director for insurance supervision Fouad Abdulla.

ÒThe increase of insurance ancillary services in Bahrain provides an important source of synergy to these international companies.

ÒThe CBB continues to further enhance its regulatory framework to be in line with the best international financial standards and boost the confidence of insurance licensees and general public,Ó he added.