Global Insurance Market Update

Middle East and Africa Pricing Q1 2022

Larger insurance programs, in the Middle East and Africa are generally placed via the reinsurance market, which follows changes similar to the international reinsurance market.

Middle East and North Africa Insurance Pricing Trends

Understanding the MENA Insurance Market

Larger insurance programs, in MENA are generally placed via the reinsurance market, which follows changes similar to the international reinsurance market. This is due to local insurers in MENA, in general, not being able to act as a leader on large insurance programs, due to limited capacity. Therefore, larger more complex risks are more dependent on the reinsurance market.

Middle East and Africa Pricing - Q1 2022

United Arab Emirates

Casualty: Casualty insurance market pricing increased 4% in the first quarter, compared to an average 5% decrease in the fourth quarter of 2021.

Property: Property insurance market pricing increased 3% in the first quarter, on average, the same as experienced in the fourth quarter of 2021

Saudi Arabia

Casualty: The casualty market continued to soften in the first quarter, with pricing generally experiencing reductions ranging from 5% to 7.5%.

Liability pricing continued to stabilize, with increased demand from various business segments, particularly engineering, procurement, and construction (EPC), and operation and maintenance (O&M) contractors venturing into new projects. There was an increase in aviation liability queries due to privatization of the aviation sector. Aviation liability pricing increased more than 10%, on average, in the first quarter.

Property: Property insurance pricing reductions averaged of 5% in the first quarter. Larger and higher hazard risks continued to see rate increases in Larger and higher hazard risks continued to see rate increases in excess of 5% in the first quarter as insurers continued to offload certain risks, take smaller shares, and invite new participants. The increased capacities of local markets helped contain the impact of pricing increases on catastrophe exposed risks. Non-catastrophe risks remained targets for local markets, which often offered reduced pricing.

Qatar

Casualty: Pricing in the first quarter in the casualty insurance market remained generally stable, declining 1%, on average.

  • Clients requesting higher limits for general liability insurance were supported by regional/international reinsurers, as local market capacity was limited.
  • With the FIFA World Cup approaching, the requirement for professional indemnity insurance may increase in 2022
  • Auto liability (motor third party liability) is compulsory in Auto liability (motor third party liability) is compulsory in Qatar, there is no cap on liability, and the pricing is fixed depending on the capacity. On comprehensive coverages, there were some reductions in rates for clients with good claims history

Property: On average, property pricing increased 3% in the first quarter, compared to 13% in the prior quarter.

  • Clients requesting higher limits for general liability insurance were supported by regional/international reinsurers, as local market capacity was limited
  • Insurers generally increased deductibles and restricted coverage during the pandemic. They typically have not returned to pre-pandemic levels, and instead have maintained or increased deductibles, and did not offer extensions
  • Early discussions, claims free programs, and quality of risks continued to be the determining factors in discussions with the (re)insurance market. 

Property insurance pricing increased an average of 29% in the first quarter. Some insurers that experienced significant property insurance losses due to Cyclone Shaheen offered limited, if any, capacity in the first quarter.

Oman

Insurance pricing was generally stable in the fourth quarter of 2021, with the exception of property and engineering risks, which experienced increased claims following Cyclone Shaheen.

Casualty: Pricing in the casualty insurance market remained stable and competitive, declining 3% on average in the first quarter.

  • Professional indemnity insurance is gaining attention among clients recently, with all government contracts requiring professional indemnity cover.

Property: Property insurance pricing increased an average of 29% in the first quarter. Some insurers that experienced significant property insurance losses due to Cyclone Shaheen offered limited, if any, capacity in the first quarter.

  • Overall capacity reduced in the first quarter; however, city based exposures with no losses generally experienced flat renewals, while those with losses experienced increases in the 15% to 25% range.
  • Property insurance pricing increases ranged from 100% to 150%, with increases in deductibles and stringent loss limits for natural catastrophe risks.
  • Further losses from a cyclone or flooding incident could potentially deteriorate market capacity and appetite for natural catastrophe risks, potentially leading to their exclusion in the future.

Egypt

In the local insurance market in Egypt, overall pricing was stable, with generally minimal or flat increases. Purchasing coverage from international markets tended to bring pricing increases, in line with global trends.

Casualty: Pricing was generally stable as local markets had sufficient capacity.

Property: As most of Egypt's businesses are not in catastrophe areas, property insurance pricing remained stable, particularly when local markets provided coverage.

  • Accessing international markets generally brought higher increases.
  • Clients in catastrophe areas generally saw higher rates and, for some, restrictions in coverage.

Bahrain

Overall, insurance pricing remained stable in the first quarter of 2022.

Casualty: Pricing in the casualty market remained stable in the first quarter.

  • The general liability market remained stable and consistent in terms of pricing.
  • Auto liability is a compulsory insurance connected with the registration of any vehicle; auto liability rates and excess coverage remained stable.

Property: Pricing in the property market remained generally stable in the fourth quarter, due to insurers relying on reinsurance treaties to meet the local competition.

  • Some local insurers reduced capacity due to internal guidelines or treaty restrictions.
  • Some large risks experienced moderate pricing increases.
  • Bahrain is generally a low-catastrophe area, however, when international markets were accessed, pricing was typically higher with some restrictions in coverage.

South Africa

Insurance pricing in South Africa is heavily dependent on risk specifics. In some instances, international markets are competitive with local ones, in other cases their pricing is higher.

Casualty: Year-over-year pricing in casualty markets generally increased between 10% and 45% in the fourth quarter of 2021.

  • Product recall and spread of fire coverages experienced increased rates and deductibles, and a reduction in available limits.
  • Increases varied depending on the nature of risk, claims experience, and overall risk management.
  • Contaminated product insurance experienced significant capacity challenges, especially on food-related risks.
  • Capacity declined and pricing increased in the property, terrorism, and sabotage (PTS) market following recent riots, with increases exceeding 100% in most cases.

Property: Property insurance pricing increased by 18% in the quarter, compared to a 23% increase the prior quarter.

  • Increases varied depending on the nature of risk, claims experience, and overall risk management.
  • International markets continued to be more competitive than local markets on certain risks.
  • For large and complex placements we continue to see differential terms, with associated higher costs when completing them.