The Zurich Insurance Group report has shown that the sector in these regions is ready to expand.
According to a new report from Zurich, the insurance industry is ready for a considerable amount of growth in both the Middle East and North Africa, and this could lead to a significant level of economic growth in those regions.
At the same time, it noted that while there is growth potential, there remain several challenges in the way.
The insurance industry in the Middle East and North Africa (MENA) region currently has the lowest penetration rate in the world. At the moment, it is estimated that it has reached only 1.5 percent. The report from Zurich suggests that this suggests the potential for a massive amount of growth within that region.
It also stated that the growth of the insurance industry could lead to a much more stable and developed economy.
The company stated that by providing the region with coverage from the insurance industry the economy could stabilize due to a number of reasons. Among them, the report identified that commercial development projects will be given the opportunity to go ahead because they will have the protection that they need to make them worthwhile and to mitigate their associated risks.
The role that the insurance industry plays in emerging economics is large but greatly misunderstood. According to the Zurich General Insurance, Middle East and Africa CEO, Saad Mered, “The role of insurance in emerging economies is often not well understood and underestimated.” He added that “For these fast growing countries, insurance supports the pace of economic development and protects quality of life,” going on to say that “It safeguards and rebuilds the foundations of economic activity after unexpected loss, like in the wake of natural catastrophes.”
Mered also pointed out that the insurance industry is very well suited for providing finance for long term investments that will enhance growth, simply because of the long term nature of the liabilities that are associated with the coverage. Moreover, it is, in itself, a dynamic service sector, which means that it provides the areas with opportunities for entrepreneurship as well as employment at all levels as well as in related and adjacent sectors.