Lebanon’s insurance sector needs a boost
Economy & Trade Minister Basil Fuleihan emphasized the need to develop the Lebanese insurance sector and to have it play a greater role in the economy. In remarks on the state of the sector, Mr.Fuleihan said Lebanon needs an efficient insurance market to protect policyholder rights and to generate enough funds for long-term investment in the country, which would contribute to the development of the economy and its capital markets.
He noted that although premiums have been rising at an average annual growth of 12 percent since 1997 and consolidated equity is well above 10 percent of aggregate premium, the sector is till considered small at $390 million. Also, insurance penetration in Lebanon is still modest despite the sector’s growth over the past five years in stature and strength. The total premium-to-GDP ratio averaged a modest 2.3 percent for the 1995-99 period and premium-per-capita in 1999 amounted to $98, which places Lebanon well below the high levels of insurance density present in mature markets that could go up to $4,500 per capita.
Mr.Fuleihan considered the sector to be in a stage of low to intermediate development with large untapped potential, especially in the life segment where density stands at a low $21. He added that the industry must consolidate itself to improve its financial situation, and continue to raise its human capital, technology and public image. Further, insurers must raise the level of productivity, efficiency and market reach by re-examining core aspects of their operations such as distribution, investment and administration. Finally, the minister pledged to develop new laws and regulations to efficiently regulate the sector and to strengthen supervisory institutions and adopt modern supervisory procedures. — ( Lebanon Invest )