The FINANCIAL — Insurance can promote economic development, create jobs and boost trade across the Middle East and North Africa (MENA) region, according to “The Role of Insurance in MENA” – a new report from Zurich Insurance Group (Zurich) launched at the World Economic Forum, MENA summit, held in Jordan from May 24-26.
Though the MENA region has made considerable progress over the last decade, with some of the lowest insurance penetration rates in the world, there is still large growth potential in the insurance sector. However, insurance can help to transform the MENA economies to address many of the economic and social challenges facing the region, including helping nations to diversify and modernize their economies to create sufficient employment opportunities for the young, according to Zurich Insurance Company Ltd.
“The role of insurance in emerging economies is often not well understood and underestimated. For these fast growing countries, insurance supports the pace of economic development and protects quality of life. It safeguards and rebuilds the foundations of economic activity after unexpected loss, like in the wake of natural catastrophes. Insurance can also play an important part in funding retirement solutions. It not only provides long-term savings vehicles, but also addresses risks that might affect the ability to save (i.e. disability) or living longer than expected (i.e. longevity risk) on one’s savings. In addition, given the long-term nature of their liabilities, insurers are ideally suited to provide finance for growth enhancing long-term investments. Finally, the insurance industry is a dynamic services sector which creates employment and entrepreneurship opportunities at all levels and in adjacent services sector,” Saad Mered, CEO General Insurance Middle East & Africa, Zurich Insurance Group said.
The MENA region has some of the lowest insurance penetration rates in the world. The average insurance penetration rate across the MENA region is 1.5%, which is almost four times lower than Singapore and almost eight times lower than the UK, according to Zurich Insurance Company Ltd.
Against this backdrop, wider use of insurance in the MENA region would greatly speed up the region’s continued economic progress.
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