Lebanon Insurance Report Q2 2016
BMI View: Our fundamental view of the Lebanese insurance sector remains unchanged. It is a small, butsteadily growing market. The expansion is being driven by demographics and rising health care costs: thisis boosting health insurance (and personal accident insurance) premiums. The prospects for life insuranceare hampered by the fact that all households that understand it and who can afford it are already using it.
Price competition will hamper the development of the motor vehicle and property insurance sub-sectors.
Key Updates And Forecasts
We have made minor changes to our forecasts, which now run to 2020. We have increased ourprojections for health insurance, which accounts for over half of the activity in the non-life segment. Thishas more than offset the impact of a downwards revision to projections in other non-life sub-sectors, aswe have taken into account the mixed economic conditions and downwards pressures on prices. We havealso revised our life insurance forecasts down a little, in order to recognised the insurers' difficulties inreaching new clients.
We remain of the view that two broad themes will shape the development of premiums in the non-lifesegment, through this year, the remainder of the forecast period and - indeed - later years. One theme isthe ageing demographic of Lebanon. This should underpin double-digit growth in demand for healthinsurance - a sub-sector which already accounts for about half of all activity. Crucially, the insurersshould enjoy both higher volumes and stable, or increasing, prices. The demographic factor should also boost demand for personal accident insurance. The second main theme is price competition in theimportant motor vehicle and property insurance sub-sectors - which will limit the expansion in premiums.
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