Worldwide: Global Growth: Entering New Insurance Markets

As insurers/reinsurers start to look beyond their domestic, often mature, markets for growth opportunities they face an almost overwhelming choice in terms of which markets to consider, the structures available and the advantages and disadvantages of each.

If you are looking to set up a new insurance underwriting business, location is a critical issue – not just where you want to be doing business, but also the speed of set up and the regulatory environment in which you will operate.

There is no doubt that London (of which the Lloyd's market is a major component) is one of the most pre-eminent insurance centres in the world, with around 15% of global industrial risks being placed there. Over the last five years a steady stream of foreign insurers – from both mature markets such as the US and Japan, as well as emerging economies such as China - have, either through acquisition, start-up or joint venture, established themselves in this insurance hub. But a range of other jurisdictions are making themselves attractive for start-ups; such as Zurich and Gibraltar, and increasingly Singapore for South East Asia.

An insurer/reinsurer looking to establish themselves needs to consider a number of different issues when looking at various locations – the time taken to obtain authorisation, capital requirements and the ability to do business around the world. For example the main advantage of Gibraltar or Malta is the speed of set-up. From the decision to apply for a licence to it being granted is typically between three and six months, whereas in the United Kingdom it would take that long just for the regulator to consider the application.

Over the last 20 years, Bermuda has proved to be a popular domicile – particularly for reinsurance businesses. The island's ability to respond to capacity shortages through the rapid creation of new carriers has been demonstrated time and time again. It combines rapid regulatory approval, an attractive tax environment and a geographic position that is convenient for both the US and Europe. Singapore too has made clear its ambitions to be a regional insurance hub and has taken steps to position itself as the market of choice in South East Asia.

This Report aims to offer a high level review – by region – of the opportunities and challenges available to an insurer/ reinsurer. We hope that you find this Report useful as part of your international underwriting strategy. If you have any follow up questions or would like to get in touch with a member of our Global Corporate Insurance Group then please do contact us.

Kind regards

Andrew Holderness

Bahrain

Regulator

Central Bank of Bahrain (CBB).

Key market facts

  • The Bahrain market (all classes) is ranked at 82 in the world in terms of gross premium size and the Bahrain non-life market is ranked at 84

General information

  • Population 1,346,613 (July 2015 est.)
  • Population growth rate 2.41% (2015 est.)
  • Median age 31.8 years
  • GDP real growth rate 4.5% (2014 est.)

Licences

  • Following a consultation process, the CBB decided not to pursue the proposal to permit the establishment of composite companies, subject to certain provisos. The position therefore remains that an insurance company cannot transact short-term (general) insurance business and long-term insurance business at the same time, except in the case of captive insurers or pure reinsurers, or takaful companies, which may transact general and family takaful business within the same company
  • There are strict fund separation rules, however, and takaful general and family funds have to be managed as though they were two separate licensed companies

Regulatory capital requirements

  • The insurance rulebook incorporates regulations for the calculation of solvency and capital requirements.
  • Branch – reduced capital requirements apply depending on the type of insurance business

Start-up

  • The Commercial Companies Law 21/2001 requires commercial registration with the Ministry of Commerce prior to applying for an insurance licence from CBB
  • Public joint stock companies must be 51% owned by Bahraini nationals under the Commercial Companies law. Holding company structures are permitted, although the CBB does not supervise holding companies but instead the insurance companies owned by holding companies

Acquisition

Bahraini closed joint stock companies can be 100% owned by a foreign entity under the terms of the Commercial Companies Law 2001.

Tax

  • There are no taxes, other than corporation tax levied on oil companies and social security payable by individuals
  • The Bahrain Institute of Banking and Finance is funded by a levy on the annual payrolls of banks and insurance companies in Bahrain
  • Bahrain has no taxes on personal or corporate income, sales, capital gains, estates, interest, dividends or fees but stamp duty is payable on property transfers

Cambodia

Regulator

Insurance Division of the Financial Industry Department of the Ministry of Economy and Finance (MEF).

Key market facts

  • Remains a relatively underdeveloped market, with a small number of insurers
  • GWP of USD 52.98 Million in 2014, approximately a 27% growth from 2013
  • The insurance market in Cambodia is driven primarily by income from one-off projects, rather than annually renewable businesses
  • Insurance penetration into the Cambodian population, both for personal and commercial line, has been minimal
  • Life insurance business only started in Cambodia in 2012

General information

  • Population 15,708,756 (July 2015 est.)
  • Population growth rate 1.58% (2015 est.)
  • Median age 24.5 years
  • GDP real growth rate 7% (2014 est.)

Licences

Insurers must be licenced by the MEF.

Regulatory capital requirements

  • Minimum Capital Requirement equal to USD 7 million for life or general insurance companies.
  • 10% of registered capital is deposited with the National Treasury
  • Minimum solvency margin of 50% of the registered capital during the first year of operation and thereafter adjusted based on annual net premiums

Start-up

  • Locally incorporated risk carriers only. Branch offices of foreign insurers are not permitted to conduct insurance business

Acquisition

  • 100% foreign ownership is permitted

Recent changes

Insurance Law No NS/RKM/0814/021 became effective on 4th February 2015 to replace the previous 2000 law.

Other facts

  • Cambodia has a young population, with 96% of its approximately 15.7 million inhabitants being under the age of 65 years
  • The economy of Cambodia is highly dollarised and the vast majority of transactions are conducted in USD. Fees and taxes are required to be paid in KHR
  • Compulsory cession of 20% of each risk to Cambodia Re

To continue reading this newsletter, please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions