1. DEVELOPING THE MENA INSURANCE SECTOR – ECONOMETRIC AND ANECDOTAL INDICATORS RODNEY LESTER WORLD BANK CONSULTANT

2. Source: AXCO

4. Core economic and structural drivers of penetration – country effects proxies P&CLife GDP/ Capita Population Population Density Inflation GDP/ Capita Inflation Population (trade proxy)

5. P&C Penetration v. GDP/ Capita and Actual v. Expected after economic and structural factors

6. Life Penetration v. GDP/ Capita and Actual v. Expected after economic and structural factors

7. Other highly predictive drivers of penetration P&C Life Private credit Private insurer SOM Top 20% income share Sharia role Private credit Legal rights Sharia role Private insurer SOM Car fleet Bond Market Legal rights Concentration Old age dependency

8. The scale/ competition trade off leads to natural concentrations levels Source: Thorburn, ‘Insurers: Too Many, Too Few or Just right”

9. Motor premiums in MENA are less than they should be

10. Things that can be changed relatively quickly IssueResponse MTPL Tie to annual car registration, set up central claims database, keep politicians out of pricing, use nominal defendant Efficient industry structure Set minimum capital, minimum premium retentions, minimum market shares for mandatory lines, privatize government insurers, ensure exit of insolvent insurers Mandatory insurances Add mandatory coverages that have social benefit – WCA, general liability, PI, health etc Sharia law Focus on developing family Takaful Private credit development Encourage mortgage and personal loan market development Bond markets Encourage development of bond markets and yield curve standard Consumer protection Institute basic consumer protection regime – transparency, recourse, education.

11. MENA’s low insurance penetration represents an enormous opportunity