1. THE 2ND INTERNATIONAL ISTANBUL INSURANCE CONFERENCE (İstanbul 30 September – 1 October 2010) 1

2. “Recent Re/Insurance Trends MENA Region in the MENA Region” By Gökhan AKTAŞ (Chief Area Underwriter – Milli Re) 2

3. 3 MENA Region Insurance Sector in General  Low insurance penetration 3 Insurance Penetration 2009 (%) GCC : 1,4% MENA : 1,6% World : 7%

4. MENA Region Insurance Sector in General  Very soft market / Cut-throat price competition  “Young” insurance regulation differing across the Region  A number of players with low capital levels when compared with international standards 4

5. MENA Region Insurance Sector in General  MENA Insurance markets rank below the world average with a contribution of 0,53% to the total world premium 5 Total premium volume (millions of USD) 2009 Share of world market (%) Life premium volume (millions of USD) Share of world market (%) Non-life premium volume (millions of USD) Share of world market (%) Insurance Premiums 2009 Middle East (ME) UAE5.1130,137320,034.3810,25 Iran4.3160,112250,014.0910,24 Saudi Arabia3.8960,102670,013.6290,21 Lebanon9520,022320,017200,04 Qatar7730,02007730,04 Oman6270,02 1020 5250,03 Jordan5100,014904600,03 Bahrain4940,011370,013570,02 Kuwait4570,018803690,02 Sub-total ME17.4800,392,2070,0914.2770,80

6. Total premium volume (millions of USD) 2009 Share of world market (%) Life premium volume (millions of USD) Share of world market (%) Non-life premium volume (millions of USD) Share of world market (%) North Africa (NA) Morocco2.5830,068250,041.7580,10 Egypt1.5650,067040,038610,05 Algeria 7970,026307340,04 Tunisia7580,0210006580,04 Sub-total NA5.8650,141.6570,074.2440,24 Total MENA23.3450,533.8640,1618.5221,04 Total Asia933.35821,26690.95127,74242.40713,62 Total World4.269.7371002.490.4211001.779.316100 6 MENA Region Insurance Sector in GeneralInsurance Sector in General

7. 7 MENA Region Insurance Sector in General  GCC witnessed a record premium growth rate in past few years with a solid future outlook 7

8. MENA Region Insurance Sector in General  Slower growth in life and non-life premiums when compared to 2008 8 20092008 S.Arabia33,8%27,1% Oman15,8%26,0% Egypt12,1%28,1% Jordan8,6%14,1% Lebanon8,1%15,7% U.A.E.2,8%25,2% Morocco1,4%17,9% Iran0,3%16,4% Bahrain-0,7%33,5% Tunisia-3,0%12,6% Qatar-8,7%44,0% Algeria-24,1%35,4% Kuwait-31,9%14,8% Average MENA4,4%22,3% Average GCC8,8%25,1% Average WORLD-3,7%2,2%

9.  Liability Insurance  Premiums classified as liability make up about 2.7% of the non-life account with 2009 premiums of just under USD 28 mio in Algeria  In Lebanon, liability account grew by 12.5% in 2008 and the incurred loss ratio realised as 27.3%  In Libya market liability account grew by 42.75% in 2009 to reach a total gross premium income of USD 19.5 mio. The paid L/R of the account in 2009 was 12%  The gross market incurred loss ratio in 2008 regarding the liability classes was 10.34% for Bahrain 9 MENA Region Insurance Sector in General

10.  Islamic Insurance – Takaful Market by Region 10 MENA Region Insurance Sector in General 2008 $9,4 billion 2004 $3,9 billion

11. 11 MENA Region Insurance Sector in General  Islamic Insurance – Takaful Market by Line of Business in 2008 (%)

12.  Introduction of compulsory insurances like motor and health  Financial Centers  Dubai International Financial Centre  Qatar Financial Centre  Central Bank of Bahrain  Calls for consolidation across the region’s fragmented and highly competitive markets 12 MENA Region Insurance Sector in General

13. 13  Increase in the frequency of cat losses in the last 5 years Cyclone GONU – June 2007 Economic Loss: USD 3,2 billion Insured Loss : USD 1 billion Cyclone PHET – June 2009 Economic Loss: USD 776 millin Insured Loss : USD 200 million Floods in JEDDAH – November 2009 Economic Loss : USD 930 million Insured Loss : USD 200 million 13 MENA Region Insurance Sector in General

14.  Dominance of Proportional Treaties.  Small XL business.  Low retention levels.  High dependence on reinsurance (in some cases 80%-90% of business reinsured)  Relatively high commission rates. 14 MENA Region Reinsurance Practices

15.  Minimal impact of financial crisis on reinsurance pricing in GCC.  Despite the global crisis, the region has not faced any capacity problems.  No significant changes in proportional treaty terms and conditions.  Limitations to Fac. Inward Acceptances.  Imposition or widening of loss corridors. 15 MENA Region 2010 Renewals

16.  Flat rates in non-proportional treaties / slight decreases in loss-free layers in Middle-East.  Reduction in EPI figures.  Diversification in the panel of reinsurers in Northern African Markets. 16 MENA Region 2010 Renewals

17. BranchPremium Insurance Density Insurance Penetration Non-Life$734.000.000$210,6% ALGERIA Population: 34.900.000 GDP : $130 billion GDP per capita: $ 3.725 Inflation rate : 5,4 % Growth rate: 2 % Insurance premium: $ 797 million Number of companies:16 (7government, 7 private, 2 mutual) 17 MENA Region TRENDS / OPPORTUNITIES

18. Algeria Insurance Market Review  Domination of state owned insurance companies  Compulsory insurance against catastrophes  Gold Mines: Personal Liability and Life Insurance  Public Investment Programme 18 MENA Region TRENDS / OPPORTUNITIES

19. BranchPremium Insurance Density Insurance Penetration Non-Life$357,000,000$446,31,6% BAHRAIN Population: 800.000 GDP : $ 22 billion GDP per capita: $ 27.500 Inflation rate : 2,8% Growth rate: 2,2% Insurance premium: $ 494 million Number of companies: 26 19 The role of the Bahrain Financial Harbour. Opportunities on the health side. MENA Region TRENDS / OPPORTUNITIES

20. EGYPT Population: 83 million GDP : $ 188 billion GDP per capita: $ 2.265 Inflation rate : 16,2% Growth rate: 4,7% Insurance premium: $ 1.565 million Number of companies: 26 BranchPremium Insurance Density Insurance Penetration Non-Life$861.000.000$10,40,5% 20 MENA Region TRENDS / OPPORTUNITIES

21. Egypt Insurance Market Review  Regulatory changes  The first stage of reforms (2004-2008)  The second stage of reforms (2009-2012) 21 MENA Region TRENDS / OPPORTUNITIES

22. BranchPremium Insurance Density Insurance Penetration Non-Life$4,091,000,000$55,1%1,1 IRAN Population: 74.200.000 GDP : $ 369 billion GDP per capita : $ 4.973 Inflation rate : 12,2% Insurance Premium: $ 4.316 million Growth rate: 0,9% Number of companies: 19 22 MENA Region TRENDS / OPPORTUNITIES

23. Iran Insurance Market Review  Privatisation law.  A new draft of the Insurance Overhaul Plan.  Dominance of the state owned insurance companies.  Dominance of the XL Treaties versus Proportional Treaties. 23 MENA Region TRENDS / OPPORTUNITIES

24. BranchPremium Insurance Density Insurance Penetration Non-Life$3.629.000.000$141,10,9% SAUDI ARABIA Population: 25.700.000 GDP : $ 390 billion GDP per capita: $15.175 Inflation rate : 5,1% Insurance premium: $3.896 million Growth rate: % 0,1 Number of companies: 29 24 MENA Region TRENDS / OPPORTUNITIES

25. Saudi Arabia Insurance Market Review  Strong growth over the next five years.  Enforcement of compulsory health insurance.  Establishment of Saudi Re.  Young population and the overall growth of the financial sector. 25 MENA Region TRENDS / OPPORTUNITIES

26. BranchPremium Insurance Density Insurance Penetration Non-Life$773,000,000$548,60.8% QATAR Population: 1.400.000 GDP :$ 93 billion GDP per capita :$ 66.428 Inflation rate : -4,9% Growth rate: 9,5% Insurance premium: $ 773 million Number of companies: 19 26 Efforts to encourage health insurance. The role of QFC (Qatar Financial Center) MENA Region TRENDS / OPPORTUNITIES

27. BranchPremium Insurance Density Insurance Penetration Non-Life$369,000,000$123,50,4% KUWAIT Population: 3.000.000 GDP : $101 billion GDP per capita : $ 33.666 Inflation rate : 3,9% Growth rate: 9,5% Insurance premium:$ 457 million Number of companies: 24 27 MENA Region TRENDS / OPPORTUNITIES

28. Kuwait Insurance Market Review  85.5% of the market premium is written by the local companies.  More than 10 takaful companies.  Significant growth potential due to young population. 28 MENA Region TRENDS / OPPORTUNITIES

29. BranchPremium Insurance Density Insurance Penetration Non-Life$720,000,000$170,52,3% LEBANON Population: 4.200.000 GDP : $ 31 billion GDP per capita :$ 7.380 Inflation rate : 1,1% Growth rate: 6% Insurance premium: $ 952 million Number of companies: 54 29 MENA Region TRENDS / OPPORTUNITIES

30. Lebanon Insurance Market Review  One of the largest Life Insurance Markets in MENA Region.  Efforts to be recognised as a regional hub.  A new pension plan.  Need of a new insurance law. 30 MENA Region TRENDS / OPPORTUNITIES

31. BranchPremium Insurance Density Insurance Penetration Non-Life$4,381,000,000$952,72,1% U.A.E Population: 4.600.000 GDP : $ 205 billion GDP per capita: $ 44.565 Inflation rate : 1,6% Insurance premium:$ 5.113 million Growth rate: 1,3% Number of companies: 58 31 MENA Region TRENDS / OPPORTUNITIES

32. U.A.E Insurance Market Review  Leader in GCC countries i.r.o premium production.  Disappointing absence of regulatory development.  Low rates, large losses. 32 MENA Region TRENDS / OPPORTUNITIES

33. BranchPremium Insurance Density Insurance Penetration Non-Life$525,000,000$187,51%1% OMAN Population: 2.800.000 GDP :$ 53 billion GDP per capita : $ 18.928 Inflation rate : 3,6% Growth rate: 3,7% Insurance premium: $ 627 million Number of companies: 16 (9 domestic, 7 foreign ) 33 MENA Region TRENDS / OPPORTUNITIES

34. Oman Insurance Market Review  The formation of Oman Re.  Orange Card  Medical Insurance offering vast potential. 34 MENA Region TRENDS / OPPORTUNITIES

35. BranchPremium Insurance Volume Insurance Penetration Ratio Non-Life $460,000,000$72,92,1% JORDAN Population: 6.300.000 GDP : $ 22 billion GDP per capita : $ 3.492 Inflation rate : -0,6% Growth rate: 2,1% Insurance premium: $ 510 million Number of companies: 28 35 MENA Region TRENDS / OPPORTUNITIES

36. Jordan Insurance Market Review  New minimum capital requirement.  New instructions to regulate the bancassurance business.  Amendment on civil health insurance. 36 MENA Region TRENDS / OPPORTUNITIES

37. BranchPremium Insurance Density Insurance Penetration Non-Life$658.000.000$641,65% TUNISIA Population: 10.300.000 GDP : $ 40 billion GDP per capita: $ 3.883 Inflation rate : 3,7% Growth rate: 2,8% Insurance premium: $ 758 million Number of companies: 22 (18 domestic,4 foreign) 37 MENA Region TRENDS / OPPORTUNITIES

38. Tunisia Insurance Market Review  Partial privatisation of The Societe Tunisienne d’Assurances et de Reassurances (STAR).  Updated regulations.  Tunis Financial Harbour. 38 MENA Region TRENDS / OPPORTUNITIES

39. BranchPremium Insurance Density Insurance Penetration Non-Life$1,758,000,000$551,9% MOROCCO Population: 32,000,000 GDP : $ 91 billion GDP per capita: $ 2.843 Inflation rate : 1,2% Growth rate: 5,3% Insurance premium: $ 2.583 million Number of companies: 27 39 MENA Region TRENDS / OPPORTUNITIES

40. Morocco Insurance Market Review  Leader in North Africa.  Free trade agreement with US.  Removal of obligatory cession for non-life business by 2012.  Launch of first risk management association. 40 MENA Region TRENDS / OPPORTUNITIES

41. THANK YOU FOR YOUR ATTENTION 41