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Bahrain woos insurance firms with liberal rules

MANAMA - Bahrain's liberal regulations for establishing insurance firms may help the Gulf state become a regional hub for the industry, in addition to its status as an offshore banking centre, industry experts said on Wednesday.

As Saudi Arabia prepares to open up its insurance market, more than 70 international and regional offshore insurance firms have already registered in nearby Bahrain to seek a share of the $800 million Saudi market. "It is very difficult for a foreign player right at this moment to get a licence in the other Gulf Arab countries," said Iain Reid, the Middle East regional director of Norwich Union, part of UK insurer Aviva.

Bahrain promotes itself as an attractive location for businesses, with liberal and consistent regulation, to compete with neighbours that have grown rich through producing oil and gas.

It is also seeking to attract companies by building an international insurance centre as part of a $1.3 billion financial complex project.

Bahrain has set the minimum required capital for insurance companies at a relatively low one million dinars ($2.65 million), much below an expected minimum of $25 million in Saudi Arabia.

Other industry insiders said large Western players might not be attracted by the comparatively small Gulf market, despite the attractive conditions Bahrain offered.