Libya Insurance Industry Grew in 2008-2011 despite Financial Crisis, Says Timetric11 Jun 2013 • by Natalie Aster
The Libyan insurance industry is very small when compared to other countries in the Middle East and North Africa (MENA) region. In terms of gross written premium, the insurance industry grew between 2008 and 2011 in spite of the global financial crisis. Political unrest in the form of the Arab Spring caused a 52% decline in the country’s insurance industry in 2011. It is expected that the industry will grow at a CAGR of 6.1% over the forecast period.
New report "The Insurance Industry in Libya, Key Trends and Opportunities to 2017" by Timetric states that Libya is one of the top oil exporting countries in the world. The export of oil constituted 95% of the country's export earnings and 70% of its GDP in 2011. During the Arab Spring, the production of oil in the country declined and the remaining oil production was diverted to domestic purposes. As a result, the country’s oil and natural gas exports were badly affected; the country's economy declined with GDP falling in 2011.
The Insurance Industry in Libya, Key Trends and Opportunities to 2017
Published: April, 2013
Price: US$ 1,950.00
The economic decline can be attributed to the country’s excessive dependence on fossil fuel exports. To mitigate this issue in the future, Libya’s government should diversify its economy by developing other sectors. Libya is quickly recovering from the 2011 downturn as one of the fastest-growing economies in the world, with a real GDP growth rate of 121.9% in 2012. The resumption of oil production is the primary source of Libya’s economic recovery.
The low insurance density (premium per capita) and penetration of the insurance industry is expected to encourage foreign insurance companies to enter the Libyan insurance industry over the forecast period. The industry’s premium per capita stood lower than other MENA countries such as Israel and Oman. It is also much lower than the premium per capita in developed countries such as France, Portugal, Germany and Italy. Insurance penetration as a percentage of GDP for Libya stood at 0.21% in 2012, lower than Israel’s 4.93% and Togo’s 1.09%, as well as in developed countries such as France (10.4%), Portugal (6.3%), Germany (6.9%) and Italy (6.9%).
Although the government expects a number of foreign investors to enter Libya, restrictions on foreign investments are hindering the entrance of many investors. According to Libyan law, a foreign insurance company looking to operate in Libya is not allowed to hold more than 49% share of a local insurance company; foreign insurance companies are also not allowed to establish branches in Libya.
More information can be found in the report “The Insurance Industry in Libya, Key Trends and Opportunities to 2017” by Timetric.
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