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A low oil price environment has presented a number of challenges for Bahrain’s vibrant and fiercely competitive insurance sector. Downward pressure on premiums and a dearth of underwriting opportunities across the region have negatively affected the bottom lines of most Manama-based insurers. However, new opportunities in areas such as health care insurance and the extension of compulsory cover to more areas of the economy are offering routes to growth during this difficult period.

Reduced oil prices and fiscal austerity measures being carried out by governments across the GCC have resulted in a challenging environment for Bahrain’s sharia-compliant financial institutions. The competitive domestic market – home to the largest concentration of Islamic financial institutions in the Middle East – has reacted to adverse conditions, with what appears to be the beginning of a long-awaited period of consolidation: both the banking and takaful (Islamic insurance) segments saw significant merger and acquisition activity over the past year. The sector also received notice in 2017 of a change in the regulatory framework that will usher in a new era of oversight. This chapter contains an interview with Hassan Jarrar, CEO, Bahrain Islamic Bank.

Despite a challenging investment environment, Bahrain’s exchange showed a relatively strong performance in 2017, with index gains in most sectors. Macroeconomic challenges remain in 2018, but new investment instruments and some significant changes to the exchange’s infrastructure are helping it to maintain its status as one of the most progressively regulated markets it the region – a key asset in the regional competition for investment capital. This chapter contains an interview with Sheikh Khalifa bin Ebrahim Al Khalifa, CEO, Bahrain Bourse; and Najla M Al Shirawi, CEO, SICO.

Bahrain’s reputation as a regional financial centre rests in part on the early flourishing of its banking industry. The country’s first modern bank was established nearly 100 years ago following an agreement between the kingdom’s ruler at the time, Sheikh Isa bin Ali Al Khalifa, and the UK-owned and Indian-headquartered Oriental Bank. As Bahrain’s banking sector completes its third full year of operation in a lower oil price environment, profitability and asset growth in the industry has turned flat. However, thanks to a robust regulatory framework there has been no significant deterioration in asset quality, and there is sufficient liquidity in the system to allow banks to pursue lending opportunities. The sector has also seen some interesting regulatory changes over the past year, aimed at maintaining the kingdom’s position as a regional leader. This chapter contains an interview with Jean-Christophe Durand, CEO, National Bank of Bahrain.

The kingdom of Bahrain, renowned for its open markets and one of the most vibrant financial industries in the region, has faced economic headwinds in recent years. Lower oil prices have affected the many corporates that have chosen Manama as a base for their regional operations, and a stubborn fiscal deficit has resulted in a record-high level of public debt. The government has responded with a process of financial adjustment that is slowly narrowing the fiscal gap, but its longer-term solution to the economic challenges it faces rests on wider reform initiatives that aim to build on the kingdom’s already relatively diversified economy. This chapter contains an interview with Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board; and Mahmood Al Kooheji, CEO, Mumtalakat.

For much of its history Bahrain was the name for the eastern coast of Arabia. Bahrain means “two seas” in Arabic, and although it is unclear which two seas the name refers to, it has recently come to identify the 33 natural islands of the Awal archipelago. The first notable inhabitants of the region were the Dilmun civilisation, approximately 6000 years ago, but throughout history its geographically strategic location has attracted the attention of numerous empires, including the Persians, Sumerians, Assyrians, Babylonians, Arabs, Portuguese and British. In 1932 Bahrain pioneered oil production in the Middle East, and in so doing established the region’s initial framework for the petroleum industry. The new resource enabled Bahrain to modernise its economy by moving beyond traditional industries such as pearl diving and fishing. At an early stage the kingdom sought to diversify its economy, and established itself as a leading regional financial centre in the 1970s and 1980s. This chapter contains a viewpoint from King Hamad bin Isa Al Khalifa.