Prospect of higher capital requirements improves market prospects

Relative political stability has returned to Lebanon, following an agreement concluded in May 2008 between the various pro-western and pro-Syria factions to form a unity government. There appears to be cautious optimism that the political situation will be maintained. In addition, a new insurance law is in the process of being drafted and even though this law may not be introduced until 2010, the move is seen as positive, particularly by foreign investors. The draft law is said to contain provisions entailing a 500% increase in minimum capital for insurance companies and the mandatory separation of life and non-life operations into separate corporate entities. Such measures would lead to the reduction of the number of companies in the marketplace to a more sustainable level

According to the latest information available from the Association des Compagnies d’Assurances au Liban (ACAL), there were 53 licensed insurance companies in Lebanon in 2007, compared to 88 at the time of implementation of the Law 94 of 18 June 1999.