This note summarizes the conclusions of the review of the insurance sector in the Lebanon as part of the Financial Sector Assessment Program (FSAP).
... See More + The main objectives of the assessment are to review the performance and structure of the insurance sector with respect to: the potential exposure of the sector to vulnerabilities, either generated from the sector or in response to other circumstances outside the sector that could either be magnified or dampened by the sector; the potential for the sector to grow and develop, in its own context and also to contribute to the overall long term growth and development of the economy and the well-being of the Argentine people; and the relationship between the oversight and regulatory arrangements for the sector against international norms and best practices. The note focusses, primarily, on the 'developmental' objective. The note is prepared in varying levels of detail selectively identifying then developing issues and based firmly in an analysis of the existing market situation and performance. The insurance sector is material compared to other markets in the region but small by worldwide standards. The sector has grown in nominal and real terms supported by growth in motor and medical insurance. Life insurance growth has been supported by the development of a bancassurance model, including the introduction of single premium credit life products.
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Financial Sector Assessment Program (FSAP) 84238 DEC 01, 2013
Lebanese capital market is relatively small as the financial market is dominated by the banking sector. It is apparent that banks dominate financial intermediation in Lebanon to the extent it may inhibit the development of capital markets.
... See More + Government sees the need to develop capital markets to help finance corporate growth and infrastructure development. It is incumbent on the Government to establish a comprehensive capital market development program, which includes efforts to increase supply and demand, strengthen supervision and enforcement, and must be accompanied by an effective outreach campaign, both domestically and internationally. On the demand side, creating a steady flow of investment into instruments with a long-term horizon, primarily from the pension and insurance sectors, will help grow the markets. Increased demand from institutional investors and issuance by large companies will attract more companies to the capital markets. All these efforts need to be complemented by the issuance of effective regulations, and proper supervision and enforcement. A proactive and concerted campaign regionally and internationally may be conducted once there is a strong evidence of support from the private sector, and especially once new IPOs begin to come to the market. Similar campaigns like these have been proven to be effective, as experienced by other markets, such as Chile and Brazil. Meanwhile, promotion of the market and domestic investor education will need to be done in concert, not only about investing in the stock market, but also with respect to various other savings programs suitable to retail investors such as investment funds
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Financial Sector Assessment Program (FSAP) 84236 DEC 01, 2013