Rising tensions in the Gulf region have not yet affected business insurance premiums, but firms should ensure they are covered for any eventuality, an industry expert said yesterday.

Bahrain Insurance Association (BIA) chairman Ashraf Bseisu was speaking after a meeting between members of his organisation and the Arab War Risk Insurance Syndicate (AWRIS), where both sides discussed specialised insurance lines including protection against war, riots, strikes, and sabotage and terrorism.

AWRIS general manager Mahdi Al Aradi spoke to the BIA's marine committee at the Bahrain Institute of Banking and Finance to explain the benefits of such emergency cover.

Asked if the recent increase in strong rhetoric from both Iran and the US was making insurance firms in the Gulf nervous, Bseisu said such events were not unusual.

"I don't think it is a nervous time, I think it is a time for everyone just to be aware of what is out there and to try to make sure they are adequately covered and protected.

"I don't think there has been any heightening of tension in the last few months over and above anything that has gone before.

"It is just important for people to know that this kind of special coverage exist and that they need to protect themselves from a bigger claim going forward. I think by and large in Bahrain people and insurance companies have that awareness," he said.

AWRIS is the only pan-Arab syndicate specialising in war risk insurance, with a membership of around 145 insurance companies.

Formed as a reaction to the Iran-Iraq war in the 1980s, the syndicate allows its members to take out cover on ship hulls, cargo and aircraft among other items on case by case basis.

"AWRIS has played a big role in past years in really mitigating these risks for the Arab insurers," Bseisu said.

He added that any increase in tensions in the region was sure to see insurance firms look to take out cover in the areas in which AWRIS specialises.

"As tensions increase demand for such coverage increases - there's no doubt about it.

"However, demand has been pretty much constant - just like the financial markets the insurance markets have matured enough to absorb more.

"So the tensions have been pretty much at a reasonable level and they are all priced into the products."

"I think the issue is to make sure you have adequate insurance at all times - insurance is protection and at the end of the day you only feel it when you need it.

"Many people try to cut corners trying to save here and there but then something happens and you end up with nothing," he said. - TradeArabia News Service