Palestine's Insurance Sector: A Key Pillar for Economic Resilience and Risk Management
In an interview with Voice of Palestine Radio, Mr. Anwar Al-Shanti, Chairman of the Board of the Palestinian Federation of Insurance Companies, affirmed that the insurance industry is one of the fundamental pillars of any economy. By providing financial protection for individuals, families, and property against financial risks, the sector plays a vital role in ensuring economic continuity and promoting sustainable development.
Al-Shanti explained that the global insurance industry contributes approximately 7% of global GDP, equivalent to nearly US$8 trillion out of a global economy estimated at US$120 trillion. This highlights the importance of insurance as one of the world's key financial sectors.
He noted that, despite being relatively young, Palestine's insurance sector has experienced significant growth over the past years. The sector currently consists of 12 insurance companies, including six commercial insurers, four Takaful (Islamic insurance) companies, and two inactive companies. It employs more than 2,500 people, in addition to around 250 insurance agents and their staff, while offering more than 400 insurance products. Annual insurance premiums currently stand at approximately US$400 million, with the industry's aspiration to reach US$1 billion in the future.
Al-Shanti added that the sector faces considerable challenges due to the political and economic conditions in Palestine. These include disruptions to imports and exports, the clearance revenue crisis, the suspension of international development projects, rising unemployment, and delays in salary payments. These factors have had a direct impact on the national economy and on citizens' ability to obtain insurance coverage.
He stressed that the Palestinian people continue to demonstrate resilience despite these challenges, with all segments of society working to sustain daily life and contribute to building a state capable of achieving development and stability.
Regarding questions about the possibility of offering insurance against settler attacks, Al-Shanti explained that, in principle, insurance can cover virtually any type of risk. However, risks of this nature require reinsurance from international reinsurance companies, which depends on having a sufficiently large pool of policyholders as well as strong financial capacity to absorb such risks.
He also noted that one Palestinian insurance company had previously introduced an insurance product covering damages resulting from settler attacks. However, demand for the product was limited. He emphasized that settler attacks are only one aspect of the broader challenge posed by the Israeli occupation.
On the importance of insurance awareness, Al-Shanti stressed that financial capacity is the key prerequisite for purchasing insurance coverage and benefiting from its protection. He noted that insurance awareness among Palestinians is relatively good compared with several Arab countries. Nevertheless, the sector's growth also depends on a stable economic environment, increased investment, and development projects that stimulate demand for insurance services.
He pointed out that annual insurance premiums in Jordan are approaching US$900 million, while in Saudi Arabia and the United Arab Emirates they reach approximately US$20 billion. He concluded by stating that the Palestinian insurance sector aspires to strengthen the country's economic capabilities, expand investment and development projects, and transform these aspirations into tangible progress that supports economic growth and enhances financial protection for citizens.
