DOHA: The size of Qatar’s insurance market is picking up, though slowly, and has hit an estimated $2bn. This represents one percent of the country’s GDP and 4 percent of the total value of insurance market in the Mena region, Yousuf Mohammed Al Jaida, Deputy CEO, Qatar Financial Centre (QFC) Authority, said here the other day.
Talking to the media here, Al Jaida said the Qatar Central Bank (QCB) is expected to come out with fresh administrative regulations for insurance companies soon.
Citing key finding in QFC Authority’s 3rd Annual Mena Insurance Barometer released yesterday to mark the annual two-day MultaQa Qatar conference, Al Jaida said confidence prevails in the Mena insurance markets as insurers expect regional premiums to outgrow GDP and rates to finally stabilise or even start rising.
While the region’s average income per capita is similar to the global level, insurance penetration remains extraordinarily low, with premiums accounting for a mere 1.3 percent of GDP, a fifth of the global average. This gap is narrowing, however, as Mena insurance markets outpace regional GDP growth.
Between 2008 and 2013, total non-life and life insurance premium volumes in the region expanded from about $30bn to more than $50bn. Going forward, Swiss Re expects premiums to grow at an inflation-adjusted 5.5 percent for 2015 to 2016, higher than the International Monetary Fund’s economic growth forecast for the region.
Akshay Ranadeva, Strategic Development Director, QFC Authority, said the Mena Insurance Barometer shows that the region’s strong fundamentals remain intact. Insurance penetration is on the rise, demographics are favourable, and the ability of most Gulf countries to withstand short-term volatility in oil pricing is strong.
The executives polled in the Mena Insurance Barometer see the region’s strong economic and direct insurance market growth as its most important current strength, followed by a massive pipeline of major infrastructure and construction projects and a relatively moderate natural catastrophe exposure.
The Barometer found that 86 percent and 34 percent of executives polled view current prices in Mena commercial and personal lines business, respectively, as being below the average of the past five years. 81 percent and 89 percent, respectively, expect commercial and personal lines rates to remain stable or improve over the next 12 months, very similar to last year.
However, in commercial and personal lines the share of those expecting rate increases has grown from 19 percent to 30 percent and 21 percent to 37 percent, respectively. Rate expectations remain moderately positive as prices appear to have hit bottom and regulators continue to take supportive action.
