14/03/2016 07:42 AST
Qatar’s Insurance premium reached $2bn in 2015, registering 11 percent compound annual growth rate since 2007. Qatar’s insurance sector, along with Middle East and North Africa (Mena) region, is expected to remain resilient in coming years despite economic headwinds, according to ‘Mena Insurance Barometer 2016’ released yesterday.
“Since inception of Multaqa, market values almost tripled to $2bn, a compound annual growth rate of 11 percent,” said Yousef Mohamed Al Jaida, Chief Executive Officer of the Qatar Financial Centre (QFC) while releasing the findings ‘Mena Insurance Barometer 2016’.
Multaqa Qatar is the region’s leading risk and insurance annual forum organised by the Qatar Central Bank, QFC and Global Reinsurance.
Jaida said that Qatar’s insurance market offers huge potential to grow for private sector as insurance penetration is less compared to other countries. “Most of the market potential remains untapped. Insurance premium (in Qatar) accounts for just 1 percent of Qatar’s gross domestic product (GDP). The global average is 6 percent,” he added.
The Mena Insurance Barometer is an annual survey based on in-depth interviews. In 2016, senior executives of 36 regional and international re/insurance companies, intermediaries and trade associations operating in the region were interviewed.
“On the back of the sector’s above-average growth performance, insurance is set to further increase its share in Mena economies. This is the main finding of the most recent edition of the Mena Insurance Barometer, which we have been publishing since 2013,” said Al Jaida. “A greater role of insurance in absorbing and transferring risk is a welcome development. It generally goes hand in hand with more risk-conscious behaviour of individuals and companies as well as deeper and broader domestic capital markets,” he said.
The 2016 edition showed that between 2009 and 2014 the region’s total non-life and life insurance premium volume expanded from about $32bn to more than $51bn. Growth is driven by the low insurance penetration in the region, with premiums accounting for just 1.5 percent of GDP in 2014, less than a quarter of the global average. However, as the region’s governments introduce compulsory insurance schemes in motor and healthcare, the gap is slowly narrowing. From 2009 to 2014 Mena insurance markets have expanded more than twice as fast as the region’s economies. “Insurance remains relatively resilient to the economic slowdown that means majority of executive polled expect insurance to grow faster than underlying economies” said Dr Kai Uwe Schanz, Chairman & Principal Partner at Dr Schanz, Alms & Company.
According to the survey, slowing economic growth and continued geopolitical instability weigh on executive sentiment in the Mena insurance markets. However, the industry is believed to remain resilient, with 61 percent of executives polled expecting regional premiums to outgrow GDP. Survey participants continue to be particularly bullish about personal lines business which benefits from additional compulsory insurance requirements as well as corrective pricing and reserving measures. However, as a result of economic headwinds and fiscal tightening, the outlook for commercial lines such as marine and engineering has deteriorated.
Respondents considered the region’s strong direct insurance market growth as its most important current strength, followed by a relatively moderate natural catastrophe exposure and continued government spending on construction and infrastructure.
The Peninsula
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