Boston, MA -- (SBWIRE) -- 05/02/2014 -- As of early 2014, the main impression given by Kuwait's (overwhelmingly non-life) insurance sector remains one of stagnation. However, rapid growth in health insurance premiums should underpin a strong expansion in the non-life segment during the forecast period.
BMI's new insurance report format provides forecasts of the life and non-life markets, including gross and net premiums, reinsurance premiums and assets. Moreover, it provides forecasts for key growth drivers such as vehicle fleet size, demographic factors and private health expenditure. The report also contains a comprehensive breakdown of the non-life insurance market, providing forecasts for motor and transport insurance, property, personal accident, health, general liability and credit insurance. Finally, the new report offers a detailed breakdown of the life and non-life competitive landscapes, covering the top companies present in each segment by premiums and market share.
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In theory, Kuwait should be home to one of the Middle East's leading insurance sectors. Thanks to energy exports, the economy has consistently performed well and local insurance companies are well established. Kuwait is also the base for very substantial and innovative shari'a-compliant financial institutions. The Kuwait Investment Authority is one of the major shareholders in Arig, one of the leading regional reinsurance companies.
In reality, though, the general picture of the sector in early 2014 remains a depressing one of continuing stagnation. Even by the undemanding standards of the Middle East and North Africa (MENA) region, nonlife penetration is low and barely rising. The results of Gulf Insurance, which accounts for roughly half of all activity in the entire sector, have been consistent with an uninspiring picture. For a long time, Gulf Insurance has been focusing on opportunities outside Kuwait. Whether it signs a major regional bancassurance deal remains to be seen.
The most likely catalyst for change appears to be rapid growth in health insurance premiums. We think that this sub-sector will expand at double-digit rates for much of the forecast period, thanks to the expansion of private healthcare in Kuwait. Other sub-sectors within the non-life segment will likely develop quite slowly. Life insurance does exist in Kuwait: however, in a country that has a very comprehensive and generous social security system, life density, too, remains at extremely low levels.
Unlike its counterparts in Bahrain, Qatar and the UAE, the government is not actively seeking to promote the development of financial services. Meanwhile, the insurance companies are small even by the standards of the Middle East. Kuwait's 12 or so takaful operators, which account for about one fifth of the activity in the sector (in terms of premiums/contributions), are tiny.
Key BMI Forecasts
- In 2014, total premiums should rise by 9.0% to US$1.2bn.
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