Qatar insurance sector sees 18% growth: OBG
Doha – Qatar’s insurance sector is expected to grow at a rate of almost 18 percent till 2020, the Oxford Business Group (OBG) has said in its latest annual report on Qatar.
Citing forecasts by Alpen Capital, the OBG report said Qatar’s insurance market is expected to increase at a compound annual growth rate (CAGR) of 17.8 percent till 2020, making it the fastest-growing insurance market in the GCC by current estimates.
Between 2005 and the end of 2015 the insurance industry posted a CAGR of 21 percent, the report said, adding that Qatar was the third-largest insurance market in the region by the end of 2014 accounting for 10 percent of premiums written in the GCC.
The GCC is one of the fastest-growing insurance regions in the world with gross written premiums (GWPs) reaching $22.2 billion in 2014, a CAGR of 13.8 percent since 2010, when premiums came in at $13.3 billion.
The rapid expansion of Qatar’s insurance industry has resulted in the country taking a steadily expanding share of the regional market, equal to around 10 percent in 2014, up from 7.5 percent in 2010.
According to the report, Qatar’s insurance companies pulled in GWPs worth $2.2 billion, up from $2 billion in 2013, $1.3 billion in 2012, $1.1 billion in 2011 and around $900 million in 2010.
The jump in GWPs over the past five years took place almost entirely in non-life business lines. In 2014, non-life coverage brought in $2.1 billion in premiums, while the life product accounted for just $0.1 billion.
Providing insights on the growth of Takaful (Islamic insurance), the report said that it has taken off in Qatar in recent years, as it has across the region. As of 2014, Qatar was the third largest Takaful market in the GCC region.
Like many of its GCC neighbours, Qatar’s industry ceded a considerable percentage of GWPs to the reinsurance sector due to lack of capacity both in terms of human resources and capital.
Increased reliance on reinsurance in recent years has prompted some local companies to set up reinsurance entities of their own.
Given that insurance growth tends to track overall economic growth, the report said, the recent jump in insurance activity will likely continue at least until 2022 when Qatar is scheduled to host the Fifa World Cup.
“There is a huge amount of potential still across a number of segments, from engineering to fire and safety to various retail products,” SEIB Insurance and Reinsurance COO and Deputy CEO Elias Chedid told OBG.
“Given recent regulatory changes and Qatar’s ongoing population growth, we are optimistic about the future,” Chedid said.