A new report reveals the Qatar insurance industry has enjoyed ‘boom times’ in the last five years, with an annual average growth rate of 11.3 percent between 2008 and 2012.
Boosted by strong economic progress, heavy investment in infrastructure development and an increasing population of the oil-rich Gulf state, the insurance sector has reached USD 1.3 billion. The figures point towards remarkable development, as until 2006, Qatar’s insurance sector was only behind Kuwait in terms of total gross written premiums (GWP). The tiny state has also introduced compulsory insurance regulations to support the continued growth of insurance industry.
The Alpen Capital report shows that Qatar’s insurance penetration was 0.7 percent in 2012. The penetration ratio has dropped significantly since 2009 as the overall GDP has grown at a much faster pace compared to the expansion of insurance industry. The industry has also evolved rapidly in these last few years and now life insurance market forms an attractive market size. In sharp contrast to the GCC market, Qatar had the second-lowest density in the life insurance segment in 2012, but was placed second in the non-life insurance density.
The government of Qatar has also made changes to the local laws to promote the development of country’s insurance sector. Implemented in 2012, new laws have given all regulatory powers to the Qatar Central Bank. Previous laws barred foreign participation in the country’s insurance sector and only allowed a national insurer to insure properties within Qatar.
As Qatar steps into the modern era and health concerns of the nation remain a focal point, the health insurance sector is expected to see consistent growth in the coming years. Bothered by the changing disease profile in the state and a high incidence of lifestyle induced diseases, Qatar’s government has introduced a compulsory medical insurance program in the country.
The energy, marine and construction sectors also provide the insurance sector a significant opportunity to expand in the future. With only 27 licensed insurance and reinsurance companies in the country, insurers are likely to be locked in stiff competition with each other.