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Kuwait Insurance Report Q3 2010
Business Monitor International, July 2010, Pages: 73
The Kuwait Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's insurance industry.
Kuwait’s insurance sector is one in which much needs to change if the country is to shake its status as something of a backwater. As BMI’s discussion on the economic and political outlook makes clear, progress towards economic reform and liberalisation continues at a slow pace, at a time when inwards investment has been constrained by a challenging political environment. This is evidently not a market in which foreign insurers have felt the need for a lowering of barriers to entry.
Nor is it clear that there would be much opportunity for them if they did. The larger listed Kuwaiti insurance companies have published their results for the nine months to the end of 2009. We continue to look for overall growth in premiums last year of around 5%. Virtually all of the absolute growth in premiums was accounted for by market leader Gulf Insurance. Al Ahleia Insurance reported a significant decline in both gross and net premiums and total assets. As a result of our methodology – which assumes a steady increase in non-life penetration (i.e. premiums as a percentage of GDP), we are currently looking for accelerating in growth from 2010. However, we recognise that we may yet have to lower our forecasts. Other than those mentioned, the main operators in Kuwait are, similarly, locally owned and listed organisations that are small by anything other than local standards. Examples include Kuwait Insurance, Kuwait Re, Warba Insurance, Wethaq Takaful and First Takaful.
As is the case in several other Middle Eastern countries, the level of development of the life segment is embryonic. This may be because the government makes extensive social security benefits available to its citizens and it is not clear what will be a catalyst for this to change.
In this report, we also continue to provide a breakdown of the insurance sector by line – from the point of view of the regulator or trade association. In Kuwait, comprehensive motor insurance (presumably compulsory motor third party liability) was the largest line in the non-life segment, accounting for just under half of gross written premiums. Other major lines included life and health, marine aviation and transport, and property and fire insurance.
At the time of writing in mid 2010, we have been able to ensure that the report includes actual data for 2008. We have generally been able to use data that was published during 2009 to adjust our forecasts for the year as a whole. We have also extended our forecasts to 2014. We expect total premiums of KWD185mn in 2009, which comprises non-life premiums of KWD143mn and life premiums of KWD42mn. In 2014, the corresponding figures should be KWD382mn KWD318mn and KWD64mn respectively. In terms of the key drivers that underpin our forecasts, we expect non-life penetration to rise from 0.47% in 2009 to 0.65% in 2014, and for life density per capita to rise from US$46 to US$67. BMI’s Insurance Business Environment Rating for Kuwait is 44.8
Issues To Watch
In spite of the general underdevelopment of its insurance sector, Kuwait stands out for the significance – in a local context – of its takaful operators. In the event that official resources are mobilised to promote Islamic finance, this sub-segment could grow rapidly.
The growth prospects of the Kuwaiti insurers are constrained by the small actual (and potential) absolute size of the market. In many cases, it is difficult for them to increase their market shares within Kuwait.
There is no sign of a catalyst for development of the life segment. The obvious solution is to underwrite risks outside Kuwait – and/or to expand by way of acquisition.
Table: Overview Of Kuwait’s Insurance Sector
Key Insights On Kuwait’s Insurance Sector
Issues To Watch
Kuwait Insurance SWOT
Kuwait Political SWOT
Kuwait Economic SWOT
Kuwait Business Environment SWOT
MetLife’s Acquisition Of ALICO
Table: ALICO At A Glance
Table: ALICO’s Pre-Tax Profits By Segment And Region Contribution, Year To November 30 2009 (%)
Table: ALICO – A Market Leader In Japan
Table: MetLife's Acquisition Of ALICO
Table: MetLife And ALICO Combined
Middle East And North Africa Overview
Islamic Insurance Overview
Projections and Forecasts
Table: Insurance Premiums, 2007-2014
Projections And Drivers Of Growth
Table: Growth Drivers, 2007-2014
Table: Kuwait – Economic Activity, 2007-2014
Domestic Political Outlook
Table: Kuwait Insurance Business Environment Indicators
Table: Middle East And Africa Insurance Business Environment Ratings
Table: Non-Life Premiums In A Regional Context, 2008
Table: Life Premiums In A Regional Context, 2008
Major Players In Kuwait’s Insurance Sector
Table: Premiums, 2008 (KWDmn)
Table: Total Premiums, January-September 2008 And 2009 (KWDmn)
Analysis Of Regional Competitive Conditions
Table: Listed Middle Eastern Insurance Companies. Net Premiums, Net Profit And Long Term Assets, 2003-2008 (US$mn)
Selected Company Profiles
Local Company Profiles
First Takaful Insurance Company
Gulf Insurance Company
Kuwait Insurance Company
Warba Insurance Company
Selected Regional Company Profiles
Zurich Financial Services
Country Snapshot: Kuwait Demographic Data
Section 1: Population
Demographic Indicators, 2005-2030
Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Employment Indicators, 1997-2006
Consumer Expenditure, 2000-2012
- First Takaful Insurance Company
- Gulf Insurance Company
- Kuwait Insurance Company
- Warba Insurance Company
- HSBC Insurance
- Zurich Financial Services
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