Kuwait Insurance Report Q3 2012

Date: July 10, 2012
Pages: 59
US$ 1,175.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: K85DE319F71EN

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Includes 3 FREE quarterly updates

The Kuwait Insurance Report considers the prospects for both life and non-life insurers in the country. 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 over the long-term. The 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, the leading regional reinsurance company.

In reality, though, the general picture of the sector in mid-2012 is a very depressing one of continuing stagnation. Even by the depressed standards of the Middle East and North Africa (MENA) region, nonlife penetration is low and, indeed, appears to have fallen quite sharply in 2011. In their latest results, some companies have reported stable premiums, while others suggest that their business has actually shrunk. In April 2012, Gulf Insurance, which accounts for roughly half of all activity in the entire insurance sector, noted that it is looking for gross written premiums to rise by 4% this calendar year. 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.

We are presently unable to see an obvious catalyst – such as new laws that make private health insurance compulsory – which could cause the growth rate to increase significantly. This is an important way in which Kuwait’s insurance sector differs from its counterparts in other Gulf Cooperation Council (GCC) countries. 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 – although the Minister of Commerce and Industry announced in October 2011 that she would, in the near future, issue a directive in relation to the regulation of the (re)insurance companies and the insurance brokers operating in Kuwait. As far as we can see, though, the new law – to replace the present outdated legislation – has yet to be passed by Kuwait’s parliament.

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.

Over the last quarter, BMI has made the following changes:
  • The analysis incorporates BMI’s latest forecasts for Kuwait’s economy, including details in relation to auto sales and trends in the healthcare sector.
  • The analysis incorporates the latest comments on developments of Gulf Insurance, as well as data pertaining from Ernst & Young’s World Takaful Report, which was published in Q212.
Executive Summary
  Table: Total Premiums, 2009-2016
Key Insights And Key Risks
SWOT Analysis
Kuwait Insurance Industry SWOT
Kuwait Political SWOT
Kuwait Economic SWOT
Kuwait Business Environment SWOT
Life Sector
Middle East Life Sector Overview
  Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn)
Kuwait Life Sector Update
Life Insurance Industry Forecast Scenario
  Table: Life Premiums, 2009-2016
Growth Drivers And Risk Management Projections
  Table: Insurance Key Drivers, Demographics, 2009-2016
Non-Life Sector
Middle East Non-Life Sector Overview
  Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn)
Kuwait Non-Life Sector Update
Non-Life Insurance Industry Forecast Scenario
  Table: Non-Life Premiums, 2009-2016
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
  Table: Kuwait Economic Activity, 2011-2016
Political Stability Outlook
  Table: Middle East And Africa Defence And Security Ratings
Healthcare Insurance
  Table: Insurance Key Drivers, Disability-Adjusted Life Years 2009-2016
Islamic Finance
Insurance Risk/Reward Ratings
  Table: Kuwait’s Insurance Risk/Reward Ratings
  Table: Middle East And Africa Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In Kuwait’s Insurance Sector
  Table: Kuwait’s Insurance Sector At A Glance, 2009-2010
Company Profiles
Local Company Profiles
First Takaful Insurance Company
Gulf Insurance Company
Kuwait Insurance Company
Warba Insurance Company
Regional Company Profiles
Arab Insurance Group (ARIG)
Demographic Outlook
  Table: Kuwait’s Population By Age Group, 1990-2020 (‘000)
  Table: Kuwait’s Population By Age Group, 1990-2020 (% of total)
  Table: Kuwait’s Key Population Ratios, 1990-2020
  Table: Kuwait’s Rural And Urban Population, 1990-2020
BMI Methodology
Insurance Risk/Reward Ratings
  Table: Insurance Risk/Reward Indicators And Rationale
  Table: Weighting Of Indicators
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