Kuwait: Positive growth expected for insurance market - BMI
Source: Middle East Insurance Review | Oct 2015
Life premiums in Kuwait are expected to amount to US$310 million with non-life premiums reaching $820 million this year, resulting in total premiums of $1.13 billion, compared to $1.01 billion in 2014, said a report by BMI Research.
The report notes that Kuwait’s insurance market is highly fragmented, with a large number of firms competing for a small premium base. A lack of sufficient regulatory oversight has created an uncertain operating environment.
However, BMI added: “We do expect to see positive growth in the insurance industry by the end of the current forecast period in 2019, with the larger non-life sector continuously outpacing growth in the minute life insurance segment.”
The takaful sector, while highly promising, is also struggling to generate growth, and new regulatory requirements could result in consolidation among the smaller firms, which cannot meet capitalisation demands.
There are some positive growth prospects for the medium- to long-term outlook. Kuwait’s national development plan, Vision 2035, entails about $100 billion in public investments and provides considerable scope for expansion of non-life lines such as engineering and construction related cover. The growth of the expatriate community will also drive greater demand for life products, such as retirement savings plans, while general economic growth and rising rates of private financial consumption will support growth of non-life lines such as motor insurance.