Qatar: P&C premiums forecast to grow by 10% in 2017-18
Source: Middle East Insurance Review | Jun 2017
Gross premiums in the Qatari P&C sector are forecast to grow by up to 10% annually over the next two years, according to S&P Global Ratings.
Growth will be driven mainly by infrastructure spending related to the 2022 FIFA World Cup and the planned introduction of mandatory medical insurance for Qatari nationals this year and for expatriates in 2018.
The non-life sector continues to be broadly profitable, noted S&P. It estimated the average return on equity of insurers to be around 15% for the 2012-16 period, supported by elevated commission income from ceded reinsurance business and by relatively high returns, mainly from real estate investments.
Barriers to entry to the Qatari non-life market are relatively high due to the dominance of the six largest non-life insurers that generate more than 80% of gross premiums in the market, according to the ratings agency.
The overall risk level of the P&C insurance sector in Qatar has also been assessed as “intermediate” by S&P. The assessment is derived from an “intermediate” country risk and a “low” industry risk for the domestic P&C insurance sector. The risk scale ranges from “low”, “intermediate”, “moderate” to “high”.
The “intermediate” country risk reflects Qatar’s high economic wealth amid limited monetary flexibility and weak public institutions, said the agency. It projects real GDP growth to exceed 3% annually during the 2017-19 period, which would sustain growth in the P&C sector through new insurance opportunities. M