Kuwait: Insurers push for 400% rise in third-party auto tariffs
Source: Middle East Insurance Review | Sep 2017
Kuwaiti insurers are lobbying the government to raise third-party motor insurance premiums by 400% from current levels, which have been in place for more than 55 years since the insurance law was enacted in 1961.
Governmental sources told Al-Anba that the appeal from insurers followed a 40% fall in operating profits last year, with some motor insurers even posting losses. Total claims, underwriting expenses and other expenses increased by 60% during the past six months, according to the statistics from the Kuwait Insurance Federation.
Data from Mubasher show that the profits of three insurers, out of seven listed on the stock exchange, fell by 12.1% to KWD7.46 million (US$24.7 million) for the first half of this year. The three insurers are First Takaful, Wethaq and Gulf Insurance. Last year, the sector’s net profit declined by 30% to KWD24.6 million.
At the end of the first quarter of 2017, the Kuwait Insurance Federation called for the amendment of laws and regulations governing the insurance sector.
At present, four insurers in Kuwait control 65% of the market premiums and achieve operating profits. The remaining 28 companies compete for 35% of the market share, creating negative competition among them and pushing them to engage in price wars. M
KWD1 = US$3.31