Qatar’s GWP is expected to grow by more than 9% a year to reach US$4.6 billion by 2021, compared to the estimated $3.1 billion in 2017 and $2.9 billion in 2016, as the rising population continues to drive the demand for health, motor, property and other retail cover, while strategic economic diversification plans help enhance the base of assets available for underwriting, according to a report by Alpen Capital.
The projected growth is slower than the historic five-year growth rate as well as the projections in Alpen Capital’s previous insurance report. This is in view of the ongoing diplomatic tensions between Qatar and three other GCC members, leading to the imposition of economic sanctions and withdrawal of investments from the domestic market. Moreover, intense competition and low demand in motor, the largest insurance line, is likely to constrain growth.
Despite the challenges, Qatar, backed by the world’s largest natural gas reserves, is investing heavily in infrastructure projects to diversify its economy and host the 2022 FIFA World Cup. This is likely to expand the underwriting base for commercial lines.
The report also said that insurance market growth is driven by an increasing number of expatriate workers moving into the country for job prospects, forecasting the total population to reach 2.8 million by 2021. There are currently around 2.6 million people in the country.
With the IMF projecting Qatar’s GDP per capita to increase at a CAGR of 5.4% between 2016 and 2021, the report said efforts to diversify revenue and a gradual recovery in oil prices are likely to result in an increase in disposable income of one of the world’s wealthiest countries. “This will add to the demand for general insurance products,” it added.
Qatar’s GDP growth rate (at current prices), estimated to have fallen to 5.4% in 2016, is slated to be 6.8% in 2017 and forecast at 6.5% by 2021; while GDP per capita (at current prices) is forecast to be $59,513, $60,812 and $77,311 in 2016, 2017 and 2021, respectively.
The report said the country’s insurance penetration and density are expected to be 2.1% and $1,628 by 2021 compared to 1.9% and $1,146 respectively in 2017. M