Kuwait: Life market faces lack of expertise and other challenges
Source: Middle East Insurance Review | Feb 2019
The life insurance market in Kuwait is weak in creating products that meet the needs of customers and lacks experience in developing the market, according to Mr Sami Sharif, actuary and CEO of Kuwait Insurance Company.
Annual life premiums in Kuwait represent not more than 2% of the total yearly premiums received by the overall insurance industry, Mr Sharif told Al Qabas. “This proportion is very small if we compare it to those of other countries in the region. In Lebanon, it is 30%, in Egypt, 40% and in the UAE, 25%.”
Although there are 38 licensed insurers in Kuwait, the number of insurers active in individual life insurance is less than five.
He cited three main reasons for the anaemic life insurance market in Kuwait. These are:
- Lack of insurance products that meet needs
People need protection against loss of income, death or total disability due to accident or illness. They also see the need for adequate income after retirement, on top of the need to cover the costs of their children’s education and marriage.
Although local insurers are able to compete with foreign companies in the field of general insurance, in life insurance, foreign companies dominate the Arab markets, including that in Kuwait. This is because experience is lacking in the Arab region.
- Lack of distribution networks
The success of individual life insurers depends on the availability of distribution networks to market products. The production team also requires special and deep expertise that is not available in local insurers. Banks have been prevented from operating bancassurance. The other distribution networks for life insurance are almost non-existent or not active. In Kuwait which has a population of over 4m, there are around 2,000 individual life insurance agents. M