Kuwait: Single party with stakes in multiple insurers may limit competition

Source: Middle East Insurance Review | Nov 2021

Kuwait’s Competition Protection Agency (CPA) said that there are instances of shareholders of an insurance entity holding stakes in other insurance companies and such holdings might harm competition in the insurance market. The lack of transparency and inappropriate administrative practices help spawn such behaviour.

In a report, the CPA said that restrictions on the same shareholder owning stakes in more than one insurance company at one time could be introduced to counter the problem. One suggestion is to limit the stakes owned to only 10% in cases where the insurance companies invested in by the same shareholder operate in the same class of business, reported Al Rai.

The report said complaints have been lodged about excessively low prices in the motor TPL insurance business, with a focus on intermediaries that have strong relationships with insurance companies. Such intermediaries sell insurance policies of connected insurance companies at discounted prices even after adding the commission. One suggestion was to set a floor for motor premiums to reduce such behaviour. M

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