Rapid economic growth, ongoing infrastructure projects and improved geopolitical conditions are expected to fuel the growth of Qatar’s insurance market at a CAGR of 4.8% from $2.0bn in 2023 to $2.5bn in 2028, says UAE-based Alpen Capital in its latest “GCC Insurance Industry” report released last week.
Qatar’s insurance penetration is projected to remain consistent at 0.9%, while density is expected to increase at a CAGR of 4.2%, reaching $851.4 by 2028.
In particular, the dominant non-life segment is estimated to grow at a CAGR of 4.9% to reach $2.5bn by 2028.
The upcoming World Aquatics Championship 2024 in Doha is expected to increase demand for various insurance segments such as health, travel, and liability insurance.
Qatar received over 4m visitors in 2023 who were required to have a health insurance policy, helping the segment grow.
The country’s insurance industry will be expanding its product offerings, including the launch of climate insurance and tailored services for key sectors. It will further expand the range of insurable risks, focusing on local market development through insurance products, according to Qatar’s Third Financial Sector Strategy issued by Qatar Central Bank.
The extension in May 2022 of the mandatory health insurance scheme to visitors and expatriates is expected to have a positive impact on the industry’s penetration rate and profitability. Similarly, Qatar’s focus on industrial diversification and economic transformation will create new opportunities for growth, including increased demand for cyber insurance and higher adoption of export insurance.
To sum up, the key growth drivers are:
- High Per Capita Income: Boasting the highest GDP per capita in the GCC, Qatar anticipates a CAGR of 4.0% in GDP per capita from 2023 to 2028. This economic strength is expected to enhance the capacity and inclination of individuals and businesses to invest in insurance products, potentially increasing the demand for insurance products.
- Economic Diversification: Qatar’s economic diversification strategy includes strategic initiatives such as prioritising investments in food security, attracting foreign direct investment, and supporting skilled talent. These economic diversification measures are expected to boost demand for specialised insurance products, driving growth in the local insurance industry.
- Infrastructure Development: After experiencing a moderation following the 2022 FIFA World Cup, the construction sector in Qatar regained momentum in 2023, aligning with the goals of National Vision 2030. Ongoing projects such as the development of Hamad General Hospital, Madinat KhalifaHealth Centre, and the veterinary laboratory building of the Ministry of Municipality are anticipated to drive demand for property, health, and liability insurance.
The life insurance segment is anticipated to expand at a CAGR of 2.7% during the forecast period. This growth is primarily attributed to rising awareness among the local population and a steady increase in population.
The slower development of the life segment is attributed to limited awareness of life insurance benefits, though this is changing as numerous Qatari labour-focused companies now provide group life insurance to address work-related accidents.
Qatar’s insurance market reached a total GWP of $1.8bn in 2022 demonstrating a CAGR of 4.1% from $1.4bn in 2017. The non-life insurance market accounted for 97.2% of the total GWP in 2022. M