Total insurance premiums in Kuwait are forecast to rise by 30% during the current year on the back of growth in medical insurance business.
The Ministry of Health (MoH) has announced plans to require foreign visitors and workers, numbering around 3 million, to purchase local health insurance policies that would give them access to expat-only hospitals and clinics. In addition, in the second half of last year, the Ministry awarded a health insurance contract worth KWD82 million for a year, covering 107,000 retirees registered in the social insurance system.
In the short term, however, the profitability of Kuwaiti insurers might be affected because some insurance companies might not have sufficient data to price the new business appropriately, reported El Methaq citing insurance industry sources.
Other challenges facing the insurance industry include an outdated insurance law which dates to 1961. Insurers are calling for a review of tariff rates, some of which have remained unchanged for years. In particular, there are demands for changes to motor third-party liability insurance tariffs, with insurers burdened by increases in the cost of motor spare parts and repairs as well as huge compensations awarded by the courts.
Direct premiums written in the domestic insurance market rose by 7.4%, reaching about KWD347 million (US$1.143 billion) last year, compared with KWD323 million in 2015. Compensation claims rose by 4.1% to KWD222 million last year compared to KWD213 million in 2015.