DOHA: Qatar insurance market is expected to maintain its growth momentum, with a number of factors helping to weather the impact from a depressed oil price. Qatar is the third-largest and one of the fastest growing insurance markets in the Gulf Cooperation Council (GCC), expanding at a compound annual growth rate of 21 percent over the past ten years, Moody’s Investors Service noted yesterday.
“We expect the strong competition to ease off somewhat over the next few years thanks to the opportunities for growth in the market driven by the infrastructure projects catering to the 2022 FIFA World Cup. In addition the motor and medical lines growth will cushion the effects that depressed oil price may have on some energy projects”, said Mohammed Ali Londe, Moody’s Assistant Vice President and Analyst.
Underwriting profitability for the top six players increased marginally in 2015, with the average combined ratio, a yardstick measuring claims and costs as a proportion of premiums, improving to 97 percent in 2015 from 98 percent in 2014 despite their rapid growth rate of around 28 percent in 2015.
Moody’s notes that growth factors for the Qatar insurance market include the government’s substantial focus on infrastructure development, including projects to cater for the 2022 FIFA World Cup, and rapid population growth, which has more than doubled since 2006. The advent of motor insurance (third-party) and health insurance becoming compulsory have also spurred the insurance market’s expansion. However, despite this rapid pace of growth, Qatar has one of the lowest insurance penetration rates in the region at 1 percent of GDP, significantly below those of most advanced economies, and an insurance density (which implies the per capita $ spend on insurance) of $979. This implies that there is room for significant further uplift within the Qatari insurance market.The Peninsula
