Kuwait Insurance Report Q1 2012

In theory, Kuwait should be home to one of the Middle East’s leading insurance sectors. Thanks to energy exports, the economy has consistently performed well over the long-term. The local insurance companies are well established. Kuwait is also the base for very substantial and innovative shari’a-compliant financial institutions. The Kuwait Investment Authority is one of the major shareholders in ARIG, the leading regional reinsurance company.
In practice, the general picture of the sector as at the end of 2011 is a profoundly depressing one of ongoing stagnation. Non-life penetration remains stuck at a level that is low even by the standards of the Middle East. As is not the case in other Gulf Cooperation Council (GCC) countries, there is no obvious catalyst – such as the arrival of compulsory and universal health insurance – why this should change. In a country with a very comprehensive – and generous – social security system, life density remains minimal.
Unlike its counterparts in Bahrain, Qatar and the UAE, the government is not actively seeking to promote the development of financial services – although the Minister of Commerce and Industry announced in October 2011 that she would, in the near future, issue a directive in relation to the regulation of the (re)insurance companies and the insurance brokers operating in Kuwait. As far as we can see, though, the new law – to replace the outdated legislation that has governed the sector since the early – has yet to be passed by Kuwait’s parliament.
Meanwhile, the insurance companies are small even by the standards of the Middle East. Kuwait’s 12 or so takaful operators, which account for about one fifth of the activity in the sector (in terms of premiums/contributions) are tiny. Gulf Insurance, by far the largest insurance company in Kuwait, has long been pursuing opportunities in other countries in the Middle East and North Africa rather than at home.

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Executive Summary 5
Table: Total Premiums 2008-2016 5
Key Insights And Key Risks 5
SWOT Analysis 7
Kuwait Insurance Industry SWOT 7
Kuwait Political SWOT 8
Kuwait Economic SWOT 8
Kuwait Business Environment SWOT 9
Life Sector 10
Middle East Life Sector Overview 10
Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn) 10
Kuwait Life Sector Update 12
Life Insurance Industry Forecast Scenario 13
Table: Total Life Premiums 2008-2016 13
Growth Drivers And Risk Management Projections 14
Population 14
Table: Insurance Key Drivers, Demographics 2008-2016 14
Non-Life Sector 17
Middle East Non-Life Sector Overview 17
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn) 17
Kuwait Non-Life Sector Update 20
Non-Life Insurance Industry Forecast Scenario 22
Table: Total Non-Life Premiums 2008-2016 22
Growth Drivers And Risk Management Projections 23
Macroeconomic Outlook 23
Table: Kuwait Economic Activity, 2011-2016 25
Political Stability Outlook 25
Healthcare 27
Healthcare Insurance 29
Healthcare Insurance Developments 29
Epidemiology 30
Motor 31
Table: Insurance Key Drivers, Autos 2008-2015 32
Islamic Finance 32
Insurance Risk/Reward Ratings 34
Table: Middle East And Africa Insurance Risk/Reward Ratings 34
Competitive Landscape 35
Competitive Landscape Analysis 35
Major Players In Kuwait’s Insurance Sector 36
Table: Kuwait’s Insurance Sector At A Glance, 2009-2010 37
Company Profiles 38
Local Company Profiles 38
Al-Ahleia 38
First Takaful Insurance Company 39
Gulf Insurance Company 40
Kuwait Insurance Company 42
Warba Insurance Company 43
Regional Company Profiles 44
Allianz 44
Arab Insurance Group (ARIG) 46
Aviva 48
AXA 49
Chartis 50
Generali 52
HSBC Insurance 53
MAPFRE 54
MetLife ALICO 55
RSA 57
Zurich Financial Services 59
BMI Methodology 61
Insurance Risk/Reward Ratings 63
Table: Insurance Risk/Reward Indicators And Rationale 63
Table: Weighting Of Indicators 64
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