Ongoing infrastructure projects contribute to stable insurance growth prospects of about 7%-10% per year, according to S&P Global Ratings credit analyst Emir Mujkic.
In a report titled ‘GCC Insurers' Growth Prospects Could Slow In Some Markets’, released on 3 March, Mr Mujkic said that the growth estimates excluded the impact of the discontinuation of the Afya scheme, a programme that provided private medical insurance for retired citizens.
Apart from infrastructure, a tailwind propelling the Kuwaiti insurance market consists of large listed players that tend to exhibit robust risk-based capitalisation. Their potential for earnings generation is usually high.
Headwinds
Mr Mujkic also mentioned challenges faced by the Kuwaiti insurance market. These include:
- Economic risks are elevated, given the complexity of Kuwait's fiscal and institutional arrangements and their effects on public finance.
- The insurance market is overcrowded, which leads to intense competition in motor lines and some other lines among smaller players, particularly those that provide shariah-compliant insurance services.