By Pratap John
Chief Business Reporter

Infrastructure and construction development, driven by FIFA World Cup 2022 and the government’s ongoing investment in the non-oil sectors, is keeping Qatar’s insurance market on a solid growth track, whose premiums totalled $2.2bn in 2014, says a new report.
The premiums written by the Qatari underwriters’ amount to 10% of the total in the GCC, making it the “third largest insurance market” in the region, said Alpen Capital in its latest report on the “GCC insurance industry”.
Qatar is the fastest growing insurance market in the GCC, displaying a CAGR of 22.4% between 2010 and 2014, it said.
While remaining at 0.03% since 2011, life insurance penetration has been stable in Qatar over the last couple of years. However, life insurance density has decreased to reach $29 in 2014 from $37 in 2010, Alpen Capital said.
This segment is dominated by large international insurance companies that provide protection and wealth/savings solutions to expatriates. The local population does not actively seek life insurance solutions due to high social spending by the government and the socio-religious beliefs.
Within the country’s non-life insurance segment, the sub-segments of energy, marine, and construction insurance are prominent and are expected to remain so in the future, considering its established hydrocarbons sector.
As third-party motor insurance is mandatory by law, the motor insurance segment accounts for a large portion of the non-life insurance market.
It is also the most competitive business line, characterised by low margins of the service providers. Medical insurance has been gaining ground gradually since 2014, when the Supreme Council of Health implemented a compulsory medical insurance programme for all nationals, expatriates, and visitors in Qatar.
This segment has been driving non-life insurance penetration in the country over the last two years.
“With favourable regulatory environment, non-life insurance density increased to $948 in 2014, up from $558 in 2010,” Alpen Capital said.
All Qatari insurance companies “benefited from strong capitalisation levels and diversified asset portfolios, in addition to relatively low to non-existent levels of financial borrowing”, Alpen Capital said.
Although the largest national insurers are the most profitable, they are often exposed to high underwriting risk associated with the engineering and energy lines.
With more than 40% market share in 2014, Qatar Insurance Company (QIC) is the leader among the six prominent insurance providers in the country, followed by Qatar General Insurance and Reinsurance (QGRI) that held around 18% of the market. However, no player leads the market in terms of profitability.
“While large national companies registered positive returns during 2014, resulting from underwriting energy and infrastructure projects, the pricing pressure within the rest of the market resulted in poor underwriting performance for several smaller entities,” Alpen Capital pointed out.