Direct insurance or reinsurance firms governed by the Qatar Central Bank have seen their aggregate balance sheet growing by nearly 30% to QR39.7bn in 2015, a new QCB report has shown.  
The assets on the balance sheet consist primarily of cash and liquid assets totalling QR5.1bn (12.8%), investments of QR18.4bn (46.2%) and reinsurance receivables at QR7.4bn (18.6%).
The growth in assets during 2015 was primarily driven by premium receivable and reinsurance receivable. Increase in technical provisions and unearned premiums contributed to the growth in liabilities, the QCB said in its ‘2015 Financial Stability Review’.
The QCB insurance sector at the end of 2015 comprised some 12 firms, of which eight are domestic and four branches of international companies. Among these 12 firms, there are eight conventional firms and four takaful firms. The insurance sector is exclusive of brokers and intermediaries, it said.
Gross written premium (GWP) of the insurance sector rose by one-third from QR8.4bn at end-2014 to QR11.2bn in December 2015. In December 2015, the contribution of direct insurers in Qatar was QR11bn and that of international branches stood at QR0.2bn.
Net written premium (NWP) refers to insurance premiums net of the costs like agent’s commissions and/or payments made for reinsurance. Compared to the growth in GWP, the growth in NWP was much sharper at 50.6%.
Consequently, the retention ratio improved during 2015. The combined ratio is a key measure of profitability in the insurance industry.
A ratio below 100% indicates that a firm is generating underwriting profit, while a ratio above 100% indicates that it is incurring underwriting loss. The combined ratio improved from 100.9% in 2014 to 98.1%, indicating improvement in underwriting profitability.
While the loss ratio remained stable, the QCB said the expense ratio recorded a decline during 2015 compared to 2014. The return on equity of domestic insurers improved from 15.8% to 16.2% during the same period. Though the gross income increased by over 24% during 2015 compared to the previous year, the net profit remained stagnant.
The share of car insurance premium in the GWP is high and increased during the year, it said. The share of fire insurance remained stable while that of marine and accident insurance dipped further during the year.
Though the loss ratio remained stable, the expense ratio declined during 2015 compared to the previous year. Hence, the combined ratio also declined during the year reflecting improved performance of the insurance industry, the QCB report showed.
Reflecting the increase in business, the technical provisions also recorded sharp jump during 2015 to take care of potential increase in future claims, the QCB review showed.