Qatar Financial Centre Authority Publishes First 'GCC Insurance Barometer'

Doha/Marrakech, May 20 (QNA) - The GCC region's insurance sector will continue to grow faster than the Gulf countries' Gross Domestic Product (GDP) over the next two years, according to Qatar Financial Centre (QFC) Authority's first GCC Insurance Barometer that was launched Sunday at the 29th Global Arab Insurance Federation (GAIF) Conference in Marrakech, Morocco. The report, which is based on 20 in-depth interviews with senior executives of regional and international insurance companies and intermediaries operating in the GCC region, highlights the main strengths, weaknesses, opportunities and challenges of the US$ 15 Billion GCC insurance marketplace, the near-term pricing and profitability outlook, prospects by lines of business as well as major trends and drivers. According to the Barometer, confidence in the future of the GCC's insurance sector remains strong. 60% of surveyed executives expect insurance premiums to continue outgrowing GDP. Besides the region's robust economic dynamics and continued government spending on infrastructure projects, its low insurance penetration is considered a key driver behind the outperformance of the insurance sector. 60% of respondents view the sector s regulatory environment as still inadequate. In addition, low levels of risk retention, political uncertainties in the region and challenging global economic prospects cloud the outlook for the insurance sector in the GCC. 90% of participating executives consider commercial insurance rates to be low and 58% share this view for personal lines of business. A clear majority of 70% and 75% of respondents, respectively, believe that prices will remain stable or even rise in the next 12 to 24 months. Profitability prospects are perceived slightly more positively. 70% and 53% of interviewees, respectively, judge the current level of profitability in commercial and personal lines as low. 90% and 79%, respectively, expect a stable or improving development. The GCC Insurance Barometer complements the annual GCC Reinsurance Barometer which is published by the QFC Authority in September. It will provide a unique regular overview of the state of the market and its near-term prospects, reflecting and measuring current attitudes of leading insurance executives towards the sector s key opportunities and challenges, the QFC Authority said in a media statement. Qatar Financial Centre Authority Acting CEO Shashank Srivastava said, "The GCC insurance sector is a US$ 15 Billion market and set to play an essential role in the region's future economic development. "With the GCC Insurance Barometer we aim to enhance transparency on the sector and facilitate decision making. Ultimately, this effort is about promoting the sector s professionalism and excellence." Commenting on the survey, Qatar Financial Centre Authority Director, Strategic Development, Akshay Randeva said, "The survey further strengthens our recognition as a credible and aspiring member of the regional and global industry community. "The findings also confirm our view that insurance and reinsurance offer great opportunities for financial sector development in Qatar and the wider region." The interviews for the GCC Insurance Barometer were conducted on behalf of the QFC Authority by Dr. Schanz, Alms & Company AG, a Zurich-based consultancy. The interviews were held in February and March 2012. (QNA)