Kuwait is a small country in the Persian Gulf in western Asia. It shares border with Iraq and Saudi Arabia. It has major oil reserves that has strongly influenced the market economy. Rise in oil revenue, increase in government investment on infrastructure projects are the major economic activities in Kuwait. Due to these economic reforms and population growth the insurance industry in Kuwait has a lot of potential to grow. Increase in economic activity also resulted in the growth of insurance in this area.
Kuwait insurance market is highly competitive due to large number of companies operating in the area , but the insurance penetration rate is very less in Kuwait. The cultural and social sentiment is the main reason for the low penetration rate in Kuwait.
The Insurance sector in Kuwait has experienced a better environment after allowing the foreign direct investment to the sector. The Insurance Department, Ministry of Commerce and Industry has been acting as the regulatory body in the insurance business in Kuwait.
Kuwait has a Muslim population so there are Takaful system of insurance. There is a growing need for Takaful insurance products. In Takaful insurance the individual members has to give a certain premium to make a pool of resource which will be used for the benefit of some individual members , the takaful insurance work under the guidelines of Sharia Law . It is based on mutual help and cooperation .
• Kuwait has a well developed healthcare system with both the public and private healthcare providers. Medical insurance is compulsory for expatriates in Kuwait.
• Since 1999, Kuwait’s insurance market has shown continuous growth. Kuawait insurance market is dominated by national insurance companies who capture a major market share.
Life insurance one of the major segment in the Kuwait insurance market. Though premiums are lesser in this sector. In Non-life insurance category accident insurance and marine and aviation insurance is the major market segment. Third party liability insurance is mandatory for the motorcycles in Kuwait.
• The distribution network is largely dominated by the agencies , brokers and direct marketing and banks.
• The major problems for the insurance companies in kuwait is the low penetration level as well as unable to diversify into different market. There is also problem towards the premium growth which is very slowly growing.
• There is a need for regulatory development and improved insurance law that will make the market more competitive , raise the level of premium and growth.
• Many of the insurance companies in Kuwait depend on the reinsurance which forces them with lesser profit and counterpart risk associated with the foreign insurers.
• There is lack of talent and professional expertise due to which insurance is not rapidly growing in the area in spite of the potential to grow.
Major life insurance companies in Kuwait are as follows:�
- Gulf Insurance
- AI Ahleia Insurance
- American Insurance
- First Takaful Insurance
- Warba Insurance
Major Non-Life Insurance Companies In Kuwait is as follows:�
- Kuwait Insurance
- 1 st Takaful Insurance
- Wethaq Insurance
- Oriental Insurance
- New India Insurance
Last Updated on : 26th August 2013