QE listed insurers’ assets in 2012 totalled QR15.9bn

By Pratap JohnChief Business ReporterFive national insurance companies listed on Qatar Exchange accounted for assets worth QR15.9bn last year, equivalent to roughly 2.3% of the country’s 2012 GDP, a report by QCB shows.Total gross premium earned by these five underwriters in 2012 amounted to QR3.92bn, which accounted for roughly 0.6% of last year’s GDP, Qatar Central Bank said in its 2012 Financial Stability Review. The five national insurance companies directly listed on the QE are Al Khaleej Takaful, Doha Insurance, Qatar Islamic Insurance, Qatar General Insurance and Qatar Insurance. A QCB analysis of the balance sheets of these underwriters indicated that their total assets grew by 6.7% during 2012 as compared to 3.6% in the year before.The five insurance companies maintained their profit levels in 2012, QCB report said. Net profit increased by 2.9% in 2012 as compared to 2.7% in 2011. “The exceptional increase in net claim was offset by the increase in net premium and investment income during 2012, which in turn helped the companies in maintaining the profitability.“Despite reporting an increase in net profit in 2012, the companies registered a decline in return on equity owing to an increase in their equity capital,” the report said.In 2012, the insurance companies witnessed substantial decline- around 35%, in “outstanding claims” as compared to 2011, QCB report said.The decline in outstanding claim offsets the increase of total claim during 2012, which in turn helped them in increasing their net income.The Qatari insurers met 48% of their fund requirements by way of equity capital, the report said.In 2012, the equity capital of these five companies increased by 4.6%. “The hesitant recovery by the advanced economies in 2012 compelled the insurance companies to look elsewhere for better investment opportunities. The liquidity holding thus reduced in 2012 and the fund was used to increase their investment portfolio. Investment in securities increased by 3.9% in 2012 as compared to 0.6% in 2011,” the report said.“With the increasing need for safety and security from the unforeseen losses and damages, the insurance sector has gained in prominence,” the report said.On the regional level, insurance premium growth is quite high for GCC countries in comparison with the advanced countries.In 2011, Saudi Arabia reported a growth of 12.9% in gross premium. Annual growth of more than 12% in gross premium was also reported by UAE and Oman in 2011. Qatar’s status in premium collection was comparatively low at 7.2% in 2011 and this amount further dwindled in 2012. On the other hand, US insurance sector registered 9.5% growth in gross premium during 2011.Also, insurance penetration in GCC is quite low as compared to global standards. The penetration ratio for Qatar has remained low at 0.54% even in 2012.In 2011, the highest penetration ratio of 2.2% was reported by Bahrain among the GCC countries. Kuwait was the lowest with 0.5 %.