Qatar, whose medium-term economic outlook remains “positive,” has the potential to see gross insurance premium of $12bn, Finance Minister HE Ali Sherif al-Emadi said yesterday. “Going by the present gross domestic product growth, we need to be $12bn” (in premiums), he told MultaQa 2016, organised by the Qatar Financial Centre Authority.
Quoting Middle East Insurance Barometer, which on Sunday disclosed $2bn premiums in Qatar insurance sector in 2015; al-Emadi said it would mean another $10bn worth business up for grab in the sector but did not specify by when $12bn level could be reached.
Highlighting “positive” medium-term economic outlook, he said big investments in infrastructure and the enhancement of non-oil sector’s role have helped the outlook remain encouraging.
Stressing that Qatar is seeking to promote the role of insurance sector and its contribution to the gross domestic product (GDP), al-Emadi said there are promising opportunities, which can be achieved through developing legislative and regulatory framework while working on innovative insurance products able to meet local market needs.
In view of the current situation in the global energy markets, Qatar has applied a balanced fiscal policy aimed at increasing the efficiency of public spending with a focus on major development projects to ensure continued economic growth, he said.
In this regard, al-Emadi said the insurance sector is one of the important pillars of doing business in various economic fields because of its close association with the process of risk management and pivotal role in long term financing, including for infrastructure projects.
The Qatar Central Bank (QCB) Governor HE Sheikh Abdullah bin Saoud al-Thani highlighted that the contribution of the insurance sector to GDP did not exceed 3.7%, despite growing 24% in 2013.
He said there is huge scope for growth in the insurance segment in view of the country’s preparation for hosting the FIFA World Cup 2022 and increasing the contribution of the non-oil sector.
Stressing that the QCB will soon issue guidelines in governing the sector according to the best global practices, he said Qatar has re-formulated all legislations organising insurance and reinsurance sector as well as assigning its supervision and control to the QCB by virtue of Law No 13 of 2012.
Sheikh Abdullah said the number of insurance policies jumped from half a million in 2010 to more than a million in 2014, reflecting the pace of growth in the local economy, and the increasing needs of both projects and companies as well as citizens and residents.
On the financial side, he said the QCB is taking necessary monetary policies to enhance liquidity in the banking system.
The QCB had stepped up monitoring of liquidity in the system and had issued circulars to improve liquidity, which will have positive effect on the sector, he said without elaborating.
Anna Maria D’hultser, secretary general of Geneva Association, the global insurance industry’s leading think tank, said underinsurance (gap in protection) is an important issue not only in developed and emerging economies but also in the Middle East and North Africa (Mena) region.
Highlighting a wide spectrum of root causes of underinsurance, which necessitates multi-pronged solutions from (re)insurers, she said these causes range from attitudinal issues due to lack of awareness, economic considerations on lack of affordability and institutional hurdles.