Kuwait’s insurance and takaful (Islamic insurance) sector has shown resilience in recent years, continuing to record profit and policy growth despite an uncertain global economic outlook. The sector is also benefitting from a long-term strategy to strengthen its regulatory framework and consolidate players with greater capitalisation and more transparent governance. In the coming years, further digitalisation, new product strategies and additional regulatory measures are likely to benefit the sector. These moves come within an enhanced framework of economic and investment growth in the wider economy, as Kuwait moves forwards with a raft of macroeconomic measures.
Structure
Kuwait’s insurance and takaful sector has seen a number of new regulatory measures in recent years. Key to these is the Insurance Law No. 125 of 2019, which revoked the older 1961 law that previously shaped the industry. Executive regulations for the 2019 law were introduced in 2021, enabling full operation of its provisions. These apply to all conventional and takaful companies operating in the country, while also applying to brokers, risk assessors, loss adjustors, actuaries, and other insurance and reinsurance professionals working in Kuwait.
A notable move under the new regulation was the establishment of the Insurance Regulatory Unit (IRU) in September 2019. This is a dedicated sector authority operating with financial and administrative autonomy under the supervision of the Ministry of Commerce and Industry (MoCI). The IRU has taken on the role of sector regulator and monitor, with Mohammed Al Otaibi serving as president as of November 2025. Al Otaibi heads the IRU board, which also contains representatives from the MoCI and the Central Bank of Kuwait (CBK).
Other government agencies, such as the Ministry of Justice (MoJ), also have a role in the sector. In August 2025 MoJ announced that it was forming a committee to further develop the legal framework for the insurance sector, as part of a wider drive to modernise Kuwait’s legislative and regulatory provisions. This special committee contains advisors from the Court of Appeals, members of the IRU and representatives from the Ministry of the Interior and MoJ.
Oversight
The IRU issues licenses and ensures that firms applying for or renewing them meet a rigorous set of criteria. These include businesses being joint stock companies with a minimum capital requirement and that they maintain a minimum deposit in a Kuwaiti bank. All sector entities must also comply with the government’s Companies Law and other MoCI regulations, while managers must be Kuwaiti nationals with insurance and/or takaful experience. The IRU sets requirements for governance, transparency and solvency, as well as the qualifications needed to become licensed. In addition, it sets the rules for mandatory insurance policies, such as motor third-party liability (MTPL) and obligatory health cover. Kuwait follows International Accounting Standards Board regulations, including International Financial Reporting Standards (IFRS) 17. The IRU has issued a number of circulars on the adoption of this, with insurers beginning to submit their financial statements according to IFRS 17 requirements from July 2023.
The Capital Market Authority (CMA) has a role in sector regulation as insurers and takaful providers, as joint stock companies, list on Boursa Kuwait, the main operator of the Kuwait Stock Exchange. As of September 2025 eight insurance companies were listed, two of which were takaful. These were listed on the Boursa’s Main Market, where they contributed a combined 3.8% of the total market capitalisation. The IRU also represents Kuwait at a range of international fora and established the Kuwait Insurance Brokers Network to bring together sector professionals and foster collaboration and sectoral development.
In addition to national players, foreign insurers may also operate in Kuwait, provided they meet the above standards. They may operate through an agent, although as of January 2024 foreign companies were permitted to establish branches in Kuwait without requiring such a local representative. In May 2025 the IRU issued a regulation that all insurers providing investment-related products – both life insurers and family takaful companies – must procure a licence to undertake these tasks from the CMA. In August 2025 the IRU then issued regulations regarding company compliance with rules on professional ethics, competence and integrity. Governance frameworks for conventional and takaful companies must also be publicly declared.
Compulsory Insurance
A further recent change initiated by the IRU was the introduction of a unified system for mandatory MTPL insurance. The aim of this was to standardise and modernise motor insurance policies. The Beema electronic platform was launched to act as a one-stop-shop for the sale of MTPL policies across the country, supported by an IRU-approved list of participating insurers. While the initial rollout highlighted areas requiring refinement, authorities acted to ensure that the service operates at the highest standards. In October 2025 Beema was therefore suspended and is expected to resume when all directives align with regulatory standards.
The other major compulsory insurance type in Kuwait is health. Expatriates working in the private sector pay into a scheme run by the Health Assurance Hospitals Company (Dhaman) and can access Dhaman’s nationwide network of hospitals and health centres. A public-private partnership, the system replaces the Ministry of Health’s service for expatriates, who make up around two-thirds of the 5m population of Kuwait. Kuwaiti citizens receive free health care from the government, although many also have additional, optional private health care plans – as do many expatriates.
In October 2025 the Health Insurance Law for Retired Citizens (Afia) was cancelled, a year after being suspended after concerns emerged over a lack of competition among the private providers involved, along with other service quality challenges. Health care for retirees is now provided through government institutions.
Sector Players
The Kuwaiti market is dominated by the conventional insurance segment. As an illustration of this, results for the government’s eight listed insurers for the first half of 2025 show that the two takaful organisations among them were responsible for 1% of total revenue, or KD5m ($16.3m) out of a total of KD576m ($1.9bn). Nonetheless, in the first six months of 2025 the takaful segment’s revenue was 9% higher year-on-year (y-o-y), while conventional insurers saw revenue decline by 13%, illustrating the robust quality of Kuwait’s sharia-compliant insurers.
Among conventional insurers – and the sector overall – the Gulf Insurance Group (GIG) is by far the largest player. As of the end of 2024, GIG was 97% owned by Canadian-based Fairfax Financial Holding. In the first half of 2025 its KD360m ($1.2bn) in revenue accounted for 62% of the sector’s total. The company’s total assets as of June 2025 were KD1.3bn ($4.2bn), up from KD1.2bn ($3.9bn) a year earlier. GIG is also present in all the other GCC countries, as well as Algeria, Egypt, Iraq, Jordan, Lebanon and Turkey. In total, it has round 3.5m customers and over 4,000 employees.
The second-largest insurer in the first half of 2025 was Al Ahleia Insurance Company (AAIC), which had total assets of KD458.6m ($1.5bn) in June 2025, up from KD391.8m ($1.3bn) the previous year. AAIC has two subsidiaries – Kuwait Reinsurance Company (Kuwait Re) and Trade Union Holding Company Bahrain. Meanwhile, Kuwait Insurance Company (KIC) was third largest in the first half of 2025, with total assets of KD251.1m ($817.6m), up from KD226.9m ($738.8m) in June 2024.
In terms of market share, according to market analysts SHMA, GIG accounted for 77% as of June 2024, with AAIC at 12% and KIC 6%. The remaining 5% was divided among the other five insurers, with Warba Insurance and Reinsurance Company (WRIC) at around 4%, and First Takaful Insurance, the larger of the two Islamic insurance companies, at around 1%. Kuwait Re, Wethaq Takaful Insurance (WTI) and Bahrain Kuwaiti Insurance (BKI) held a combined share of less than 1%.
On the takaful side, in addition to the listed takaful companies, several larger insurance groups also operate takaful arms. GIG, for example, has GIG Takaful, which the group acquired in 2020 and operates as a closed Kuwaiti shareholding company. KIC, meanwhile, acquired an 81.8% share in Kuwait Islamic Takaful Insurance Company (KITIC) in 2023. KITIC had been operating in the country since 2003. Another non-listed Islamic insurer is KIB Takaful, which began operating in 2004 as Warba Health Insurance, issuing conventional policies. This then changed to takaful and branched out into other areas of business in 2007, first as Ritaj Takaful Insurance, then renaming to its current title in 2019.
Foreign insurers are also represented in Kuwait, with their numbers recently expanding with the addition of a branch office for one of the UAE’s most successful insurers, Orient Insurance. This was granted approval by the UAE authorities to make the move in March 2025. Other foreign insurers include India’s Oriental Insurance, Allianz, AXA, ING, Cygna and Bupa, with health and group life insurance a particular focus for these.
Lines Of Business
In terms of premium and penetration rates, the insurance and takaful sector is predominantly non-life. IRU figures for FY 2024/25 show total direct premium of KD616.2m ($2bn), with life accounting for around KD67.4m ($219.5m), or 11% of the total. This was mostly group life, which totalled KD57.1m ($185.9m), or 9.3% of the total, while individual life accounted for KD10.3m ($33.5m), or 1.7%. Health was the largest line of business, with 45% of the total direct premium in FY 2024/25. In non-life, this was followed by comprehensive motor, with 15.6%; fire, with 8.1%; MTPL, with 6.9%; marine/aviation, with 3.7%; and travel, with 0.2%. Other accidents accounted for 9.7%.
Health also accounted for the largest proportion of paid claims in FY 2024/25, with 63.9% of the KD417.1m ($1.4bn) paid out – this was 21.2% down on the figures from the previous year. For direct premium, with motor comprehensive accounted for 15.2%, fire and MTPL 3.3% each, marine/aviation 0.8% and travel 0%. Other accidents accounted for 4.1%.
Of the KD616.2m ($2bn) in total direct premium, KD552.1m ($1.8bn) was accounted for by domestic companies. Foreign insurers and takaful outfits accounted for around KD64.1m ($208.7m), or around 10% of the total. This compared with KD678.7m ($2.2bn) in FY 2023/24, with domestic insurers accounting for KD620.2m ($2.02bn), foreign firms for KD58.5m ($190.5m), or around 8% of the market’s total premium.
Looking at the combined ratios – a measure of how well companies manage claims and expenses in comparison to their premium income – most listed insurers and takaful outfits were below 100% in the first half of 2025, indicating income was sufficient to cover payouts and all other costs. GIG’s ratio stood at 73%, AAIC at 82%, First Takaful at 86%, BKI at 68%, WTI at 72% and WRIC at 59%. Two companies were over the 100% bar, with KIC at 112%, and Kuwait Re at 103%. Both were under 100% in the first six months of 2024, however, at 49% and 79%, respectively.
This underscores a further feature of the sector – the high ratio of investment income to underwriting income in many company portfolios. On a company level, in the first half of 2025, GIG reported profit from net investment of KD26.5m ($86.3m), versus net insurance results of KD15.7m ($X51.1m). Overall, a proportion of investment income to core insurance business of around 2:1 was typical across the conventional sector during that period, although the two listed takaful companies were exceptions, both reporting higher net insurance income than investment income for the first half of 2025 – a feature of many takaful companies worldwide, given narrower options for sharia-compliant investment.
Service & Product Development
Digitalisation is a priority for the IRU, which included it as a major target in its 2023-26 First Strategic Plan. The use of technology in IRU mandates is also increasingly apparent. As an example, rules issued in August 2025 on non-MTPL mandatory insurance policies include the obligation for insurers to include a QR code with each insurance policy issued. Cash transactions are prohibited, establishing an electronic chain of custody on all transfers. These rules were due to come into force in the first three months of 2026, 180 days after their issuance.
Insurers are also moving forwards with digitalisation. This is particularly evident in health and life, although it also includes operations and distribution as well as products and services. GIG now offers 100% of its products online through a centralised customer portal. The Kuwaiti market leader was also one of the first companies in the GCC region to issue sale and renewal services for some of its policies via an app in 2012. Other sector leaders, such as AAIC, KIC and WRIC, have all adopted digitalisation policies and rolled out online portals and electronic payment and renewal systems. Digital solutions are also increasingly prevalent in risk assessment and other operational areas, streamlining and objectifying product delivery.
Performance
Profit and investment income were the two main growth performers for the sector in the first half of 2025. Indeed, looking at the eight listed companies in the sector, profit after zakat (a payment under Islamic law that is used for charitable or religious purposes) and tax rose from KD49.8m ($162.1m) in the first half of 2024 to KD52.2m ($179m) in the first half of 2025. Meanwhile, investment income rose from KD50m ($162.8m) to KD55m ($179.1m). Insurance service results showed a more modest increase – 1% – over the same period, from KD45m ($146.5m) to KD46m (149.8m). The insurance service ratio therefore also expanded, from 7% to 8% between the two periods.
Insurance revenue for the listed sector saw a decline of 13%, from KD661m ($2.2b) to KD576m ($1.9bn). In terms of market share of revenue, GIG had 62%, AAIC 12%, and BKI 8%. The remaining 18% was divided between the other five companies. WTI showed the largest revenue growth, at 44%, followed by Kuwait Re, with 14%. The first six months of 2025 were marked by wide variations between companies in terms of revenue and profit, with Kuwait Re also recording the highest profit growth between the two periods, at 38%. AAIC also recorded profit growth of 20% and KIC up 7%.
The decline of revenue was largely a statistical effect of significant declines in GIG, the sector’s dominant player, which saw revenue fall from KD449m ($1.5bn) in the first half of 2024 to KD360m ($1.2bn) in the first half of 2025. WRIC, meanwhile, saw its revenue grow by 6% between the two periods. Insurance service ratios also varied between firms – WTI, for example, recorded 1464% growth over the period, while WRIC saw a 35% decline. Most companies reported improvements, however, demonstrating that underwriting discipline and cost efficiency remain a major focus across the sector.
Over the same period, a further variance was between conventional and takaful firms. Revenue expanded by 9% for Kuwait’s Islamic insurers between the first six months of 2024 and the same period of 2025, in contrast to a 13% drop for conventional insurers. Between the same two periods, profit rose 240% among the two listed takaful firms, in contrast to 3% growth in the conventional segment. In terms of premium, in July 2025 the IRU announced that FY 2023/24 had seen a 10% decline in direct premium for Kuwaiti firms to KD552m ($1.8bn), although the number of insurance documents issued increased to 1.8m.
Outlook
The period ahead looks set to be marked by a further series of regulatory reforms, as the IRU seeks to bring the sector further into line with international best practices. At the same time, new developments in digitalisation are expected to roll out in MTPL and health. Meanwhile, the economy is set to grow, with the IMF forecasting real GDP growth of 2.6% for 2025.
Fiscal and structural reforms are likely to drive demand and investment in the months ahead. This should boost insurance and takaful uptake, both on an individual and corporate level, benefitting the sector further. There is strong competition, with this leading to stronger, more consolidated players. Investment income is expected to continue to act as a major buffer against policy volatility, helped by the Kuwait Stock Exchange expanding by 19.5% in the first nine months of 2025, the highest gains among the GCC bourses.
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