With an expanding economy and population, a new national strategy aimed at enhancing the insurance sector and the rollout of a new health care system, this is a period of heightened activity for Qatar’s insurance and takaful (Islamic insurance) players. Buoyed by high disposable incomes and expected future demand for liquefied natural gas, there are expectations of steady annual growth in insurance premium and net profit. At the same time, the sector is looking to increase awareness of the importance and availability of its life and general products, while simultaneously adopting the latest digital developments.
Structure & Oversight
The main regulatory body for the insurance and takaful sector is the Qatar Central Bank (QCB). Within the QCB is the Insurance Supervision Department, which is responsible for monitoring sector activity, processing new licence and licence renewal applications, ensuring compliance with Qatari and international regulations, and drafting guidelines pertaining to the supervision of the sector.
Seven Qatari insurers are listed on the Qatar Stock Exchange (QSE), making them subject to the regulatory regime of the Qatar Financial Markets Authority (QFMA). There is also the onshore Qatar Financial Centre (QFC), and insurers registered with the QFC are subject to the supervision and regulation of the QFC Regulatory Authority (QFCRA), which operates independently of domestic commercial law. The QFCRA and the QCB are members of the International Association of Insurance Supervisors, a global body that works to harmonise the regulatory and supervisory regimes among its 219 members worldwide.
Although independent authorities, the QFCRA and QFMA have both been subject to the QCB’s rulings and regulations since the enactment of Law No. 13 of 2012 (QCB Law), which updated Law No. 33 of 2006. In addition, insurers and takaful companies operating in Qatar are subject to the commercial and business regulations of the Ministry of Commerce and Industry, while mandatory health insurance schemes fall under the remit of the Ministry of Public Health (MoPH).
The primary law governing the insurance sector is Law No. 1 of 1966. In addition, the QCB Law outlines the role of the central bank’s supervision division in regulating the sector. In addition, several other laws have come into force to govern the health sector, including Law No. 7 of 2013 and Law No. 22 of 2021.
While the latter of these two laws regulates health services and introduces mandatory health insurance, it also replaces Seha, the previous national health insurance scheme that was discontinued in 2015. Meanwhile, the QFC operates under Law No. 7 of 2005, which was amended in 2009. The QFCRA has also issued periodic updates, guidelines and rules on a range of pertinent issues for insurers, reinsurers and takaful companies operating through the QFC.
Plans & Programmes
Qatar’s long-term development plan is Qatar National Vision 2030 (QNV), which aims to diversify the economy and reduce its dependency on hydrocarbons, with the development of a vibrant financial services sector a principle goal. Since QNV’s launch, shorter-term national development plans have provided objectives for the economy and society. The most recent of these is the medium-term Third National Development Strategy (NDS-3) that was published in January 2024, which takes the country up to 2030. The NDS-3 outlines a series of clusters slated for development, with the financial services sector highlighted as one of them.
In this cluster, emphasis is placed on the development of the insurance sector. The plan states that Qatar expects to accelerate the establishment of an insurance technology (insurtech) centre, while also enacting reforms, and creating incentive programmes and awareness campaigns to increase the penetration rate of the insurance market. In particular, the plan advocates for a greater focus on small and medium-sized enterprises (SMEs). “Insurers are developing tailored products to cater to the traditionally untapped SME market,” Nasser Al Misnad, CEO of Damaan Islamic Insurance (Beema), told OBG.
Dovetailing with this, the central bank and other stakeholders have developed the Third Financial Sector Strategic Plan for 2024-30. The insurance sector is one of four main pillars of the plan, with four areas of growth outlined within it. The first of these is the development of the local insurance market, which entails a campaign to change perceptions, and launch more competitive insurance policies in the health, life and climate risk segments. Tailored insurance services for priority sectors such as logistics and manufacturing are also advocated, along with a push to increase inclusivity and policies that address areas such as mortgage insurance, wage protection and disability insurance.
The second growth area is insurtech, with a call to put in place the fundamentals necessary to establish Qatar as a recognised insurtech centre for the MENA region. The third growth area is a drive to increase the sophistication of insurers’ capital and asset management practices to increase capital inflows and prevent leakage of premium to operators abroad. Lastly, the development of Qatar as a preferred destination for the international reinsurance market is targeted, creating an optimal environment for reinsurers.
The Third Financial Sector Strategic Plan sets further tangible goals for the sector. These include a QR4bn ($1.1bn) contribution to GDP by 2030, while penetration levels should approach the GCC average for key lines of business, such as motor, life and health. In addition, gross written premium (GWP) aims to equal 3.5% of non-hydrocarbons GDP by the end of the Third Financial Sector Strategic Plan, exceeding GCC benchmarks.
The sector’s development is supported by a detailed plan, with the QCB and government both lending their support to its expansion. The period ahead is likely to see heightened activity by regulators, consumers, and insurance and takaful companies, with investors watching closely to see how these strategies unfold. “To boost insurance’s share of the country’s GDP, the key lies in raising awareness to enhance penetration in the individual retail market, which has historically lagged behind the corporate sector,” Jassim Al Moftah, CEO of Doha Insurance, told OBG.
Health Trends
After decades of providing free health care to all Qatari residents, in 2013 the MoPH introduced Seha, a single, state-owned insurance programme to provide basic coverage to Qatari nationals and expatriates. Following the programme’s liquidation, health insurance in the country reverted to ad hoc private offerings. However, this was seen as an unsatisfactory resolution, and in 2021 the MoPH launched a new scheme, which is in the process of being rolled out.
The latest system makes health insurance compulsory for non-Qatari citizens and visitors, with this insurance required to be sufficient to cover the entirety of their time in the country. However, there are exceptions; visitors who can obtain visas upon arrival are exempted, but only if their stay is less than 30 days. The law does not apply to those who are in transit through Qatar.
Policies can be purchased from a list of approved providers – both Qatari and international, conventional and takaful – with a QR50 ($13.72) monthly policy providing basic services. These can be enhanced with top-ups to include more comprehensive coverage in return for an extra premium, the scale of which is determined by the insurance providers. This scheme is expected to provide a major boost to Qatari insurers, as expatriate workers constitute some 88% of the population, and their employers are now responsible for providing them with health insurance. In addition, in 2023 some 4m tourists visited the country, according to government agency Qatar Tourism, and while many of these are exempt from the insurance requirement, the volumes of visitor policies are still significant.
Sector Players
Including QFC-registered companies, the sector consisted of 16 providers in 2023. Of these, four were takaful and the rest conventional, with nine national and seven foreign insurers present.
Between 2017 and 2022 the insurance market grew at a compound annual growth rate (CAGR) of 4.1% in terms of GWP, according to Dubai-based investment banking advisory firm Alpen Capital. However, the life and family insurance segment grew at a slower CAGR of 0.4% over the same period, in part due to the small size of the subsector. In 2022 Qatar had the lowest insurance penetration rate in the GCC, at just 0.7%, compared to the GCC average of 1.5%, with the rate rising to 0.8% in 2023. Qatar’s non-life insurance market accounted for 97.2% of total GWP the same year.
The QSE Insurance Board had identified seven insurance, reinsurance and takaful players with a combined market capitalisation of QR12.6bn ($3.5bn) at the end of April 2024. More than half of this figure can be attributed to Qatar Insurance Company (QIC), at QR7.2bn ($2bn), with the next largest company being Qatar Islamic Insurance Company (QIIC), at QR1.2bn ($325.2m). The next best-performing companies were Doha Insurance Group, with QR1.1bn ($307.4m); Qatar General Insurance and Reinsurance Company (QGIR), with QR963m ($264.3m); Beema, with QR750m ($205.9m); QLM Life and Medical Insurance Company, with QR718m ($197.1m); and Al Khaleej Takaful Insurance, with QR648m ($177.9m).
QIC, which has operations in Kuwait, Oman and the UAE, also led Qatar’s domestic sector in total assets – QR28.7bn ($7.9bn) at the end of 2023 – and after-tax profit, at QR615.3m ($168.9m), a significant turnaround from the loss of QR1.2bn ($324.7m) reported for 2022. Domestic and MENA premium grew from QR2.8bn ($757.3m) to QR3.6bn ($988.1m) over the course of 2023, and in February 2023 QIC announced the successful merger of its Omani subsidiary, Oman Qatar Insurance Company, with Qatar’s Vision Insurance. QIC has operations in Bermuda, the Cayman Islands, Gibraltar, Jersey, Malta, Singapore, Switzerland and the UK. Brexit’s negative impact on motor insurance in the UK affected QIC’s operations there in 2023, as the company saw premium fall from QR9.8bn ($2.7bn) in 2022 to QR8.5bn ($2.3bn) in 2023.
Doha Insurance reported total assets of QR2.8bn ($764.9m) at the end of 2023. Net profit was QR150.7m ($41.4m) for the year, up from QR103.8m ($28.5m) in 2022. The group has subsidiaries in Jordan, Lebanon, Luxembourg, Qatar, the UAE and the UK conducting activities in insurance, real estate and technology. The group also features Doha Takaful, which started in 2006 as an Islamic insurance window, but was re-structured under Doha Insurance in 2018.
In 2023 QGIR reported total assets of QR5.6bn ($1.5bn), with a net loss of QR1.6bn ($442.9m) compared to QR527.3m ($144.7m) in 2022. These losses were attributed to the revaluation of investment properties and the reclassification of investment in Algeria. The company’s insurance revenue reported for 2023 came in at QR768.2m ($210.9m).
At the end of 2023 QLM’s total assets were QR1.4bn ($383.7m), with a net profit of QR76.3m ($20.9m) compared to QR73.2m ($20.1m) at the end of 2022. GWP was QR1.1bn ($300.7m), down slightly from QR1.2bn ($335.9m) at the end of 2022. The company attributed this to heightened claims activity and a decrease in premium rates during the first half of 2023.
Takaful
Qatar’s takaful companies are among the most profitable in the GCC, as they had an average combined loss and expense ratio of less than 80% in 2022, demonstrating their efficient underwriting practices. In 2023 QIIC – which has one fully owned subsidiary, Qatar Islamic Real Estate Investment Group – reported total assets of QR1.3bn ($365.2m), along with net profit of QR142.8m ($39.2m) for the year, up from QR101.3m ($27.8m) in 2022. At the end of 2023 GWP – including takaful revenue – stood at QR523.5m ($143.7m), up from QR467.3m ($128.3m) in 2022.
At the end of 2023 Beema’s total assets were QR1.4bn ($390.2m), while net profit increased by 24.1% from QR56.6m ($15.5m) in 2022 to QR70.3m ($19.3m) at the end of 2023. The takaful company’s gross contributions were also up in 2023, from QR392.6m ($107.7m) to QR401.3m ($110.2m). The company had an initial public offering of 25% of its shares on the QSE in December 2022 and was listed in January 2023. Beema’s shareholders include QIC (18.8%), and the Qatari banks Masraf Al Rayan (15%) and Qatar Islamic Bank (26.3%).
At the end of 2023 Al Khaleej Takaful Insurance reported assets of QR1bn ($285.3m) and net profit of QR64.6m ($17.7m), up from the QR56.5m ($15.5m) in 2022. The firm’s gross contributions were QR333m ($91.4m), an increase from QR319m ($87.6m) in 2022. Al Khaleej has two main subsidiaries, Qatar Takaful Company and Mithaq Investments, although at the end of 2023 the former was in liquidation. The QFC is home to Seib Insurance and Reinsurance, Medgulf Takaful, T’azur Company and Takaful International, while France’s AXA, Kuwait’s Gulf Insurance Group and Germany’s Allianz maintain operations in Qatar.
Insurtech
Insurtech, a major pillar of the NDS-3 and the Third Financial Sector Strategic Plan, is already well established in Qatar. A 2023 survey by the QFC found that around 82% of insurance executives in the country saw insurtech as a significant driver of change in the Qatari market. Sector players have already developed extensive online presences that enable customers to search for and take out insurance policies. For example, QIC clients are able to receive a car insurance policy in just two minutes. Approved providers also have online application processes for the new, compulsory non-Qatari visitor and resident health insurance policies.
As evidence of Qatar’s progress in this field, the MENA Insurtech Association is based in Doha, and holds annual in-country summits and competitions. Recent winners of competitions held by the association have included Qatari insurtech outfits such as SHIELDNXT, an insurtech platform provider; and Anoud Technologies, a QIC subsidiary and software provider that is located in the QFC. Building on this, in August 2023 the QCB announced a new licence for companies wishing to develop policy comparison websites. The QCB began receiving applications in October 2023, with the closing deadline in December of that year. This move was part of the QCB’s efforts to increase regulation and establish the necessary conditions for the further development of insurtech and financial technology (fintech).
With this in mind, the March 2023 launch of the Qatar Fintech Strategy by the QCB places an emphasis on insurtech. The strategy itself focuses on capacity and regulatory development, providing further infrastructure for innovation and growth. The QCB sees the technology as a way to elevate the local insurance landscape to be comparable with more mature insurance markets. With the NDS-3 and the Third Financial Sector Strategic Plan specifically supporting insurtech development, a further expansion of this fintech subsector is expected in the years ahead.
Lines of Business
Within the non-life insurance segment, motor and health have traditionally been the two largest lines of business, with the former accounting for 17.9% of total non-life GWP in 2022. Health is counted among the other business lines, which totalled 59.4% of total GWP in 2022. Fire and theft insurance accounted for 12.2%, while cargo insurance accounted for 10.6%. That same year Qatar’s Planning and Statistics Authority recorded total paid claims of QR2.1bn ($587.4m), with the other, motor, cargo, and fire and theft lines accounting for shares of 62.6%, 29.3%, 4.5% and 3.6%, respectively. As in many markets, motor insurance tends to dominate in terms of the number of policies issued. In 2022 Qatari insurance companies issued 625,438 motor policies, compared to 75,760, 23,880 and 11,966 in the other, cargo, and fire and theft segments, respectively.
In contrast, life and family insurance continues to show low penetration, at 0.02% in 2022, down from 0.03% during the preceding five years. This comprised a life insurance density of just $17.30, down from the recent high of $20.70 in 2018, although the years ahead should see this expand as Qatar’s population rises, and the NDS-3 and the Third Financial Sector Strategic Plan continue to promote the sector. Alpen Capital projects a CAGR of 2.7% from 2023 to 2028 for Qatar’s life insurance segment, and the non-life insurance segment should also see an expansion. Construction will be at the heart of much of this, as the Transportation Master Plan for Qatar 2050 foresees 286 projects over its lifecycle, while health care and municipal developments – such as the construction of the Madinat Khalifa Health Centre, the Hamad General Hospital and the Equine Veterinary Medical Centre – all have insurance sector spin-offs.
Alongside these developments, new products are continuing to appear, including cyberinsurance policies. In October 2023 Qatar’s National Cybersecurity Agency held awareness workshops to highlight the dangers that are posed to companies by data breaches and cyberattacks. Responding to this evolving landscape, QIC, Gulf Insurance Group and others now offer related policies, with this likely to be a growth area as digitisation expands. A second new area being pursued is climate insurance, with authorities keen on improving Qatar’s climate resilience. Insurance against climate risks is likely to be a major addition to the portfolios of insurance companies in the years ahead. Considering the risks that climate change poses to Qatar, there is a growing awareness of its potential impact on the country among individuals and companies.
Outlook
Campaigns outlining the value of insurance products to combat climate change are likely to continue to ramp up, as are more general insurance awareness campaigns. As the country’s population grows – it was just under 3.1m as of April 2024 – organic demand is likely to push the sector forwards. In addition, the targeted approaches delineated under the NDS-3 and the Third Financial Sector Strategic Plan are set to result in a more robust policy environment for sector growth.
The health insurance segment is also set to see continued expansion, as the large expatriate population searches for policies offering the best medical coverage, with top-ups to basic coverage a significant source of new premium. Insurtech should also see the segment’s operational costs fall and efficiencies rise.
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