A market view of Qatar by Qatar Financial Centre Authority director of strategic development Akshay Randeva
Europe and North America still account for three quarters of the world’s non-life insurance premiums, but penetration has been eroding over the past decade on the back of market saturation and perennial pressure on rates. The outlook seems to be even more challenging as Europe is sliding back into recession and the US economy remains vulnerable.
Reinsurers therefore seek to broaden their footprint in some rapidly growing emerging insurance markets such as the Middle East, one of the fastest growing markets in the world over the past 10 years. Based on a total non-life volume of $32bn, we estimate the region’s reinsurance markets are worth close to $10bn.
In the Gulf region in particular, growth prospects remain bright given the vast pipeline of infrastructure and construction projects. At the same time, personal lines business (such as healthcare) is taking off. Reinsurance premiums and exposure are expected to continue outpacing GDP growth, a major finding of the just released 3rd QFC Authority reinsurance barometer, launched today at the Rendez-Vous de Septembre in Monte Carlo.
This growth momentum, combined with a low natural catastrophe exposure, makes the region attractive for reinsurers. Not surprisingly, the Barometer found that reinsurance capacity in the Gulf is set to expand further while carriers increasingly consider a local presence to capture opportunities on the ground.