Kuwait Insurance Market Analysis 2020

Insurance Industry Kuwait 2020

• SHMA Consulting provided actuarial services to 8 companies in Saudi Arabia, 11 in the UAE, and other GCC companies (Kuwait, Oman, Qatar, Bahrain). They also provided services since 1990.

Table of Contents

• The document contains various sections on the Kuwaiti Insurance Industry in 2020.
• Sections cover Company information, Performance summary, Market Share and Premium, Claims and Ratios, Profitability Analysis, and Industry Benchmark.
• Other sections cover the impact of COVID-19 and various market highlights.

Limitations and Disclaimers

• Data used in the report was extracted from financial statements of listed companies on Boursa Kuwait.
• The report includes 8 insurance companies (6 conventional, 2 Takaful).
• The net profit/loss for Takaful companies reflects shareholder results only.
• The report is for general informational purposes only and should not be taken as professional advice.

Insights for CEOs

• 2020 saw a significant increase in Gross Written Premium (KD 763 Mn) compared to 2019.
• Total assets in Kuwait in 2020 were KD 1871 Mn.
• The retention ratio was around 50% for conventional companies and close to 60% for Takaful ones in 2020.
• The combined ratio for 2020 was slightly higher than that for 2019 for both conventional and Takaful companies.

Market Highlights

• Kuwait's insurance market is anticipated to reach nearly USD 2 billion in premium by 2024.
• Life and non-life insurance growth is projected at 5.8% and 8.5%, respectively, from 2019 to 2024.
• First Takaful Insurance is investing in a new Takaful insurer in Pakistan.
• A life insurance company is being established in Egypt by Kuwait Insurance Company.
• There is a new mobile application for insurance services called Saiyarti.

Industry Benchmark

• The weighted average retention ratio in 2019 was 51% and increased to 57% in 2020.
• Weighted average loss ratio increased slightly, from 67% in 2019 to 69% in 2020.
• Expense ratio showed improvement for many, remaining slightly below 80%.
• Combined ratio analysis showed slight volatility compared to 2019 for many Kuwaiti companies.

Impact of COVID-19

• The COVID-19 pandemic had a widespread impact on global economies.
• Insurers were monitoring the situation and implemented business continuity plans.

Market Share Proportion

• Gulf Insurance Company had the highest market share proportion in 2020.

Gross Premium

• The period between 2019 and 2020 saw a substantial increase in the gross written premium by Gulf Insurance Company.

Gross Premium Movement

• Gulf Insurance Company experienced a significant rise in its gross premium (12.78%) while First Takaful decreased by (-40.30%).
• Average growth of Kuwait's insurance market was around 7.78% in 2020.

Net Premium

• Net premium saw an increase of KD10 million in the Gulf Insurance Company during the period.

Net Premium Movement

• Kuwait Reinsurance Company and Gulf Insurance Companies saw modest positive growth while several other companies experienced declines.

Retention Ratios

• Kuwait Reinsurance Company and Al-Ahleia Insurance saw consistent high retention rates.
• There was a noticeable positive shift in the retention ratio of First Takaful Insurance during the assessment period.

Net Earned Premium

• Gulf Insurance Company reported the greatest net earned premium in both 2019 and 2020.

Net Incurred Claims

• Gulf Insurance Company held the highest net incurred claims in 2019 and 2020

Loss Ratios

• Wethaq Takaful Insurance had the highest loss ratios and other companies experienced declining trends.

Expense Ratios

• First Takaful Insurance had the highest expense ratio.

Combined Ratios

• Kuwait Reinsurance and Al-Ahleia showed consistent low combined ratios.
• Wethaq Takaful experienced the highest combined ratio values.

Net Profit/(Loss) (After Tax)

• Gulf Insurance Company showed the highest positive net profit.
• First Takaful and Wethaq Takaful reported the lowest net profit values.

Net Profit/(Loss) (After Tax)-Movement

• Wethaq Takaful and First Takaful displayed significant net losses.
• Most other companies showed improved net profits, as did some entities that showed net losses in 2019.

Asset Classification Aggregate

• About 39% of the total assets are comprised of investments.
• Approximately 14% are outstanding receivables and 39% are other assets.

Liability and Equity Classification Aggregate

• Liabilities account for the bulk of the insurance company's assets (72%).
• Equity represents approximately 28% of assets.

Return on Equity (ROE)

• Kuwait Reinsurance experienced a stable ROE over the period.
• First Takaful and Wethaq Takaful suffered declines.

Return of Assets (ROA)

• Gulf Insurance and other entities saw slight improvements or growth in ROA compared to the previous period.

Meet the Team

• Information about various individuals working in SHMA Consulting.

Feedback

• SHMA Consulting provides an analysis of the Kuwaiti insurance industry.
• They welcome feedback on the analysis.