Qatar- Hike in motor and health insurance premiums likely

(MENAFN- The Peninsula)

By Mohammad Shoeb

DOHA: ‘Stiff competition’ in the prices of motor and medical insurance products coupled with the sudden rise in the number of insurance claims a hike in the premiums of these services are in the offing a top official of major insurance company has hinted.

“Be its medical insurance or car insurance these products are not benefiting any insurance service providers because of the ongoing price war” Ali Ibrahim Al Abdul Ghani (pictured) Chief Executive Officer of Qatar Islamic Insurance Company (QIIC) told The Peninsula.

Ali Ibrahim added: “We are constantly negotiating with Qatar Central Bank (QCB) the banking and insurance sector regulator and have conveyed our legitimate concerns about the stiff competition in these segments to play a role to address the issue. We had a constructive meeting with the QCB officials along with representatives from the Traffic Department. Things are expected to move in a positive direction within a few months.”

He explained that the prices of car and medical insurance services were already very competitive but the massive ongoing construction works and traffic diversions have caused a sudden rise in claims to further worsening the situation which is expected to remain the same until 2020.

“Things are anticipated to improve with the completion of construction works and starting of the Doha Metro which may help reduce the number of vehicles from roads thus accidents” he said.

On the outlook for the local insurance market Ali said that coming few years especially the current year are expected to be tough in terms of growth in insurance premium due to the impact of dwindling oil prices which has affected all sectors of the GCC economies.

“We are waiting for the upcoming mandatory medical insurance and anticipating that this will help makeup investment losses that we going to incur this year” he said.

Commenting on the Company’s overseas expansion plans the CEO of the Shariah-compliant insurance service provider said that QIIC has successfully established its operations in several countries including Pakistan Syria and the UAE and exploring investment opportunities in many other promising markets such as Turkey Morocco Tajikistan Kenya and Ethiopia. But there are obstacles in some countries related to legislation to allow Islamic insurance companies (Takaful) to work.

The share of Takaful in Qatar according to Ali Ibrahim is not more than 25 percent but spreading more awareness about the benefits of these products can help enhance its market share.

Insurance penetration in GCC countries including Qatar is relatively very low against the developed countries or even compared to the global average. Last month speaking at the 10th edition of ‘Multaqa Qatar 2016’ Minister of Finance H E Ali Sherif Al Emadi noted that Qatar’s insurance sector has huge growth potential as the total volume of untapped insurance premium can reach up to $12bn (about QR43.70bn) or even more if the country achieves the insurance penetration level of 6 percent of GDP currently the global average.

According to latest available data Qatar’s insurance premium in 2015 accounted for little over 1 percent of the GDP which stood at $2bn (about QR7.28bn) for the year.The Peninsula