How has Kuwait Insurance performed in the past year?

Kuwait Insurance witnessed significant growth in the past year. After the portfolio became robust following the Covid-19 pandemic, the company experienced a jump in premiums from 38 million dinars (USD 124 million) to 48 million dinars (USD 157 million). It holds a leadership position in Kuwait in terms of profitability, with dividend payouts increasing from 20 fils per share (USD .07) to 33 fils (USD .11). The growth has been largely driven by individual life insurance, a market that Kuwait Insurance pioneered and currently leads. Over the past three years, the company has achieved an annual growth rate of 150%. Kuwait Insurance also provides group medical insurance, particularly for oil and gas companies.

How attractive is the oil and gas sector for Kuwait Insurance?

The oil and gas sector holds significant potential for Kuwait Insurance. However, the Kuwaiti insurance industry heavily relies on government spending, which fluctuates based on the state of the oil industry. Recognizing this, Kuwait Insurance made a strategic decision six years ago to explore growth opportunities in the energy sector. Penetrating this market is challenging as brokers and international firms predominantly cover most of the energy market. Nevertheless, Kuwait Insurance has built strong relationships with drilling companies and is currently expanding its involvement in the energy sector, primarily focusing on oilfield services. The company remains open to exploring opportunities with chemical manufacturers and shipping companies.

How has the competitive landscape evolved in the past few years?

The insurance industry in Kuwait has witnessed significant growth in terms of the number of participants, with a total of 38 insurance companies, 34 of which were licensed starting in 2000. This rapid increase in participants has occurred in a relatively small market. Currently, the newest 34 insurance companies hold a combined market share of approximately 44%, which means that, on average, each company holds a 1% market share in a market valued at KWD 500 million (USD 1.6 billion). This intense competition leads to companies vying for premiums and engaging in price-based competition. Similarly, the insurance industry in the region is shifting from managing risk to managing cash crises. The establishment of the Insurance Regulatory Unit (IRU) is seen as a positive step towards introducing an independent supervisory authority.

What is Kuwait Insurance’s geographical expansion strategy?

Kuwait Insurance has set its sights on expanding its presence beyond Kuwait. The company has already applied for a license in Egypt and is currently conducting a feasibility study for further market expansion. The next potential markets under consideration for expansion are Saudi Arabia and the United Arab Emirates (UAE). In the case of Saudi Arabia, Kuwait Insurance is exploring the possibility of entering the market through an acquisition rather than establishing a new company. Geographical diversification is seen as a crucial strategy to sustain growth and consolidate revenue gains. With only 35% of approved projects moving forward in Kuwait in 2022, it is essential for the company to explore new markets and secure new projects to overcome potential challenges.