GCC insurance market
0.94: Percentage of GCC insurance penetration rate
6.9: Percentage of global average insurance penetration rate
Source: Clyde & Co
The Qatar Financial Centre Regulatory Authority (QFCRA) is currently formalising a new set of regulations to help develop Doha as an insurance hub for the region in a bid to grow the country’s financial sector.
“Insurance is an area that is particularly underprovided for, not only in Qatar, but the region as a whole, and we expect to see it increasingly contributing to the growth and diversity of the Qatari economy,” says Phillip Thorpe, chairman and chief executive of the QFCRA, the independent regulatory body of the Qatar Financial Centre (QFC).
“We expect to have established a new regulatory architecture to support this by the end of the year.”
Since the start of 2010, the Qatar Financial Centre (QFC) has been actively seeking to grow this market through a focus on reinsurance, where companies offset risk and captive insurance, whereby a company sets up an insurance arm to underwrite its own risks to save costs.
On 2 September, UK-headquartered Kane became the first insurance company to be awarded a licence to establish captives in the QFC, but Thorpe he is currently in talks with “many other firms”, which are considering locating there.
“About 60-70 per cent of insurance premiums in the region are reinsured outside the region,” says Shashank Srivastava, acting chief executive of the QFC. “So there is a huge opportunity to retain those premiums.”
Srivastava says the QFC is seeking to become one of the top jurisdictions in the world for captive insurance companies within the next few years.
“Eighty-90 per cent of the world’s captives are effectively managed by four companies so it’s not that big an industry in terms of managers,” he adds.
“The industry is under a lot of pressure in the traditional centres worldwide. As a result, Kane and other managers are increasingly seeing Qatar as an attractive alternative.”
Bermuda currently boasts the largest market for captives. Regionally speaking, Doha will be competing with Bahrain’s well-established insurance centre and Dubai, which has also been pursuing the market in recent years.