Kuwait has long been the less flashy nation in the Gulf but that does not mean it has been any less successful. It has a burgeoning economy, which grew 2.3 percent in 2013. While non-petroleum sectors accounted for only 10 percent of that growth, they are expanding rapidly – and that is especially true of the insurance industry.
The Gulf Insurance Group (GIG) is the largest insurance network in Kuwait, in terms of written and retained premiums within life and non-life segments. As such the group has been a beacon, guiding the growth of this nascent industry. Khalid Saoud Al Hassan, the Group Chief Executive Officer of GIG, spoke to us about the trials and rewards of operating in a market such as Kuwait and why GIG is a company to watch.
How has the Kuwaiti insurance market developed over the years?
In line with the rest of the financial services sector in Kuwait, the insurance industry remains largely underdeveloped. However, the sector has experienced a steady expansion over the last few years, which resulted in a steady increase in life insurance business as well.
Despite this, there is intense competition between companies and prices, which leads to a lowering of premiums and slow market growth. The absence of an independent body to oversee the local insurance market and the development of regulatory controls, and the lack of comprehensive information about the sector are also major challenges for the industry. Kuwait suffers from a lack of community awareness of the importance of insurance and additionally some of the rules and regulations can be limiting.
Kuwait suffers from a lack of community awareness of the importance of insurance
How does the insurance market in Kuwait interact with the emerging Islamic finance market?
We believe the Islamic finance industry will be much more developed in the near future, particularly after reviewing the new regulations of Basel III, which may offer an opportunity for the industry to strengthen its capitalisation and liquidity management. On the other hand, the insurance market has not yet managed to achieve a satisfactory scale in Kuwait.
Takaful insurance is still an emerging business in Kuwait and it will take some years to develop this type of business in this small market. However, the increasing need for Takaful in both life and casualty insurance – in addition to the new Islamic finance market – means there is potential for growth.
What significant innovations have allowed Gulf Insurance Group to succeed?
Gulf Insurance achieved the first giant leap of unifying and bringing all of its subsidiaries under one globally recognised brand name: GIG. This included unifying all the IT platforms, distribution channels, reporting systems, HR and management expertise. This has enabled the company to maintain a leadership position in Kuwait for the 13th consecutive year, with very strong leadership positions through the MENA region.
GIG has also excelled in the innovation processes of its e-services platform: it was the first insurance company in Kuwait to launch iPhone and Android apps.
New branches and a new kiosk setup have also contributed to our successes, including regional expansion.
What are Gulf Insurance Group’s plans for the future?
GIG’s consolidated gross written premiums are well diversified among several business lines. In 2013, medical was the group’s most significant line, followed by motor and property.
Currently we have 10 subsidiaries and four affiliate companies, and a strong presence in Kuwait and neighbouring countries. We are in the final process of entering into Algeria, to explore their insurance market both in life and non-life.
We are developing GIG-wide common products, accelerating bank assurance services from our major subsidiary companies outside Kuwait. We are also in the final stages of rebranding our corporate and sub brands, which has really helped us to make a big difference in our existence in the local market and in the region.