Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Kuwait's takaful firms struggle in crowded market  Join our daily free Newsletter

MENAFN - The Peninsula - 12/02/2014
No. of Ratings : 0
Add to Mixx!

(MENAFN - The Peninsula) Kuwait's first Islamic insurer was born 14 years ago, but its takaful firms are still struggling in a crowded market that faces cut-throat competition. This has led to stagnant growth and persistent losses for takaful firms operating in Kuwait, one of the world's richest countries on a per capita basis, raising doubts about the sector's long-term viability

In a market with 32 insurers, takaful firms say they are at a disadvantage to their conventional peers which have operated for decades, allowing them to build solid customer bases and amass large financial surpluses

While Islamic finance widens its global footprint, Kuwait's takaful sector could shrink in the next five to seven years, said Abdulrazaq M Al Wohaib, Managing Director and Chief Executive of T'azur Takaful Insurance Co. "We are moving opposite to the rest of the world - this has reduced the profit margins of these companies.

Gross takaful contributions in Kuwait grew an estimated 4.3 percent in 2012 after 4.5 percent in 2011, among the lowest growth rates for takaful anywhere in the world, a report by consultancy Ernst & Young estimated

Kuwaiti takaful firms posted a combined KD47.4m (167.7m) in premiums in 2012, an 18.7 percent shareof the total, Commerce Department data showed. This was spread across 11 locally incorporated takaful firms; many companies in the sector have failed to post consistent profits

Unlike conventional insurance, takaful is based on the concept of mutuality, where a takaful operator sets up a fund to oversee and manage pools of money contributed by policy holders. Takaful firms are obliged to distribute excess profits to policy holders, unlike conventional firms which account for such surpluses as profits

But when deficits occur, these must be funded with interest-free loans extended by the firm, which can lead to losses for shareholders, said Hussain Ali Al Attal, Chairman and Managing Director of First Takaful Insurance Co

Takaful companies argue this puts them at a disadvantage amid intense competition from conventional firms; the country's six largest insurers command close to two-thirds of the market

Furthermore, the takaful sector lacks a dedicated supervisory body, leaving an opening for negative competitive practices, Al Attal added. Price under-cutting by conventional firms aims to drive takaful firms from the market, said Saad Ebrahim Makki, Vice-Chairman and chief executive of Takaful International Co


The Peninsula

  MENA News Headlines
 Oct 22 2016 - EU regrets withdrawal of South Africa from ICCKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) BRUSSELS, Oct 22 (KUNA) -- The European Union has expressed its "deep regrets "over South Africa's decision to initiate its withdrawal from the International ...

 Oct 22 2016 - Kuwait- KUNA main news for Saturday, Oct 22, 2016Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Local: KUWAIT -- With attendance of the visiting Queen Silvia of Sweden, Information Minister and Minister of State for Youth Affairs Sheikh Salman ...

 Oct 22 2016 - Swiss NGO honors Kuwaiti-based institute for global effortsKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) By Nawab Khan BRUSSELS, Oct 22 (KUNA) -- The Arab Planning Institute (API), based in Kuwait, has been awarded the prestigious Gold Medal by the Crans Montana ...

 Oct 22 2016 - Kuwait- Info. Min. decides: Ban on primaries, reputation smearing, financial incentivesKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) KUWAIT, Oct 20 (KUNA) -- The Minister of Information has issued a Ministerial Resolution stipulating total ban on primaries, tit-for-tat mudslinging among ...

 Oct 22 2016 - Boursa Kuwait ended last week with mixed performanceKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) KUWAIT, Oct 22 (KUNA) -- Boursa Kuwait ended last week with mixed performance, as the Price Index closed at 5,321.46 points, down by 0.12 percent from the week ...

 Oct 22 2016 - US Secretary of Defense to meet with Iraqi Prime MinisterKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) BAGHDAD, Oct 22 (KUNA) -- US Secretary of Defense Ashton Carter arrived in Baghdad on Saturday to meet with Iraqi Prime Minister Dr. Haidar Al-Abadi along with a ...

 Oct 22 2016 - Kuwait- Info. Min. launches campaign for covering legislative electionsKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) KUWAIT, Oct 22 (KUNA) -- Minister of Information and Minister of State for Youth Affairs Sheikh Salman Sabah Salem Al-Sabah announced on Saturday the launching of ...

 Oct 22 2016 - Nizzolo wins Stage 1 of Abu Dhabi TourKhaleej Times
(MENAFN - Khaleej Times) Reigning Italian champion Giacomo Nizzolo (Trek - Segafredo) won Stage 1 of the second Abu Dhabi Tour as he outsprinted John Degenkolb (Team Giant - Alpecin) and race ...

 Oct 22 2016 - UAE- Two jailed for sharing indecent video of disabled manKhaleej Times
(MENAFN - Khaleej Times) Two Arab nationals were sentenced to three months in jail by the Sharjah court for capturing photographs and videos of a mentally-retarded man in an indecent manner and ...

 Oct 22 2016 - Kuwait FM delivers lecture at Atlantic CouncilKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) WASHINGTON, Oct 21 (KUNA) -- Kuwait's First Deputy Prime Minister and Foreign Minister Sheikh Sabah Khaled Al-Hamad Al-Sabah delivered a lecture at the Atlantic ...





Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country

Search News
Market Indices
Quotes & Charts

Global Indices
Arab Indices


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Economic Calendar
Financial Glossary

Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help