(MENAFN- Gulf Times) Qatar's insurance sector continued to record robust growth during 2017, outpace the banking sector, and saw a growth of 13.7% in its aggregate balance sheet to QR50.6bn last year, according to the Qatar Central Bank.
The aggregate balance sheet of the domestic insurance firms stood at QR44.5bn in 2016, the QCB said in its 9th Financial Stability Review (FSR).
Reflecting the healthy growth in insurance, gross written premium (GWP) accelerated by 14.5% during the year on top of 11.8% increase in the previous year. GWP stood at QR14.4bn in end-December 2017.
The contribution of domestic insurers in Qatar was QR12.3bn and that of international branches was QR0.3bn.
Net written premium (NWP) grew by 10.7%.
Though the gross income increased by 6.4% during 2017 compared to the previous year, the net profit, albeit positive, recorded a sharp decline.
This was largely due to hurricanes in the US and earthquake in Mexico leading to insurance and reinsurance claims on the largest insurer.
Consequently, there was a sharp fall in the return on equity and the return on assets. The share of investment income in total income increased marginally during the same period.
Solvency coverage of insurance firms remained much above the regulatory requirement.
Average solvency ratio stood at 271% on a consolidated basis. Leverage ratio remained almost stable around the previous year level, QCB said.
Sharp rise in GWP relative to the NWP resulted in modest decline in retention ratio but it continued to rule high at almost 77%, the QCB said.
In view of the emphasis on prudence in investments, fixed maturity instruments investments continued to record sharp growth while those in equity and real estate declined during the year.
Reinsurance receivable and premium receivable recorded robust increases during the year, the QCB noted. On the liabilities side, a sharp increase in technical provisions was recorded, it said.
According to the QCB, the systemic risks posed by the insurance sector, though substantially smaller than that of banks, have been growing over time and are expected to continue doing so.
Therefore, the QCB has been strengthening the supervision and regulation of the sector to facilitate its sustained growth
The QCB said it 'issued a number of circulars on motor insurance, in order to provide clarity and to improve customer protection as motor insurance is the main line of insurance that individuals purchase.
These circulars focused on disputes between customers and the insurance companies, setting rules for how companies must deal with complaints and rules for compensation to the customer.
In addition, the QCB has been collecting real-time data on motor policies from the insurance companies for use of Traffic Department during renewal of vehicle registration.
The institutional structure of the insurance sector under the regulatory jurisdiction of the QCB remained unchanged during 2017. The sector comprised of 12 firms, of which eight are domestic and four are branches of international companies.
Among the eight domestic firms, five were publicly traded, two are privately held and one is a limited liability company (LLC).
There are eight conventional firms and four takaful firms. The insurance sector is exclusive of brokers, reinsurance firms and intermediaries, the review said.
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