Qatar is a unique market within the Gulf Cooperation Council (GCC) with an economy that has been rapidly growing on the back of natural gas. With diversification efforts added to this, the economy can support the growth in insurance companies and takaful operators, writes Blake Goud.

This is not to say that the drop in energy prices is not having an effect on the insurance and the takaful segment. Qatar represented USD34 billion (QAR123.8 billion) of the USD197 billion (QAR717 billion) in projects tendered across the GCC in 2015. This quantum of projects tendered, which represents a record amount, will continue to be supportive for insurance companies in 2016 since many projects will be completed only over a multi-year process.
The bigger challenge to Qatar’s insurers (including its takaful operators) comes from their dependence on investment income to offset high combined ratios, which is a measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. The combined ratio is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium. The ratio is typically expressed as a percentage.

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