Qatar’s Islamic insurance sector GCC’s ‘most profitable’ market in 2022: S&P
- Date: 09-Aug-2023
- Source: Zawya
- Sector:Financial Services
- Country:Qatar
Qatar’s Islamic insurance sector GCC’s ‘most profitable’ market in 2022: S&P
Qatar's takaful (Islamic insurance) sector remained the GCC's most profitable market, with insurers reporting an average combined loss and expense ratio of lower than 80% in 2022, S&P Global Ratings has said in a report.
Aggregate post-tax earnings in of GCC Islamic insurers improved by almost 70% in 2022 when compared with 2021. First-quarter 2023 results suggest it could be another profitable year, thanks to rate adjustments in previously underperforming lines and potentially stronger investment returns, S&P noted.
However, earnings were not equal and some Islamic insurance markets continued to be more profitable than others, it said.
S&P expects favorable economic conditions and higher insurance prices--reflecting increased claims frequency and costs--and demand will boost business growth prospects for takaful insurers in the GCC over the next 12-18 months.
This, it said comes after strong year-on-year gross written premium/contribution (GWP/C) growth of about 23% in 2022. Some Islamic insurers in GCC countries adopted IFRS 17 from January 1 this year with most remaining insurers likely to adopt on the same date next year.
IFRS 17 requires a company to measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts.
“We believe the adoption of IFRS