By Ahmad Hajaji (with photos)
KUWAIT, Jan 14 (KUNA) -- The Director-General of the Kuwait Insurance Company, Dr. Ali Al-Bahr said up to KD 150 million were being paid annually as insurance premiums and the rate was growing by 12 to 15 percent annually.
Al-Bahr, who was speaking to KUNA, said the increase in local development projects has reflected positively on the growth of the insurance sector.
He added that the Takaful (Islamic cooperative) insurance accounted for between 10 and 15 percent of the size of the insurance market and that it was "very difficult to work out the accurate size of the Takaful Insurance since most Takaful insurance companies have been in business for not long, including a large number of companies who have been in such a business for less than a year."
He stressed that the Takaful Insurance market had no negative impact on the conventional insurance market, but has added to the market some new elements.
Al-Bahr said the Kuwait Insurance Company owned stock in some Takaful insurance companies and ten percent of stock in a new Takaful insurance company, which is expected to be launched by the Boubyan Bank, after the latter obtained a license for such a project.
Al-Bahr, who said the Takaful insurance sector was steadily growing, predicted that the sector would meet with some obstacles trying to get a cut in the traditional insurance market.
"But takaful insurance companies could work around such an obstacles through pooling their resources among one another," Al-Bahr said.
He blamed the failure of such companies merging among themselves on reluctance to do so by some boards.
"But their only alternative for viability is to merge among themselves," Al-Bahr said.
He stressed that the Ministry of Economy was issuing new licenses to anyone who was ready to abide by the guidelines for launching a new takaful insurance company. However, this does not mean that the ministry encourages chaos in the insurance sector. He called on the available companies to "absorb one another."
He cautioned against some insurance brokers, who launched some takaful companies as a prelude to selling their shares in them in the Kuwait Stock Market and make large and significant profit in the process.
He said that up to six new takaful insurance companies had secured licenses from the ministry and would start to operate later this year. He pointed out that the takaful insurance sectors has not been properly developed, as some analysts believed.
He added that the way new licenses were secured showed that some officials were determined to bring about the failure of the takaful insurance sector to show that it was not viable in the Kuwaiti economy.
He said that all insurance companies operating here, except two had expressed readiness to merge their resources.
The two companies include Ahlia Insurance company and Oula Insurance.
