QCB Governor H E Sheikh Abdullah Saoud Al Thani. Kammutty VP
Doha: The partial privatisation of state-owned energy companies, which started with initial public offer (IPO) of Mesaieed Petrochemical Holding Company (MPHC), will continue in coming years, said Governor Qatar Central Bank yesterday.
“The economic development strategy includes 10-year plan which aims partial privatisation of state-owned energy companies and its first phase of this started in Janaury this year with IPO of MPHC,” said H E Sheikh Abdullah Saoud Al Thani, Governor, Qatar Central Bank delivery key note address in insurance conference ‘Multaqa Qatar 2014’.
According to the governor, there are three main objectives of partial privatisation. “First, it aims to distribute state wealth among citizens. Second, it aims to encourage citizens to save and invest more. Third, IPOs will expand the financial markets of Qatar,” said the governor.
He added that there is immense potential for growth of insurance sector and increasing share of non-oil sectors in Qatar’s economy will have positive impact on insurance sector.
The second Mena Insurance Barometer, published yesterday by the Qatar Financial Centre (QFC) Authority revealed a strengthening of confidence in the region’s insurance sector. According to the survey, compulsory insurance requirements and continued investments into infrastructure projects will drive demand.
The Barometer is based on 38 in-depth interviews with senior insurance executives and intermediaries operating in the region. Three-quarters of the executives polled expect regional insurance premiums to outgrow GDP over the next 12 months. Between 2007 and 2012, the region’s economies grew at an inflation-adjusted growth rate of 4.7 percent per annum — markedly faster than the global average of 3.3 percent.
“Based on their strong fundamentals, the Mena insurance markets will continue to grow. The Barometer enhances market transparency as a key prerequisite to doing insurance business and, therefore, is an essential part of our commitment to the sector,” said Shashank Srivastava, CEO and Board Member of the QFC Authority.
According to the survey, personal lines are set to benefit from additional compulsory insurance requirements, while commercial insurance will receive a boost from new infrastructure and construction projects.
The region’s greatest strengths are its continued economic growth and the solid rise in direct insurance markets.
Opportunities arise from the large pipeline of major infrastructure and construction projects, the low insurance penetration levels of about 1.3 percent (premiums as a share of GDP), a mere fifth of the global average of 6.5 percent, and the population growth, fuelled by a continued influx of expatriates.