Abdulla AlSenan

Abdulla AlSenan, Vice President of the Insurance Regulatory Unit (IRU), talks to TBY about going above and beyond to make the sector more transparent to outside investors and deal with unprofessional behaviors in the sector.

What is IRU’s mandate?

IRU was established on the basis of Bylaw 125 in 2019 to supervise the insurance sector in Kuwait independently. Kuwait was among the first countries in the GCC region, along with perhaps Bahrain, to initiate insurance sector regulation. Some of our insurance companies have been listed since the first stock exchange was established in the 1970s, and the gap between regulation and supervision within the insurance sector had widened because the sector developed without the improvement in regulations. In 2019, the law was enforced, and IRU became the only governmental entity established with zero finance from the government. We initiate and regulate new insurance activities like third-party liability insurance (TPL), which are not regulated by OCI. We are studying the extended warranty activity and looking to regulate unique insurance activities in the region. However, this is at an early stage.

How did the pandemic impact the insurance sector?

After the pandemic, all sectors improved their digitalization abilities. The insurance sector in Kuwait gained, because the number of insurance claims dropped. The Ministry of Health also enforced travel insurance to cover COVID-19. These changes were reflected in the stock market. According to the record, almost all insurance companies gained in earnings per share in 2020, 2021/2022. Over that period, we took part in regulating multiple acquisitions, GIG and AXA being one of them.

What is the role of Kuwait insurance sector in relation to the international market?

Our performance needs to be improved, and we are looking to increase the insurance concentration rate. For example, we are studying the business interruption cover for all commercial entities. Under the umbrella of IRU, we can set a list of requirements for companies and for the investment companies to get insurance coverage for their own liabilities and operation activities. That will improve and increase the dollar premium. We also aim to reform the TPL business, because the cost of TPL for a private car is around KWD20, or less than USD80. If we look at the inflation rate with the consumer processing index, the value of KWD1 in 1981 is equivalent to KWD3.4 today, while the cost of insurance was KWD16.5 in 1981 and KWD56 today. There is no limit on liabilities, and all of this was regulated by the traffic bylaws. Now, we will be the ones to regulate it.

How do you expect this regulatory change to affect the interest of western investors in the Kuwaiti insurance sector?

We aim to make the Kuwaiti market fully transparent with all the available information about the companies, risks, claims, and so on. We want to simplify the procedure of exercising new activities in Kuwait for external investors. We will start to translate all the insurance laws and bylaws to English, so foreigners will have easier access to it. We hope to collaborate with another regulator in Europe, America, or East Asia to establish a database for information and clear procedures. Moreover, we are thinking outside the box. In Kuwait, we are currently dealing with many unprofessional entities, and we have decided to approach it differently. We have developed our own initiative IRUSOFT to monitor and regulate insurance claims and disputes in a user-friendly, automated manner. It is solely monitored by IRU, so there is no risk of third parties influencing the outcome of these disputes and claims. Our team is able to swiftly check each complaint and look through the backlog if necessary. What is more, anyone can file a complaint through the system, and the system will deliver it to the company under our supervision. This way, we can stay on top of everything that takes place, and it only takes a moment. It is simple to use and much more efficient. To make it even easier, we only check the complaint after escalation. This way, we can regulate without unnecessary time loss and escalating workload for any of the parties involved.