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While the insurance market has grown steadily over the past decade, market penetration in Kuwait remains limited at 0.58%, the lowest in the GCC region. Encouraged by high growth rates and favourable entry requirements, the sector has grown from six companies in 1999 to 34 today. Despite steadily increasing competition through the first half of the 2000s, the industry as a whole posted solid growth in terms of gross written premiums during this period. Despite challenges, most agree that there is substantial potential for growth in Kuwait’s insurance industry.

As the government continues to develop a regulatory framework for the sector, Islamic financial instruments are playing an increasingly prominent role in banking. The country is home to one of the largest and most diverse markets for sharia-compliant instruments, and as of September 2012, a full 42.3% of Kuwait’s total banking assets were Islamic. This chapter contains an interview with Mohammad S Al Omar, CEO, Kuwait Finance House.

With the National Development Plan providing a stable foundation for future expansion, the government is working towards revamping legislation in order to allow for some restructuring. There are also efforts under way to diversify the bourse, which will include increasingly popular and varied sharia-compliant financial instruments. As the markets continue to recover, corporate debt issuance is also on the rise. This chapter contains interviews with Saleh Al Falah, Chairman, Kuwait Capital Markets Authority; and Faisal Sarkhou, CEO, KAMCO.

Despite a variety of ongoing challenges, Kuwait’s banking sector has performed well in recent years. The country’s 10 local banks and 11 foreign players make up one of the oldest banking sectors in the region and the third largest in the GCC. In the wake of the global financial crisis, the Central Bank of Kuwait (CBK) has introduced a raft of new regulations. Although these are likely to have a negative impact on profits in the short-term, they are expected to support sector growth in the long term. This chapter contains an interview with Mohammad Y Al Hashel, Governor, Central Bank of Kuwait.

The economic outlook appears broadly positive in the short to medium term, with production of oil, the backbone of the economy, reaching 2.8m bpd in 2012 and continued budget surpluses forecast for 2013/14. Spending linked to the National Development Plan should help to support the expansion of the non-oil sector, particularly via planned investments in infrastructure and industry. This chapter contains interviews with Bader Al Saad, Managing Director, Kuwait Investment Authority; Faisal Al Ayyar, Vice-Chairman, Kuwait Projects Company; and Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development.