UAE News Today : Business

GCC insurance sector expected to reach $44.4 billion by 2028

Saudi Arabia has become the GCC’s largest insurance market, surpassing the United Arab Emirates.

A recent report from Alpine capital, a UAE-based investment banking advisory firm, predicts significant growth in the GCC insurance sector. By 2028, gross written premium (GWP) is expected to reach around $44.4 billion. The report forecasts a steady rise, with GWP rising at a compound annual growth rate (CAGR) of 5.3%.

In particular, the non-life insurance segment is expected to drive much of this growth, with a projected CAGR of 5.4% between 2023 and 2028. This segment is expected to reach $39.6 billion in 2028, which constitutes approximately 89.2% of the region’s GDP.

Sameena Ahmad, CEO of Alpen Capitalcommented on the findings, stating,

“The GCC insurance industry has seen steady growth in recent times, thanks to economic recovery following the COVID-19 slowdown and the successful adoption of compulsory health insurance across GCC nations.”

Ahmad He emphasized that sustained economic diversification, demographic expansion and significant infrastructure development are factors contributing to the sector’s optimistic outlook.

Saudi Arabia the largest insurance market

According Alpine capitalThe GCC insurance market is projected to experience strong growth, driven by factors such as resilient economic expansion, population growth and rising demand for health and life insurance, along with ongoing infrastructure projects.

Significantly, Saudi Arabia has taken the lead as the GCC’s largest insurance market, surpassing the UAE, with expectations of sustained growth. The kingdom’s insurance sector is being boosted by extensive infrastructure development and growing demand for health and motor insurance, as highlighted in the report.

GCC INSURANCE MARKET - COUNTRIES

The firm has projected a compound annual growth rate (CAGR) of 5.8 percent for Saudi Arabia between 2023 and 2038.

For the UAE, the insurance market is expected to grow at a CAGR of 4.9 percent. Meanwhile, Kuwait is expected to experience the highest growth rate in the GCC, with a CAGR of 6.4 percent. This growth is attributed to continued population expansion between 2023 and 2028 and increased government investments in infrastructure.

Krishna Dhanak, also from Alpen Capital, highlighted the increase in mergers and acquisitions (mergers and acquisitions) activities within the GCC insurance industry. These activities are driven by strategic expansion plans, regulatory changes and increasing operating expenses.

Dhanak In addition, he highlighted a growing interest in investing in technologies such as Artificial Intelligence, Internet of Things and blockchain. These investments aim to improve customer service and prevent fraudulent claims within the industry.

Challenges

However, the industry faces challenges, including fragmented and highly competitive markets, complex accounting frameworks, and disruptions in the reinsurance market.

  • A fragmented and highly competitive market encourages price competition, posing threats to insurers’ profit margins.
  • The implementation of IFRS 17 introduces complex accounting frameworks, challenging midsize suppliers to adapt existing processes.
  • Rising cession rates and a tightening reinsurance market are disrupting business models, impacting reinsurance revenues and underwriting margins.
  • Claims inflation and rising tax rates potentially impact core business lines, particularly the motor and health insurance segments, crucial to the GWP of GCC insurers.

Despite these challenges, the early adoption of digital transformation in the GCC region presents opportunities for insurers to improve customer experience and develop innovative products.

The GCC insurance industry is at an important juncture, driven by demographic changes, economic factors and technological advances. With supportive government regulations and a focus on operational efficiency, the region should see a sustainable business model amid continued evolution.

News source: Gulf Business

Social Links : Facebook : Twitter : Youtube  : Linkedin  : Instagram : Pinterest : TikTok : Wordpress : Google : Blogger : Medium : All-Online-Marketing.com

Our Partners : internetmarketingseo2.info : freelanceseoguru.com : aditechseoservices.com : bestwebdesigners.info : cheapwebhosting247.com : webdesigndubai.pro : thewebhostingreview.info : wolfspiritwebdesign.com : traffic-exchange-reviews.info : bluerosewebsitedesign.com : bestbusinessdirectory.org : websitedesigningcompanyindubai.com : breakingnewstoday.info : fastreviews.org : topvideoshare.com : onlinefinancialtrading.com : onlinelivenews24.com : freeweightlossguideonline.com : bestbusinessdirectory.org : startonlinebusiness.info : passiveincomeformula.net : superbusinessservices.com : dubaishoppingoffers.com : alldubai.ae : alluae.ae : ione.ae :

UAE News Today : OnlineLiveNews24.com

UAE News Today : Latest UAE News, Dubai, Abu Dhabi, Sharjah & Middle East News : Get the latest updates & breaking headlines news from across the UAE including Dubai and Abu Dhabi UAE. Get the latest update on UAE, business, life style, UAE jobs, gold rate, Exchange rate, UAE holidays, Dubai police, RTA and prayer times from UAE's largest news. https://all-online-marketing.com/

Related Articles

Back to top button