The GCC insurance industry is expected to be worth $28 billion (Dh102.7 billion) by the end of 2015, and $40 billion by 2017, a report by Kuwait Financial Centre (Markaz) indicates.
The industry saw a CAGR (compound annual growth rate) of 18 per cent between 2006 and 2012, compared to the global CAGR of 4.37 per cent for the corresponding period, it said.
The main drivers of the regional industry’s growth include higher income levels, a large expatriate population, rising awareness of the benefits of insurance, and the governments mandating insurance in certain sectors.
Non-life insurance has been the prime driver of the industry, amounting to $14.1 billion in the GCC last year. Almost 87 per cent of premiums are collected in this segment as a result of higher business activity in the region and government’s plans to diversify the economy.
Health care issues
Health insurance, too, is becoming popular in the GCC, driven by population growth and increasing awareness of health care issues. The region’s health insurance industry is valued at $4.69 billion in terms of premium volume, the report said.
Also, Takaful Islamic Insurance has grown in the region in the last few years as a result of the development of Islamic finance practices, a large Muslim population, and changing consumer behavior after the financial crisis of 2008.
However, the life insurance sector registered little growth in past years due to the GCC populations’ reliance on their government to absorb life-related risks. The life insurance market was worth $2.185 billion in 2012.
The report suggests that for the industry to grow operators should offer customers customized products online.