DUBAI - The UAE will continue to be the largest insurance market in the GCC in 2015 comprising 50 per cent of the total premium in the region, according to a latest research report.
Overall the UAE insurance sector is expected to grow at a CAGR of 19 per cent reaching $18.3 billion by 2015 with balanced contribution from both Life and Non-Life segment.
Insurance premium to grow at a CAGR of 20 per cent over the next four years to reach $37 billion from $17.8 billion estimates for 2011 in the region, Alpen Capital said in its report on GCC insurance sector.
Non-life insurance will comprise 86 per cent of total premium in 2015 while life insurance will be 14 per cent, contributing $5.2 billion in 2015.
“The GCC insurance industry is going through a challenging phase. There are a large number of players in the market and innovative capability, product diversity including ability to tailor-make products and client focused claims management will be the distinguishing success factors,” said Abdul Muttalib M. Al Jaidi, Chief Executive Officer, Oman Insurance.
UAE and Saudi Arabia are the two biggest markets in the region with 75 per cent (2015) combined share while Qatar is expected to register the fastest growth at a CAGR of 30 per cent from 2011-2015, according to the report.
“To fully capitalise on the growth opportunities in the sector, the GCC insurance companies need to enhance their risk management capabilities and also better manage their investment book,” said Sandeep Nanda, Executive Vice-President, Investments and Treasury, Qatar Insurance Company.
Growth potential of the insurance industry in GCC is tremendous given the relatively low insurance penetration levels, growing population and infrastructure development. The GCC market is currently in its ‘Late development and transition’ stage — focus on health and accident, group medical, and comprehensive motor vehicle insurance.
The region has a very large young population and as it matures the demand for financial products would see a manifold increase.
“In today’s volatile environment, Investment Management is of critical importance to insurance companies worldwide and the situation is no different in the GCC.
In doing so, they need to select a partner that focuses not only on growing their money but can also keep it safe and secure. On another note, anticipated consolidation of the insurance sector could trigger some interesting M&A opportunities in the region,” said Rohit Walia, Executive Vice Chairman & CEO, Alpen Capital and Bank Sarasin-Alpen.
Overall the UAE insurance sector is expected to grow at a CAGR of 19 per cent reaching $18,300 million by 2015. The Life insurance penetration is expected to be around 13 per cent while the Non Life at 13 per cent. The Non Life insurance density would be around $2,738.47 while that of the Life is expected to be around $384.41 in 2015.
In its previous report Alpen Capital had projected insurance market in the UAE to register a CAGR of 14.7 per cent from 2008 to 2012 to reach $8.7 billion in 2012. “We now expect the sector to reach $8.98 billion in 2011,” the report said.
Non-Life insurance is expected to register a CAGR of 19 per cent with a number of the projects which were stalled or cancelled due to the recession, being started again.
Rising population and increasing expatriate population will act as a catalyst for the growth of Life segment which is expected to grow at a CAGR of 19
per cent. The young population, defined as 15-64 years, continues to be a large percentage of the total population.
The new regulations in most of the countries in the GCC now require mandatory insurance for expatriates.
Source:khaleejtimes.com
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