The Middle East & GCC insurance market demonstrated remarkable resilience and solid expansion throughout 2024, fueled by a combination of economic diversification initiatives, sustained population growth, and the strategic expansion of mandatory insurance schemes. The region’s total premiums, encompassing both life and non-life segments, are estimated to have achieved a substantial 8.7% growth in 2024, reflecting a dynamic and expanding sector. The United Arab Emirates and Saudi Arabia continue to be the biggest contributors to this expansion.
The United Arab Emirates has shown phenomenal growth. GWP in the UAE also saw a sharp increase of 21.4% in the year 2024, amounting to AED 64.8 billion (USD 17.6 billion). This phenomenal growth is indicative of the UAE’s dominant position in the regional insurance sector and is a sign of some local factors fueling this phenomenal performance. Saudi Arabia has witnessed a growth of 16.3% in 2024 in gross written premiums, reaching SR 76.1 billion (USD 20.3 billion) compared to SR 65.5 billion (USD 17.5 billion) in 2023.
Growth Drivers
1. Diversification Of Economy
Governments in the region are trying to diversify their economies and reduce their dependency on oil. This goal necessitated massive investment in real estate, large infrastructure projects, tourism, and technology. These new activities generate a big range of insurable risks, thus increasing the insurance demand for property, engineering, and other specialty lines.
2. Applying Mandatory Insurance Programs
The launch and expansion of compulsory insurance, particularly for health insurance coverage, is a key driver. Saudi Arabia and the UAE are the major markets that have been leading in this regard. These initiatives directly increase insurance penetration as more people and institutions obtain insurance policies.
3. Digital Transformation
The insurance industry is now witnessing a massive digital transformation, characterized by large automation investments, AI, and digital platforms. Digitalization is improving the customer experience via facilitating ease of access to the products, offering personalized services through data analysis, and improving claims processing.
4. Population Growth
Strong economic conditions in the GCC introduce an excellent platform for the insurance market expansion. In addition, many GCC countries have an increasing young population with a natural increase in demand for several insurance products.
5. Risk Awareness
People and businesses increasingly have a need for financial security and risk management. This awareness requires an increased understanding of the value that insurance provides for families, property, and business continuity.
6. New Insurance Products & Solutions
The industry is addressing changing requirements by introducing new and specialized insurance coverages. This reflects the increasing demand for Takaful (Islamic insurance) products, along with new features such as cyber insurance and parametric insurance to cover developing risk.
Challenges
- Aggressive Market Competition, Fragmentation, and Pricing Pressures.
- Evolving regulations and compliance costs
- Geopolitical factors and global economic uncertainties
- Climate change, natural catastrophe exposure, and underwriting profitability.
- Cybersecurity Risks.
- Underwriting pressures and thin margins.
Opportunities
Despite the above challenges, the Middle East and GCC insurance markets will continue offering plenty of opportunities for insurers who can stay flexible and innovative. Some of the foreseen opportunities include, but are not limited to,
- Growth through Mergers & Acquisitions (M&A)
- Technological innovation.
- Customer experience.
- Development of specialized insurance products.
- Leveraging Economic Diversification
Emerging Insurance Products
The emerging risk landscape, along with high-level customer expectations in the Middle East and GCC, is increasing the demand for innovative insurance products. Several new products are rising and offer significant growth opportunities.
1. Cyber Insurance
The rapid digitization in the region has pushed the rise in cyber-attack threats. Companies recognize the need for financial protection from such risks. Cyber insurance, which was previously limited to financial institutions, is now expanding into energy, aviation, logistics, government, and small and medium-sized enterprises (SMEs). Cyber policies are developing from basic third-party liability to offer broader coverage, including breach response costs, regulatory fines, crisis communications fees, and business interruption loss resulting from cyber-attacks.
2. Parametric Insurance
Parametric insurance transfers risk through pre-agreed payments activated by measurable events instead of actual losses. Triggers may be storm intensity, rainfall amount, or earthquake intensity. Parametric solutions provide fast payment—within days or weeks—of triggering events for immediate liquidity to policyholders. This type of coverage is especially useful for natural disasters like floods and storms and can include indirect losses or business interruption that might not be appropriately addressed under traditional indemnity policies.
3. Takaful Insurance
Takaful (Shariah-compliant) insurance is a significant growing segment of the insurance market, particularly in the Middle East and GCC, where there is strong demand for financial products that are aligned with Islamic standards.
4. Embedded Insurance – Integration Into Customer Journeys
Embedded insurance is emerging as a strategic distribution play. The insurance products are embedded directly into the purchase process of non-insurance products or services. Insurance is offered at the point of sale, for example, while a consumer is booking travel, purchasing electronics, or using a ride-hailing platform. This model enhances access to insurance, provides timely cover, and supports a higher penetration ratio.
As the insurance markets in the Middle East and GCC continue to develop and expand, the role of insurance brokers and consultants becomes increasingly significant. As more people and businesses seek coverage due to factors like population growth, economic transformation, and the expansion of mandatory insurance programs, there has never been a greater need for trustworthy, knowledgeable advice.
At Associated Alliance, we take pride in offering our added value, which is supported by our broad regional reach, global capabilities, and in-depth local market knowledge. Our goal shall always remain providing our partners with correct products, technical know-how, and risk solutions tailored to their specific industry and location. easily accessible.
Associated Alliance streamlines the process in a market where new and frequently sophisticated products such as parametric coverage, cyber insurance, and Takaful (Shariah-compliant) are becoming more popular. Our role is much more than just policy placement; we are strategic advisors, assisting clients in managing changing risks, creating efficient insurance plans, and putting long-term risk management plans into action that are flexible and in line with their corporate objectives.
