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July 2013

Alpen Capital´s research report on the GCC Insurance Sector assesses the current market scenario in all GCC countries in order to understand demand-supply dynamics, growth drivers and future outlook and analyzes the performance of the industry players.

The insurance industry in the Gulf Cooperation Council (GCC) has experienced steady growth on the back of economic development, population expansion, improved regulatory environment, and increased product awareness. The region´s insurance sector is also expected to structurally mature going forward, in line with positive regulatory developments and efforts by some players towards attaining greater operational scale and efficiency.

Industry Outlook

Alpen Capital estimates that the Insurance industry in the GCC is projected to expand at a compounded annual growth rate (CAGR) of 18.1% between 2012 and 2017 to reach a size of US$ 37.5 billion, split between life (US$ 2.4 billion) and non-life (US$ 35.1 billion) segments.

The life insurance segment is expected to grow at an annual average rate of around 2% during this period. However, the non-life segment is forecast to expand at a much higher rate of 20.0% annually, thus increasing its share in the regional market from 86.6% in 2012 to 93.6% in 2017.

The insurance penetration in the GCC is expected to improve from 1.1% in 2012 to 2.0% in 2017 , as industry growth comfortably exceeds the pace of GDP expansion. Non-life insurance penetration, which is likely to surge from 0.9% to 1.9% during the period, is seen as the main driving factor.

By 2017, insurance density in the Gulf is anticipated to more than double from the 2012 level as increased number of people and businesses avail insurance cover. Industry-wide density is likely to increase from US$ 367.3 in 2012 to US$ 751.4 in 2017. However, the gap between density in the life insurance and non-life segments is projected to widen substantially, going forward.

United Arab Emirates (UAE) and Saudi Arabia remain the largest insurance markets in the GCC while Saudi Arabia may surpass the United Arab Emirates (UAE) as the largest insurance market in the region going forward. The Saudi insurance industry is seen as a major driver behind growth of the GCC insurance industry as it is anticipated to expand at a CAGR of 26.5% between 2012 and 2017.

For more details please click here to access the complete version of the GCC Insurance Industry Report July 2013.