Sign in
Saudi Arabia is expected to remain the largest ins. market in the GCC region for the foreseeable future after dethroning the UAE in 2022, growing at a compounded annual rate of 5.8% to USD 19 bn between 2023 and 2028, said Alpen Capital in its latest ins. industry report.
Thanks to growing demand: Financial advisory firm Alpen based its projections on the Kingdom’s fast moving infrastructure sector and rising demand for automotive and medical coverage.
The regional market in a nutshell: The market’s gross written premium (GWP) is predicted to grow 5.3% in the medium term (until 2028) to USD 44 bn on the back of diversification efforts and a growing population. The majority of the premiums comprises non-life ins. which is expected to expand 5.4% to USD 40 bn over the same period.
Peer markets: Kuwait’s ins. sector is expected to grow at the fastest clip in the region with a CAGR of 6.4% to USD 2.4 bn by 2028, while the UAE’s will expand at a 4.9% clip to USD 18 bn, Qatar (4.8%), Oman (4.5%), and Bahrain (2.6%).
It’s not without challenges: The report highlights that price competition is likely to erode profit margins and higher passed-on risks to reinsurers are likely to squeeze profitability. Automotive and medical ins. are likely to experience disruptions attributed to hikes in claim costs along with higher taxes.
Technological change: “Insurtech is also enabling insurers to provide customized products that cater to individual needs, leading to a further increase in demand for ins.” said Alpen Capital Managing Director Sameena Ahmed. Insurtech is expected to drive innovation in the sector and boost efficiency, she added.
