GCC insurance sector growth soars: $44.4bn projection by 2028

GCC insurance sector growth soars: $44.4bn projection by 2028

Image credit: Getty Images

In a recent report released by UAE-based investment banking advisory firm, Alpen Capital, the projected growth trajectory of the Gross Written Premium (GWP) in the GCC insurance sector is expected to reach an estimated $44.4bn by 2028.

According to the firm’s latest GCC Insurance Industry report, the GWP of the region is anticipated to climb at a Compound Annual Growth Rate (CAGR) of 5.3 per cent to cross the $44bn mark.

The report highlights that non-life insurance segment is expected to spearhead this growth, projected to expand at a CAGR of 5.4 per cent between 2023 and 2028, ultimately reaching $39.6bn, accounting for 89.2 per cent of the region’s GWP by 2028.

Image credit: Alpen Capital

Commenting on the findings, Sameena Ahmad, managing director at Alpen Capital, remarked, “The GCC insurance industry has experienced consistent growth in recent years, buoyed by economic rebound post-COVID-19 slowdown and successful implementation of mandatory health insurance across GCC countries.”

Ahmad highlighted sustained economic diversification, population growth, and substantial infrastructure development as driving forces behind the sector’s positive trajectory.

Saudi Arabia the largest insurance market

According to Alpen Capital’s projections, the GCC insurance market is poised for robust growth, fueled by factors such as resilient economic growth, increasing population, and rising demand for health and life insurance, alongside ongoing infrastructure development projects.

Notably, Saudi Arabia has emerged as the largest insurance market in the GCC, surpassing the UAE, with expectations for continued growth. The kingdom’s insurance sector is being driven by massive infrastructure development and an increasing demand for motor and medical insurance, notes the report.

Image credit: Alpen Capital

The firm has forecast a CAGR of 5.8 per cent for Saudi Arabia between 2023 and 2038.

The UAE’s insurance market is expected to grow at a CAGR of 4.9 per cent, while Kuwait is projected to witness the highest growth rate in the GCC at a CAGR of 6.4 per cent, attributed to steady population growth between 2023 and 2028 and increased government investments in infrastructure.

Krishna Dhanak, also from Alpen Capital, underscored the surge in M&A activities within the GCC insurance industry, driven by strategic expansion plans, regulatory changes, and increased operating expenses.

Dhanak noted a growing interest in investment in technologies such as Artificial Intelligence, Internet of Things, and blockchain to enhance customer support and prevent fraudulent claims.


However, the industry faces challenges, including fragmented and highly competitive markets, complex accounting frameworks, and disruptions in the reinsurance market.

  • Fragmented and highly competitive market fosters price competition, posing profit margin threats for insurers.
  • Implementation of IFRS 17 standard introduces complex accounting frameworks, challenging medium-sized providers to adapt existing processes.
  • Rising cession rates and hardening of reinsurance market disrupt business models, impacting reinsurance revenues and underwriting margins.
  • Claims inflation and increasing tax rates potentially impact core business lines, notably motor and medical insurance segments crucial for GCC insurers’ GWP.

Despite these challenges, the GCC region’s early adoption of digital transformation presents opportunities for insurers to enhance customer experience and develop innovative products.

The GCC insurance industry stands at an important juncture, driven by demographic shifts, economic factors, and technological advancements. With supportive government regulations and a focus on operational efficiency, the region should see a sustainable business model amidst ongoing evolution.

Read: Dubai D33 agenda on track, GDP growth rises 3.3% from Jan-Sep 2023


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