The insurance market in the Gulf Cooperation Council (GCC) is expected to grow over the coming years as more countries implement mandatory health insurance cover, the population increases and the economy experiences a revival, a report predicts.
Health insurance remains one of the most important business lines in the GCC and will continue to drive the insurance market across the region, according to the report by Alpen Capital (ME) Limited.
Currently, GCC countries are each at different stages of rolling out mandatory health insurance, which is likely to come into effect in 2020.
Sameena Ahmad, managing director of Alpen Capital (ME) Limited, said a steady rise in the population, coupled with an increase in older people within the region, is expected to boost health insurance premiums.
According to the Dubai-headquartered investment banking advisory firm, the GCC insurance market is projected to grow at a compound annual growth rate (CAGR) of 4.3% from US$29.2bn in 2019 to US$36.1bn in 2024.
The gradual slowdown of the insurance industry witnessed over the past two years is likely to continue until 2024, however GWP is expected to improve relative to the subdued levels of growth recorded in the recent past, as long-term growth prospects continue to remain positive.
Insurance penetration in the region is expected to remain between 1.8% and 1.9% from 2019 to 2024, below the global average of 6.1%, offering scope for growth in the sector, the report said.
Life insurance GWP is projected to grow at a CAGR of 4.9% to reach US$4.7bn in 2024. The non-life insurance market is expected to grow at a CAGR of 4.3%, primarily aided by mandatory insurance business lines, new regulations improving the pricing of policies, an anticipated recovery in economic activity, and a subsequent rise in infrastructure investments.
The non-life segment will continue to comprise 86.9% of the total insurance market at US$31.4bn in 2024.