While the Gulf region in the Middle East is generally seen as oil and construction, the Gulf Cooperation Council (GCC) region has recently seen its insurance industry emerge. To better understand how the industry is developing regionally, the Qatar Financial Center (QFC) Authority conducted a survey entitled "GCC Insurance Biometer."
To conduct the study, they surveyed base executives of insurance providers and intermediaries who were part of either international or local companies operating in the GCC region (including Saudi Arabia, the United States, Oman, Kuwait, Qatar). And Bahrain. Respondents were asked in-depth questions about their predictions of the insurance industry in the region and were asked to identify challenges, strengths, weaknesses, and current opportunities.
Voters are confident that the insurance industry in the GCC region will continue to grow shortly. The regional insurance market is currently valued at 15 billion, with 60% of survey respondents expecting the industry to grow in 2015. However, although survey respondents believe that the insurance industry will drive GDP growth, 60% believe that prices will remain stable on the personal lines of insurance. In comparison, 55% believe that commercial insurance will do the same.
The premium charged by the insurance industry will continue to drive the region's GDP, primarily due to the majority of the population, including the fact that insurance penetration is shallow and there is plenty of opportunities. Regional governments have also been investing in healthcare infrastructure, as Dubai has done with the development of the Dubai Healthcare City.
Due to rising healthcare costs, many GCC countries are debating whether to implement mandatory health insurance measures to help citizens become more aware of their insurance needs. Especially when it comes to medical insurance. Bahrain, for example, saw a 312% increase in insurance premiums between 2001 and 2010, with the most significant increase in demand for medical insurance, while the number of medical insurance policies increased during the decade. I have increased by 1,840%.
The majority of executives interviewed believe that the biggest driver of growth for the insurance sector will be the more effective insurance programs offered by governments. Many countries, such as Bahrain, Qatar, and Dubai, are moving towards health insurance, especially for immigrants.
Given the already strong growth and the ongoing prospect for more compulsory insurance plans, 60% of executives surveyed expect foreign insurers to gain market share in the next two years. Executives have used the capabilities of foreign insurance companies, such as their technical and distribution skills, to work with the foreign population to buy insurance from these companies.
However, some concerns have been raised, with 60% of executives surveyed believing that the regulatory framework in the region is inadequate, with many pointing to the salon ratio and regulations that meet capital requirements. Despite this and other weaknesses and challenges in the market, the overall outlook remains positive. Before the insurance industry grew and there were plans for further development of healthcare infrastructure and more essential health insurance requirements, there were many for both local growth and international investment. Opportunities exist.