Property and Casualty Insurance Market in the United Arab Emirates - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Property and Casualty Insurance Market in the United Arab Emirates - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• The property and casualty insurance market in the United Arab Emirates is estimated to register a CAGR of approximately 4% during the forecast period.
• The United Arab Emirates continued to rank as the largest insurance market in the MENA region for more than a decade, and it stood at 37th globally in terms of the GWP during 2017-18. A well-diversified economy, strong demographics, including a high proportion of expatriate population, introduction of mandatory health and motor insurance, and an overhaul of the regulatory environment have been some of the major driving forces of the country’s insurance industry. Additionally, strong government-led infrastructure stimulus and increased construction activities, to the run up to Expo 2020, are augmenting the growth of the industry
• The insurance sector in the United Arab Emirates is one of the most active sectors because of its vital role in serving the national economy, which is reflected in the growth rate of its contribution to GDP (that reached 3% for 2018). In 2018, the gross written premium in all the classes of property and liability insurance was AED 15.1 billion, with the national companies' share of 74.6%, which valued at AED 11.3 billion. The share of foreign companies is 25.4%, valuing at AED 3.8 billion. The non-life insurance segment accounted for 77.1% of the total GWP (gross written premium) in 2018.
• As of 2018, the overall insurance penetration in the United Arab Emirates was at 2.9%. The country has the highest insurance density across the GCC countries, valuing at USD 1,194.7. One of the primary drivers for this growth was the introduction of high and unified motor premium rates.
• The UAE regulatory framework is amongst the most progressive in the GCC region, and it continues to strengthen with the adoption of international best practices. Motor insurance is mandatory in the United Arab Emirates.
• Non-life business lines, such as property and fire insurance, are likely to continue to gain prominence with the rise in awareness for risk coverage and the government’s increased focus on infrastructure development, as part of its Vision 2021.

Key Market TrendsGrowing Consolidation

High operating costs, combined with a strengthening regulatory environment, are driving the GCC insurance sector toward consolidation. As a result, the share of the top 20 listed insurance companies in the region (based on GWP) increased from 50.9% in 2016 to 57.9% in 2018. The region witnessed 22 mergers and acquisitions (including on-going deals) between 2017 and Q3 2019. There were eight deals in the United Arab Emirates and six in Saudi Arabia, cumulatively accounting for approximately 64% of the total deal volume. In 2019 alone, the region observed six mergers and acquisitions, and this trend is expected to continue, to enable firms to increase their operational efficiencies and reduce costs.

The United Arab Emirates has the Highest Insurance Penetration across GCC Countries

Insurance penetration in the individual GCC markets differ significantly, with the United Arab Emirates averaging at 2.9%, followed by Bahrain (1.9%), Qatar (1.6%), Oman (1.4%), and Saudi Arabia (1.2%). Kuwait recorded the lowest average insurance penetration, at 0.9%, in 2018. Low penetration is primarily attributed to low awareness regarding the importance of insurance products and the relatively underdeveloped life insurance market. Moreover, monetary support provided to nationals in the region make the need for insurance redundant for that segment of the population. In the United Arab Emirates, the rate of insurance penetration remains the highest compared to other GCC countries, largely owing to the diversified population base, which majorly comprises expatriates, and the rollout of mandatory health and motor insurance schemes.

Competitive Landscape

The report covers the major players operating in the Property and casualty insurance market in UAE. The market is Consolidated, the market is expected to grow during the forecast period due to increase in M&A activities and other few factors.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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