“Alpen Capital”: The state will remain the largest insurance market at the level of the “Cooperation Countries”

53 billion dirhams, the size of the insurance sector in the UAE by 2026

The non-life insurance segment in the UAE will grow at a compound annual rate of 4.3%.

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A report by "Alpen Capital" expected that the UAE will remain the largest insurance market in the Gulf Cooperation Council countries, with its share increasing from 44.6% in 2021 to 46.5% by 2026, indicating that the size of the insurance market in the UAE will reach 14.4 billion dollars. (53 billion dirhams) by the same year.

In detail, Alpen Capital, a Dubai-based investment banking consultancy, announced the launch of its latest report on the insurance industry in the UAE and the GCC, yesterday.

The report provides a comprehensive overview of the Gulf insurance sector, recent trends, growth drivers and challenges facing the sector.

The report was launched during a virtual seminar, followed by a discussion session that included Alpen Capital Managing Director Krishna Danak, Secretary General of the Gulf Insurance Federation, Farid Lutfi, and Chairman of Risk Exchange DIFC Limited, Aftab Hassan , in addition to the managing director of Alpen Capital, Smina Ahmed, who managed the virtual seminar.

The UAE is expected to remain the largest insurance market in the GCC, with its share increasing from 44.6% in 2021 to 46.5% by 2026.

The size of the insurance market in the UAE is estimated to reach $14.4 billion (AED 53 billion) by 2026, with a compound annual growth rate of 4.1% from 2021.

It is estimated that the non-life insurance segment in the UAE will grow at a compound annual rate of 4.3% to reach $11 billion by 2026.

The growth of the insurance sector in the UAE will be supported by several factors, including the growth in premiums from compulsory health and motor insurance lines, in addition to the overall increase in insurable assets due to the recovery of business and the development of large-scale infrastructure projects.

In addition to huge government projects, many private sector projects, along with government spending and investment plans, contribute to renewing optimism in the UAE market.

Expo 2020 Dubai helps boost demand and tourist flows to the country, thus supporting the local insurance sector, as well as accelerating growth across the construction, wholesale and retail, travel and tourism sectors in the country.

It is expected that the gross written premiums of non-life insurance in the UAE will remain the largest contributor with a share of 54.5% of the gross written premiums of non-life insurance in the countries of the Gulf Cooperation Council by 2026.

It is estimated that the life insurance segment in the UAE will grow at a compound annual rate of 3.6% to reach $3.5 billion by 2026, driven by the population increase and the increasing level of awareness of the importance of insurance coverage against death risks.

Insurance companies in the UAE are also introducing innovative life insurance products, integrating digital technologies across the value chain.

Such measures are likely to drive the growth of the country's life insurance segment.

As a result, the UAE is sure to maintain its position as the largest insurance market in the Gulf region.

It is expected that the total written premiums of life insurance in the UAE will contribute to about 76.3% of the total written premiums in the Gulf Cooperation Council countries by 2026.

• The sector's growth is supported by several factors, such as premium growth, business recovery, and the development of infrastructure projects.

• 46.5% of the expected share of the UAE from the insurance market at the level of the Cooperation Countries by 2026.

Cooperation countries

Samina Ahmed, Managing Director of Alpen Capital, said: “The insurance sector in the Gulf Cooperation Council countries, which has witnessed a slowdown since the outbreak of the epidemic, is expected to resume its growth against the background of an expected recovery of the economy, renewed confidence in the business sector and the strong economic diversification plans adopted by the Gulf countries. Arabi.

Moreover, the reopening of the tourism sector and the establishment of major events such as Expo 2020 and the FIFA World Cup 2022 are likely to give an additional impetus to growth in the next stage.

Mergers and Acquisitions

Krishna Dhanak, Managing Director of Alpen Capital, said: “M&A within the insurance sector in the GCC remained thriving during 2020. With the reopening of economies, 2021 saw some recovery in the business sector, which led to a resurgence in acquisition activity. and mergers.

The focus is likely to shift towards value-creating opportunities as large companies target SMEs.

This trend will not only enhance competitiveness, but will encourage the development of new products.”

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