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Major Expansion Expected Within the GCC Insurance Sector

Middle East : 15 February 2011

Experts say that the GCC insurance sector is on course for major growth along with the regional economies.

Krishnan Kavasseri, audit & advisory director for financial services giant KPMG, stated that both individuals and businesses should expect to see the insurance industry surge in the coming years.

Right now there is only a small percentage of GDP spent on insurance products, Kavasseri noted.

Although the GCC remains behind nations like Taiwan those conditions are set to change.

Middle East residents are now enjoying disposable income and will soon look to life insurance policies as a method of savings and as a way to provide for the education of their children and create pensions for their retirement.

As those in the Middle East get wealthier there should also be an increase in healthcare expenditures, causing the industry to grow as businesses offer their employees healthcare insurance packages as part of their wages.

People within the GCC still see insurance as only a minor issue, although that will change swiftly as they begin to see that it is not only for protection but is also an excellent savings vehicle for their future, according to Kavasseri.

Residents in the region are beginning to understand that insurance protects their lifestyle, in retirement as well as if an injury or accident occurs. This has caused the insurance industry to draw in investments.

Kavasseri noted that the local tendency to place more trust in the domestic firms than in international giants will help to strengthen the regional industry.

The current structure includes many small players, meaning that consolidation is necessary to drive the market, both within a specific area and across regional borders.

Kavasseri stated that the GCC insurance industry faces numerous issues that need addressing.

He mentioned that a more focused approach to marketing is necessary, as well as a greater effort in customer service.

He also noted that there is a lack of skilled personnel in the industry, which needs to be remedied as firms move forward. There is a massive potential for growth in the regional insurance industry, especially within the collection of takaful products that are compliant with Sharia law.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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