The Gulf Cooperation Council (GCC) remains the fastest growing insurance region, outpacing all other markets with top line growth of close to 15 percent in 2014, according to a Moody’s Investors Service report.
The GCC is made up of six countries, including, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.
The report, GCC Insurance Industry: Growing Economy Will Drive Further Market Growth Over Next Two Years, found that the GCC insurance industry has more than tripled between 2006 and 2014, with insurance premiums increasing to $22.2 billion from $6.4 billion.
This increase represents a compound annual growth rate (CAGR) of 16.8 percent over the period, although growth in each market varies, ranging from 20.7 percent CAGR in Qatar to 6.4 percent CAGR in Kuwait.
Mohammed Ali Londe, Moody's assistant vice president and analyst, commented: "The positive growth outlook on the region will continue to attract insurers—both domestic and foreign—to invest in the GCC markets, but this is likely to increase competition and put even further pressure in what is already a weak-to-average profitability in the sector.”
"However insurers in the region are generally strongly capitalised and possible future pressure on profitability is unlikely to reduce the credit strength of the sector in the medium term."
Moody’s expects that the GCC will continue to grow at the same strong rates over the next two years and believes that the growth will be driven by increased economic wealth in the region, together with increased insurance penetration.
