UAE Insurance Sector Generates 7.2 Billion Dollar Revenues in 2012 – Highest in GCC

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UAE leads GCC insurance sector achieving 45% of the premiums and $7.2 billionUAE Industry Sector Generates 7.2 Billion Dollar Revenues in 2012 – Highest in GCC revenues in 2012. An analyst from Moody’s Investor Service said that the country has grown marginally sharp than the average in GCC with a six-year compounded annual growth rate of 17%.
UAE’s insurance access is now higher than most GCC countries at 2% of the gross domestic product, albeit still modest compared to advanced economies.
Highlighting on the study, among 63 insurers (61 primary insurers and two re-insurers) in 2012, insurance companies in the UAE are more than equipped to reap the benefit of the market’s potential growth.
“Excluding the top five local groups, average premiums per insurer in 2012 stood at approximately $83 million. This indicates a considerable level of industry over-capacity, which depresses the market’s overall performance. Further consolidation or the exit of players is necessary to enhance market stability,” the study reported.
Further, the UAE Insurance Authority already opened up its concern on over-capacity and announced its desire to see mergers in the market.
The GCC insurance industry had more than doubled approximately 2006-12 with insurance premiums increasing to $16.3 billion from $6.4 billion, the report added.
“The GCC remains a small insurance region from a global perspective, collectively accounting for less than 0.4 per cent of global premiums, but the region has been one of the fastest growing, with average annual revenue growth of 16.8 per cent over the past 6 years. We expect significant further growth over the near-to-medium term,” the analyst said.
“We expect that the region will continue to grow at similarly strong rates over the near to medium term. Growth will be driven by, inter-alia, increased economic wealth in the region, together with an increase in insurance penetration levels,” he added.
Summing up, the 2012 premiums of these six countries equated to $16.3 billion, broadly similar to the size of the Portuguese insurance market.