This Business Intelligence (BI) report aims to provide a comprehensive analysis of the potential for life assurance business in the Middle East. The data for this report was collected from various sources, including government statistics, financial institutions, and industry reports.
SUMMARY OF FINDINGS
The Middle East is a rapidly growing market for life assurance, with projected annual growth rates of 5-7% over the next five years. The region has a relatively low penetration of life assurance products, with less than 20% of the population having coverage.
The increasing wealth and economic development in the region are driving demand for life assurance products, as well as a growing awareness of the importance of financial planning and protection.
Market share of the top five non-life insurers in the Middle East and North Africa between 2014 and 2015, by country
OPPORTUNITIES
The growing middle class in the Middle East presents a significant opportunity for life assurance companies, as they are more likely to have the disposable income and financial literacy to purchase such products.
The increasing number of expatriates in the region also presents an opportunity, as they may be more familiar with and interested in life assurance products. The governments in the region are also making efforts to encourage the use of life assurance, such as through the introduction of mandatory savings schemes.
CHALLENGES
The lack of financial literacy and awareness of life assurance products in the region can be a significant challenge for companies looking to enter the market.
The cultural and religious beliefs in some countries of the region also present challenges, as some may view life assurance as contrary to Islamic principles. The regulatory environment in some countries can also be a challenge, with varying levels of oversight and protection for consumers.
It is worth briefly noting however, that over 1.6 trillion U.S. dollars worth of Islamic financial assets were held in 2021 by the Gulf Cooperation Council (as indicated in the graph below). A total of 94 percent of the assets in the Islamic financial services industry are concentrated in Asia, Middle East, and South Asia. All together, these three regions account for an estimated 1.45 trillion U.S. dollars worth of assets
Assets of Islamic financial services worldwide in 2021, by region (in billion U.S. dollars)
CONCLUSION
In conclusion, the Middle East presents a significant opportunity for the life assurance industry, with projected annual growth rates of 5-7% and a relatively low penetration of life assurance products.
The growing middle class and increasing number of expatriates in the region, as well as government efforts to encourage the use of life assurance, present significant opportunities for companies looking to enter the market.
However, challenges such as lack of financial literacy, cultural and religious beliefs, and regulatory environment must be taken into account when entering the market.
From my personal point of view, it's definitely worth a crack if there's both a long-term economic commitment and long-term business vision.
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