UAE general insurance market set for 13.2% growth this year
UAE general insurance market set for 13.2% growth this year | Insurance Business Asia
Insurance News
UAE general insurance market set for 13.2% growth this year
Growth attributed to regulatory developments and rising insurance premium rates
Insurance News
By
Kenneth Araullo
The general insurance market in the United Arab Emirates (UAE) is expected to grow by 13.2% this year, stemming from regulatory developments and rising insurance premium rates.
A new forecast from GlobalData revealed that the general insurance market in the country accounted for 82.3% of UAE’s conventional insurance sector in 2022. The whole insurance market itself is expected to get major gains in the next five years thanks to rising health premiums after the introduction of mandatory health insurance.
GlobalData senior insurance analyst Swarup Kumar Sahoo said that the health business will be the major driver for the sector starting this year.
“Health insurance, which was made mandatory in Abu Dhabi in 2006 and Dubai in 2014, has also been made mandatory across the UAE in the first quarter of 2023. As a result, health insurance is expected to play a major role in driving the overall general insurance growth starting 2023,” Sahoo said.
Leading the general insurance line is personal accident and health insurance, accounting for 57.6% of the gross written premiums (GWP) in 2022. The sector’s compound annual growth rate (CAGR) was 3.5% during the brunt of the pandemic (2018-2022), with expectations that it will rise to 11.7% in 2022 to 2027. As health insurance becomes mandatory this year, it’s expected to grow by 17.1% on a YoY basis.
“An increase in the average health insurance premium will also drive the growth of personal accident and health insurance in 2023. The health insurance premium increased due to the growth in claims following COVID-19 and high inflation in the country. The average health insurance premium grew by 6% during Q1 2022 and Q3 2022 and by 5% between Q3 2022 and Q4 2022, further grew by 20% during Q4 2022 and Q1 2023,” Sahoo said.
Property, motor coming in at second and third
The study further found that property insurance comes in as the second-largest general insurance line, making up 16.2% of the GWP last year. Motor insurance comes in at third, accounting for 11.8% of the GWP in 2022.
As for the remaining lines of business, 10.1% of the remaining 14.4% comes from miscellaneous lines. Unemployment insurance, which was also made mandatory in 2023, will further support the miscellaneous line for a CAGR of 5.9% in 2022 to 2027.
“Post-COVID developments such as the introduction of mandatory health insurance and the rise in health insurance policy prices are expected to drive the UAE general insurance market to grow at a CAGR of 9.6% from AED34.6 billion ($9.4 billion) in 2022 to AED54.8 billion ($14.9 billion) in 2027,” Sahoo said.
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