The GCC insurance market is rapidly evolving as expatriates choose to call the UAE and surrounding regions ‘home’ for longer periods of time and invest more in business and homes than they have in the past, an expert said.

“With expats staying longer, we are seeing rising interest in comprehensive wealth management and life insurance products,” commented Michael Walton, director of General Insurance at Nexus Group of Companies.

The GCC has witnessed a fast rise in the standard of products and services insurers offer due to the expanded presence of international businesses, global financial institutions and locally developed companies. 

'More working expats are adopting the mentality of entrepreneurs and are willing to invest in commercial and trading opportunities,' he noted.

Walton pointed out that banks, wealth management firms, insurers and financial advisors must identify challenges that could arise as the industry expands and new government regulations come in to place.

One of the key challenges insurers face in the UAE and across the region is the limited market penetration of life insurance and non-life covers.

Although these are changing trends, it is still paramount to raise awareness, educate customers and offer standardised products.

“Market analysts strongly believe that life insurance plays a key role to raise the level of savings in an economy, plus channel savings as funds into the capital market. Regional economists understand this and look to encourage the penetration of life insurance in the Middle East,” he added.

Individual economies in the GCC have expanded over the past decade along with industry growth mainly in the construction and property sector.

With rising demand for offering wealth management products, life insurers are leveraging growth opportunities through designing attractive products for the consumer segment of the wealth management sector.

However, external market elements such as fluctuations in major economies are pushing customers to look for proficient insurance and investment experts to help channel their investments, he noted.

Due to volatile markets, insurers are under more pressure to identify high yield investment opportunities while assessing the level of risk involved.

'Additionally, expanding business opportunities across the GCC have led to the growth of the small business sector. Financial advisors must monitor their clients’ risk potential while promoting private entrepreneurship and risk-taking.'

According to Walton, new government regulations like healthcare laws create public interest to understand the benefits insurance provides.

Keeping abreast of local laws is important for product developers who need to offer customers policies and covers that meet new mandatory requirements. Private insurers need to find a balance between mandatory products that should be offered and commercial covers developed to suit market conditions and demand,” he noted.

“As international and local insurers compete for larger market shares, their audience is becoming more economically aware, globally connected and sophisticated in their demands,” Walton added.-TradeArabia News Service