Backed by strong growth opportunities in the GCC, the insurance industry is set to grow and reach approximately $28 billion by the end of 2015 and touch the $40 billion mark by 2017, a report said.

"The GCC enjoys a market size of $16.3 billion in terms of premium volume,” said the report by Kuwait Finance Centre (Markaz), according to the Gulf Daily News.

"As of 2012, the GCC region exhibits an insurance penetration, including life and non-life insurance, of just about 1.14 per cent compared with the global average of 6.5 per cent.

"Nonetheless, the insurance industry in the GCC region is catching up with the global trend and has witnessed a compound annual growth rate of about 18 per cent between 2006 and 2012, compared with the global rate of just 4.37 per cent during the same period," the report added.

"The drivers for the insurance industry in the GCC include the rising income levels, the high amount of expatriate population, the increasing awareness among the population about the benefits of insurance and the government's policies mandating insurance in some sectors," the report said.

"The region also has a favourable demographic trend with youth population projected to grow and the middle-class set to rise in the next few years.

"Takaful Islamic insurance has developed well over the recent years in the GCC region mainly owing to the development of Islamic finance practices, the large Muslim population and changes in consumer patterns post the global financial crisis.

"The life insurance sector has seen a very little growth over the years as the GCC population has primarily relied on the respective governments for absorbing life-related risks.

"Hence the life insurance market was about $2.185 billion as of 2012," the report said.

"The non-life insurance has been the major driver in this region amidst all other sectors with nearly 87 per cent of the premiums being collected in this segment primarily because of increasing business activity in the region and government's plans for economic diversification," the report added. – TradeArabia News Service