Gargash Insurance: The UAE insurance sector is poised for significant growth in 2024
The insurance industry in the UAE is set to witness substantial growth this year, driven by economic expansion and a flourishing workforce, as stated by Mustafa O. Vazayil, Managing Director of Gargash Insurance.
The UAE has emerged as a preferred destination for both work and leisure, witnessing an increase in the middle and upper-middle-class population segments, along with entrepreneurs, professionals, and families opting to reside and work in the Emirates.
This demographic shift has led to a surge in demand for various insurance products, such as auto, travel, medical, and home insurance. Vazayil predicts an annualized growth rate of 10 to 15 percent for personal and commercial insurance lines over the next few years, with a potential 15 percent growth rate if geopolitical stability persists.
To capitalize on this growth opportunity, insurance companies need to adapt to evolving customer preferences by investing in digitalization and mobile-friendly platforms. Vazayil emphasizes the importance of providing convenient digital solutions to customers, particularly in the personal insurance segment.
Despite the growth prospects, the insurance sector faces challenges such as escalating operational costs, including rising rents and human resource expenses. To mitigate these challenges, insurers must leverage technology to optimize resource utilization and enhance operational efficiency.
In the commercial insurance segment, property insurance is expected to experience double-digit growth, driven by infrastructure and construction projects aimed at accommodating the UAE's growing population. Liability insurance is also on the rise as businesses with global risk exposure establish their presence in the UAE. Additionally, the demand for medical insurance is expected to surge, especially with the potential mandate for medical coverage in the Northern Emirates.
Furthermore, there is a growing demand for cyber insurance due to the increasing prevalence of cyber threats across industries.
As Gargash Insurance celebrates its 30th anniversary, Vazayil expresses optimism about the company's performance, aiming to surpass the 15 percent growth achieved in 2023. Alpen Capital's research corroborates this optimism, projecting strong growth for the UAE insurance sector, reaching $17.9 billion by 2028.
Looking ahead, the insurance industry faces regulatory changes such as the implementation of IFRS 17, aimed at enhancing fiscal discipline and aligning with global accounting standards. Despite these challenges, Vazayil remains bullish about the industry's growth prospects, including expansion into other GCC markets and Central Asia and potential public listings in the future.
