Amid challenging underwriting conditions and ongoing market consolidation, the GCC insurance sector continued to adapt and evolve in the third quarter of 2024. While profit growth slowed due to weaker underwriting performance, rising investment income and higher insurance revenue offered a measure of stability to listed insurers across the region.

In this blog, we explore the key developments shaping the GCC insurance landscape in Q3 2024. Drawing insights from the latest GCC Performance Periodical by Insurance Monitor and Lux Actuaries & Consultants, we delve into regional highlights, industry challenges, and the strategic initiatives reshaping the sector’s trajectory.

Market Highlights by Region

UAE: Mounting Losses and Regulatory Challenges

In the UAE, profitability pressures have intensified since H1 2024. Losses for several insurers have escalated, including Al Ain Ahlia Insurance Company (P.S.C) with an increase of AED 37 million and Al Buhaira National Insurance Co. with AED 23 million, largely driven by motor and general insurance lines.

This financial strain has caused solvency ratios to deteriorate further, with at least eight UAE-based insurers breaching regulatory requirements. Collectively, these insurers account for 12% of total insurance revenue for the first nine months of the year. Takaful Emarat-Insurance (P.S.C) is seeking to address its capital deficiencies by increasing its capital to AED 211 million, with the rights issue subscription period ending on 26 November 2024.

Saudi Arabia: Earnings Disparity and Consolidation Efforts

Saudi Arabia’s insurance market highlights a significant earnings disparity. While the top three players benefited from higher investment income, insurers outside this elite group reported a 28% drop in profits due to weaker performance in the medical business.

Several insurers are pursuing capital increases ahead of regulatory deadlines. SALAMA Cooperative Insurance Co. and Saudi Enaya Cooperative Insurance Co. are awaiting shareholder approval for their proposed increases, while other insurers, such as United Cooperative Assurance (UCA), have canceled their plans, citing improved profitability. Mergers are also under evaluation, including the potential consolidation of MEDGULF Saudi Arabia (solvency: 71.2%) with Buruj Cooperative Insurance Company. If completed, this merger could enhance MEDGULF's creditworthiness, according to Moody’s.

Oman: Losses Persist Despite Recovery

Oman’s insurance sector registered total losses of USD 6 million for the first nine months of 2024. However, Liva Group demonstrated a strong recovery in Q3 after incurring substantial weather-related losses earlier in the year, offering some stability to the market.

Qatar: Strategic Shifts and Revenue Growth

Qatar’s insurance market continued to evolve, with Qatar Insurance Group (QATI) seeing a remarkable 60% increase in GWP from regional markets. This growth was largely driven by medical business lines, likely sourced from the UAE.

Region-Wide Growth and Industry Trends 

Despite regional disparities, the GCC insurance market recorded an impressive 13.9% increase in total insurance revenue. Key factors driving this growth include higher rates, mandatory coverage requirements, and ongoing market consolidation.

However, challenges persist, including regulatory pressures and underperformance in key business lines such as motor and medical insurance. Dubai Islamic Insurance & Reinsurance Company (AMAN), for instance, faced significant setbacks in Q3 2024, with both Abu Dhabi National Takaful P.S.C. and Salama Islamic Arab Insurance Co. terminating agreements to acquire AMAN’s insurance portfolios.

Looking Ahead

Reflecting on the developments shaping the GCC insurance market in Q3 2024, it is clear that the region faces both challenges and opportunities. While rising investment income and market consolidation offer a degree of stability, regulatory pressures and performance issues in key business lines continue to shape the sector's trajectory.

For a comprehensive analysis of Q3 2024 performance, we invite you to explore the full Q3 2024 – GCC Performance Periodical by Insurance Monitor and Lux Actuaries & Consultants.

Click here to access the report and gain deeper insights into the evolving dynamics of the GCC insurance market. Don't miss out on the full analysis!