GCC: Better collaboration between regulators and industry players to boost insurance

Source: Middle East Insurance Review | Jan 2020

Regulators across the GCC are increasingly collaborating with insurers to educate consumers on protection and risk-mitigating insurance offerings to make a positive impact on the development of the industry, said Alpen Capital (ME), a Dubai-headquartered investment banking advisory firm, in a report on the region’s insurance industry.

Apart from industry stakeholders collaborating to drive consumer awareness, the report highlighted other trends in the region’s insurance industry:

Growing consolidation: High operating costs, combined with a strengthening regulatory environment, is driving the GCC insurance sector towards consolidation. Smaller companies may be compelled to merge with stronger players to strengthen their capital base and enhance product offerings in a highly competitive industry.
Influx of foreign players in onshore financial centres: The influx of foreign operators will facilitate the evolution of the GCC insurance industry as new entrants expand their product offerings and streamline business operations. With no restrictions on foreign ownership, onshore financial centres such as the DIFC and QFC have emerged as a hub for foreign insurers, reinsurers and intermediaries.
Continued popularity of bancassurance: The bancassurance segment continues to gain traction, particularly in the UAE. With falling interest rates and declining credit growth, GCC banks are offering insurance as part of their wealth management services or bundling them with mortgage or personal loans.
Digitisation and technological advancements: As insurance aggregators gain importance, insurers in the GCC are establishing their presence across multiple platforms (websites, social media pages, digital kiosks and mobile apps) to interact with new-age customers. The increasing adoption of technologies will stimulate regional operators to develop technological capabilities or collaborate with InsurTech companies.

In addition, the GCC insurance industry landscape is maturing as regional governments consistently seek to enhance the regulatory environment to improve compliance and create sustainable business models, the report said. M

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