Middle East & Africa Life and Non-Life Insurance Market Outlook, 2029

The Life and non-life insurance industry in the Middle East & Africa (MEA) region boasts a rich heritage spanning over a century, yet it has adeptly evolved to meet the ever-changing needs of the modern era. Its origins can be traced back to the early 1900s when international insurers ventured into the region to cater to the burgeoning trade and commercial activities, primarily offering marine cargo and property insurance solutions. As the 20th century progressed, the industry's trajectory mirrored the region's economic diversification and industrialization. The booming oil and gas sector propelled the demand for specialized coverages, such as energy risk and liability insurance.

In recent decades, the non-life insurance industry has demonstrated remarkable adaptability, seamlessly aligning its offerings with the region's evolving risk landscape. The trend has been the surge in construction and infrastructure insurance, fueled by the region's ambitious megaprojects, such as smart city developments, transportation networks, and large-scale construction initiatives. Insurers have responded by offering comprehensive solutions, including construction risk insurance, project liability coverage, and professional indemnity protection.

The digital transformation sweeping across the region has given rise to the need for cyber risk insurance, safeguarding businesses against potential data breaches, cyber-attacks, and other digital threats. Moreover, to cater to the region's growing Muslim population, several insurers have introduced Takaful products, which operate based on Islamic principles of risk-sharing and mutual cooperation. The industry's adaptability is further exemplified by its embrace of digital technologies, such as online platforms, mobile applications, and telematics, enhancing customer experiences, streamlining processes, and enabling data-driven insurance solutions.

Major international and regional players have established a strong foothold in the MEA non-life insurance market, fostering competition and driving innovation. Prominent names include Aramco, Emirates Insurance Company, Qatar Insurance Company, etc. Recognizing the industry's pivotal role in economic development, various governments in the MEA region have implemented schemes and initiatives to promote growth and increased penetration rates. Saudi Arabia's “Vision 2030” program, the UAE's Insurance Authority regulations, Egypt's compulsory insurance schemes, and Oman's “Oman Insurance Strategy 2020” are notable examples of such efforts.

According to the research report, the Middle-East and Africa Life and Non-Life Insurance Market are projected to reach a market size of more than USD 360 Billion by 2029. Unlike established markets with robust insurance networks, the MEA region faces limitations in domestic insurance production and distribution channels. The reliance on imports for insurance products can lead to pricing fluctuations, potential supply chain disruptions, and quality control concerns. To address this challenge, there's a pressing need for investments in local insurance infrastructure and capacity building.

Government initiatives and private sector collaborations can stimulate the growth of domestic insurance providers, fostering self-reliance and ensuring a steady supply of high-quality insurance products within the MEA region. In the non-life insurance sector, constraints related to market infrastructure and access to resources pose challenges. Limited domestic production and distribution channels for insurance products necessitate a heavy reliance on imports, primarily from established insurance markets. This dependence can lead to pricing volatility, supply chain disruptions, and quality control issues. To mitigate these challenges, there's a critical need for investments in local insurance infrastructure and capacity building.

Government support and private sector partnerships can stimulate the growth of domestic insurance providers, promoting self-sufficiency and ensuring a stable supply of insurance products within the MEA region. The strategies within the MEA insurance market also require a nuanced approach that considers the diverse cultural and socioeconomic landscape. Traditional marketing channels such as television and radio remain effective in reaching a wide audience, particularly in rural areas with limited access to digital platforms.

However, there's a growing emphasis on digital marketing initiatives leveraging social media platforms and influencer collaborations to target health-conscious consumers. Educational campaigns play a vital role in demystifying insurance products and raising awareness about their benefits. Collaborations with local communities and traditional healers can help bridge the gap between traditional insurance practices and the evolving insurance landscape in the MEA region.

Market Drivers:

• Population Growth and Urbanization: Population growth and rapid urbanization in MEA countries drive the expansion of the insurance market. As urban populations increase, there is a rising demand for insurance products to protect assets, mitigate financial risks, and secure livelihoods against unexpected events.
• Emerging Middle Class: The emergence of a middle class in MEA countries presents significant opportunities for insurers to expand market penetration and drive insurance uptake. As incomes rise and lifestyles improve, individuals and families seek to safeguard their financial well-being through insurance coverage.
• Infrastructure Development: Infrastructure development projects in MEA countries, such as construction, transportation, and energy initiatives, create demand for insurance products to manage project risks and protect investments. Insurers provide coverage for construction risks, property damage, liability exposures, and business interruptions associated with large-scale infrastructure projects.

Market Challenges:

• Political and Regulatory Instability: Political instability, governance challenges, and regulatory uncertainties in some MEA countries create risks and uncertainties for insurers operating in the region. Political unrest, regime changes, and regulatory reforms can disrupt insurance operations, regulatory oversight, and market stability, affecting insurers' ability to underwrite risks and service policies effectively.
• Compliance Risks: Insurers must navigate complex regulatory environments and compliance requirements across MEA countries, including licensing, capitalization, solvency, and consumer protection regulations. Regulatory compliance adds operational complexity and costs for insurers, particularly in jurisdictions with evolving regulatory frameworks and enforcement mechanism.

Market Trends:

• Islamic Insurance (Takaful): Islamic insurance, or Takaful, is gaining traction in MEA countries with large Muslim populations and growing demand for Sharia-compliant financial products. Takaful operates on the principles of mutual cooperation, risk-sharing, and ethical investment, aligning with Islamic principles and values.
• Sharia-Compliant Products: Insurers offer Takaful products such as family Takaful (life insurance), general Takaful (non-life insurance), and investment-linked Takaful (savings and investment plans) to cater to the needs of Muslim consumers seeking ethical and socially responsible insurance solutions.

The non-life insurance is leading in the life and non-life insurance industry is due to the region's rapid economic growth, infrastructure development, and regulatory reforms.

The demand for comprehensive insurance solutions to mitigate risks associated with large-scale projects, expanding industries, and evolving liabilities has propelled the growth of the non-life insurance market. One of the primary drivers of the non-life insurance industry's growth in the MEA region is the massive infrastructure development projects underway across various countries. The construction of mega-cities, transportation networks, and industrial facilities has necessitated the need for robust property insurance, construction risk insurance, and liability coverage.

Insurers in the region have responded by offering specialized products and services tailored to these large-scale projects, positioning themselves as key players in the non-life insurance market. The region's economic diversification efforts and the expansion of various industries have contributed to the rise of the non-life insurance sector. Industries such as energy, manufacturing, and logistics face a range of risks, including property damage, business interruption, and liability concerns. This has driven the demand for comprehensive insurance solutions to mitigate these risks and protect businesses from potential financial losses.

The automotive industry, a significant contributor to the economies of several MEA countries, has also played a role in the growth of the non-life insurance segment. With rising vehicle ownership and the development of transportation infrastructure, the need for motor insurance, including personal and commercial lines, has increased substantially. Insurers have adapted to changing consumer preferences, regulatory requirements, and technological advancements in this sector, offering tailored products and services to meet the evolving needs of drivers and fleet operators.

In the Middle East & Africa (MEA), agency distribution leads the life and non-life insurance industry due to the cultural preference for face-to-face interactions, relationship-based business practices, and the critical role of trust in financial transactions.

In many MEA countries, personal relationships and trust are paramount in business dealings, and this extends to the insurance sector. Agents who operate within these cultural contexts are able to build and maintain strong personal relationships with clients, which is crucial for fostering trust and ensuring long-term customer loyalty. Face-to-face interactions are a cornerstone of business in the MEA region. Many clients prefer to discuss their insurance needs in person, allowing them to ask questions, express concerns, and gain a clearer understanding of the products being offered.

The personal interaction helps to demystify insurance products, making them more accessible and understandable to clients who may be unfamiliar with the nuances of insurance policies. The ability of agents to provide clear, tailored advice in person significantly enhances customer satisfaction and confidence in their insurance decisions. The MEA region is characterized by diverse markets with varying levels of insurance penetration and financial literacy. Agents who are embedded in these local markets possess valuable insights into the specific needs and preferences of their communities.

They can offer customized solutions that address local risks and requirements, which is particularly important in regions where standard insurance products may not be as effective or relevant. The local knowledge and adaptability are key advantages of the agency model. Trust plays a critical role in financial transactions in the MEA region. Given the intangible nature of insurance products, clients need to have confidence that their insurer will honor its commitments when needed. Agents, by providing a personal touch and being present in the community, serve as trusted intermediaries who can reassure clients about the reliability and integrity of their insurance provider.

The trust is especially important in life insurance, where clients are making long-term commitments and need assurance that their families will be taken care of in the future. Insurance companies in the MEA region often provide extensive support to their agents, including training, marketing resources, and technological tools. The support helps agents deliver high-quality service and stay informed about industry developments and regulatory changes.

Saudi Arabia is leading in the life and non-life insurance industry due to it large and growing population, ambitious economic diversification plans, and regulatory reforms have created a fertile environment

In the life insurance segment, Saudi Arabia has experienced a surge in demand as the population becomes more aware of the importance of financial planning and risk management. The country's young and growing population, coupled with rising disposable incomes, has fueled the need for life insurance products such as term life, whole life, and investment-linked policies. International and domestic insurers have recognized this potential and have introduced a wide range of life insurance solutions tailored to the Saudi market. The non-life insurance sector in Saudi Arabia has benefited from the country's ambitious economic diversification plans and infrastructure development initiatives.

As part of the Vision 2030 program, Saudi Arabia has embarked on mega-projects across various sectors, including transportation, housing, and tourism. The large-scale projects have driven the demand for comprehensive insurance coverage, such as property insurance, liability insurance, and construction risk insurance. The growing automotive sector and the increasing number of vehicles on Saudi roads have boosted the demand for motor insurance. Saudi Arabia's regulatory environment has played a crucial role in shaping the insurance industry's growth.

The Saudi Arabian Monetary Authority (SAMA), the country's central bank and insurance regulator, has implemented reforms aimed at promoting transparency, consumer protection, and adherence to international best practices. The regulatory changes have attracted global insurers and reinsurers to enter the Saudi market, fostering competition and driving innovation. The Saudi government has recognized the importance of the insurance sector in supporting economic diversification and has introduced initiatives to promote financial inclusion and insurance penetration. The adoption of digital technologies has been instrumental in the growth of Saudi Arabia's insurance industry.

Insurers have embraced online platforms, mobile applications, and emerging technologies such as artificial intelligence and data analytics to enhance customer experiences, streamline processes, and develop tailored insurance solutions. The digital transformation has not only improved accessibility but has also enabled insurers to reach a wider customer base, including those in remote areas of the country.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Life and Non-Life Insurance market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendations

By Insurance Type:

• Life
• Non-life

o Health:

o Home:

o Motor:

o Travel:

o Business:

o Others:

By Distribution Channel:

• Direct
• Agency
• Direct & online
• Other

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the analysts made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once they acquired the primary data, they started verifying the details obtained from secondary sources.

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Life and non-life insurance industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.