UAE insurance sector set for 4.9% annual growth rate amid transformation
SARA ALZAABI (ABU DHABI)The UAE's insurance market is undergoing a period of transformation, with new dynamics reshaping the market's priorities and growth areas, a top expert told Aletihad.Ayman El Hout, CEO of Marsh McLennan covering the UAE, Qatar, Oman, and Egypt, said the market's growth is being driven by 'regulatory changes, technology adoption, changing consumer needs and inflow of international reinsurance capacity.'The UAE, he said, continues to lead in the Middle East in terms of insurance penetration. The total insurance premiums collected in the country amounted to 2.5% of its GDP, as compared to a regional average of 1.5%. Poised for continued innovation and risk diversification over the next five years, the UAE insurance sector 'aspired to expand at a compounded annual growth rate (CAGR) of 4.9% from $14.1 billion to $17.9 billion (Dh65.7 billion) in 2028," El Hout said. 'Market players continue investing in AI and digital solutions while expanding coverage offerings for emerging risks and challenging risks as well the new risks interconnectivity dynamics.'Health insurance remains the fastest-growing segment in the market, outpacing property and casualty (P&C), El Hout said.'This [trend] is driven by the implementation of mandatory health insurance regulations in Abu Dhabi and Dubai, and now boosted by the Northern Emirates. Furthermore, in January 2025, the Dubai Health Authority (DHA) increased the minimum health coverage requirements, further contributing to this growth. The rising utilisation of health insurance programmes ... has also led to increased premium volumes.'Health insurance demand is growing in the corporate and individual markets due to increased competition for employee benefits, broader coverage needs, and shifts toward preventative care in the post-pandemic world, according to a Marsh McLennan report.More UAE companies are also offering custom-made insurance plans to tackle workforce-related challenges - from employee wellness and psychological health to staff turnover, El Hout added. The expert went on to shed light on how the regulatory landscape has evolved significantly for the country's insurance market.'The new mandates around consumer protection, data privacy/protection, money laundering, corporate governance, etc… are set to create more confidence in the market. It would be great to see market consolidations in the future creating players that can deliver more value to the clients and shareholders,' he said.
Use of AI, Smart Tech Artificial intelligence and advanced analytics have been enhancing insurance providers' operations, particularly in claims management and fraud detection, El Hout said. 'Some insurers have started leveraging AI-driven platforms to automate claims processing, which reduces turnaround times and improves customer experiences. Additionally, predictive analytics is being gradually deployed to identify suspicious claim patterns and prevent fraudulent activity,' he said.As the sector embraces digitalisation, however, new and 'mutating' risks are shaping the business strategies, El Hout said. 'Cybersecurity threats, supply chain vulnerabilities, and climate-related exposures are now at the forefront, prompting the creation of specialised products and risk assessment/mitigation models and solutions. The adoption of digital assets, new technologies and remote workforces has also introduced new risk considerations.'El Hout stressed the importance of constant reinvestment in technology and talent to improve the delivery of services and offer agile, customer-centric solutions.
'Continued investments in technology as well as in human capital are the key to success,' he said.
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