GCC Insurance Outlook Stable Amid Growth, Diversification: Moody's
Economic diversification and compulsory insurance schemes support regional growth; large insurers outperform smaller peers.
The Gulf Cooperation Council (GCC) insurance sector is expected to remain stable over the next 12 to 18 months due to strong economic growth and rising non-oil investments, according to Moody's Ratings.
Economic diversification, particularly in infrastructure projects supported by governments, and compulsory insurance schemes are driving sector growth.
In its latest GCC Insurance Outlook, Moody's noted that the region’s non-life segment, which represents more than 80 percent of premium revenues, will benefit from government-backed initiatives in Saudi Arabia and the UAE.
These two countries generate 80 percent of the GCC's total insurance premiums.
S&P Global Ratings has projected sustained expansion for the Gulf's insurance industry, particularly within the Islamic segment, expected to grow by around 10 percent annually in 2025 and 2026.
Moody’s highlighted that larger insurers will continue to outperform smaller ones due to intense price competition, rising claims, and high technology and regulatory costs.
The agency forecasted real gross domestic product (GDP) growth of around 4 percent for 2026, led by the UAE and Saudi Arabia, with contributions from Kuwait, Oman, and Qatar.
Construction, tourism, and manufacturing expansion are expected to increase demand for property, liability, health, and specialty insurance.
Additionally, greater consumer awareness and reduced subsidies in utilities and education will boost life and savings policy demand.
According to Moody’s, profitability is improving overall, with non-life insurance prices rising in 2025, particularly in the UAE following premium increases after heavy storm-related claims in 2024.
The agency expects the sector to post positive underwriting profits for the remainder of 2025 and into 2026.
However, large insurers are expected to capture most profitability gains due to economies of scale.
Smaller firms face challenges from intense competitive pressure, increased reinsurance prices, regulatory expenses, and technology investments.
Additionally, GCC insurers’ high exposure to equities and real estate raises asset risks amid geopolitical uncertainty in the Middle East.
Saudi insurers face additional strain on capital buffers due to slower profit growth and higher risk exposures, while UAE insurers have benefited from stronger profitability and price adjustments.
Regulators across the GCC are tightening capital and risk requirements, which Moody's expects to accelerate consolidation—especially in Saudi Arabia, where authorities have taken a more assertive stance on compliance.
The agency noted that market dynamics are shifting toward larger, better-capitalized players, and consolidation will support the sector’s credit strength over time.
Economic diversification, particularly in infrastructure projects supported by governments, and compulsory insurance schemes are driving sector growth.
In its latest GCC Insurance Outlook, Moody's noted that the region’s non-life segment, which represents more than 80 percent of premium revenues, will benefit from government-backed initiatives in Saudi Arabia and the UAE.
These two countries generate 80 percent of the GCC's total insurance premiums.
S&P Global Ratings has projected sustained expansion for the Gulf's insurance industry, particularly within the Islamic segment, expected to grow by around 10 percent annually in 2025 and 2026.
Moody’s highlighted that larger insurers will continue to outperform smaller ones due to intense price competition, rising claims, and high technology and regulatory costs.
The agency forecasted real gross domestic product (GDP) growth of around 4 percent for 2026, led by the UAE and Saudi Arabia, with contributions from Kuwait, Oman, and Qatar.
Construction, tourism, and manufacturing expansion are expected to increase demand for property, liability, health, and specialty insurance.
Additionally, greater consumer awareness and reduced subsidies in utilities and education will boost life and savings policy demand.
According to Moody’s, profitability is improving overall, with non-life insurance prices rising in 2025, particularly in the UAE following premium increases after heavy storm-related claims in 2024.
The agency expects the sector to post positive underwriting profits for the remainder of 2025 and into 2026.
However, large insurers are expected to capture most profitability gains due to economies of scale.
Smaller firms face challenges from intense competitive pressure, increased reinsurance prices, regulatory expenses, and technology investments.
Additionally, GCC insurers’ high exposure to equities and real estate raises asset risks amid geopolitical uncertainty in the Middle East.
Saudi insurers face additional strain on capital buffers due to slower profit growth and higher risk exposures, while UAE insurers have benefited from stronger profitability and price adjustments.
Regulators across the GCC are tightening capital and risk requirements, which Moody's expects to accelerate consolidation—especially in Saudi Arabia, where authorities have taken a more assertive stance on compliance.
The agency noted that market dynamics are shifting toward larger, better-capitalized players, and consolidation will support the sector’s credit strength over time.
