Middle East outlook: regulation, economic diversification and digital innovation boost insurance industry growth

We forecast that the region’s gross domestic product (GDP) will grow by 2.8% in 2025, supported by gradual unwinding of oil production cuts. That said, global economic slowdown, due in large part to US trade and policy uncertainties, poses downside risk to our growth outlook.

Figure 1:

Improved economic performance and MEP governments’ diversification efforts foster a favourable growth environment for the insurance industry in the region. Motor and health remain the largest lines of business, but growing investments in real estate, infrastructure, tourism and technology have expanded the risk pools for other insurance segments such as property and engineering. We expect total (non-life + life)  premiums in the region to grow by 5.4% in real terms this year, after peaking at 8.7% in 2024.

Figure 2:

Non-life business will be the main driver, with continued expansion of mandatory health covers in key markets such as Saudi Arabia and the UAE, and rising healthcare costs and premium rate adjustments for natural catastrophe exposed portfolios. Additionally, momentum in the construction and tourism sectors is creating new insurance opportunities. We estimate that non-life premiums will grow by 6% in real terms this year, after a 7.8% gain in 2024. We see premium volumes in the region's less developed life market by 2% in real terms in 2025. Key life markets in the region include the UAE, Pakistan and Saudi Arabia. 

Adoption of technologies such as automation and artificial intelligence (AI) is reshaping the future of region’s insurance industry, presenting potential for gains in operational efficiency and personalisation. That said, rapid digitalisation across the region brings increased scope for cyberattacks. With economic growth and rising urbanisation, the region’s exposure to extreme weather events has also increased.