Dubai: The number of consumers buying insurance policies in the UAE and other Gulf Cooperation Council (GCC) countries is on the increase, thanks to a growing awareness of preparing for unexpected financial losses.
The increasing demand is also attributed to a recovering economy, expanding population and rising consumer confidence levels. Financial advisers in the UAE told Gulf News that they have seen a positive uptake of insurance solutions, with the majority of households looking to prepare for retirement and protect against losses resulting from critical illness, accident or death.
Nexus Insurance Brokers, which claims to be the GCC’s largest independent financial adviser, said the demand for insurance products from its customers went up by 33 per cent between 2012 and 2013. Among its customers, the most popular insurance solution is whole of life protection combined with critical illness cover.
“As the GCC’s economy rebounds, consumers are now more educated about managing their money, recognising that the days of splurging on big-ticket items like exotic vacations and new cars are over,” said Peter Ellen, operations director, Nexus Insurance Brokers. “Consumers are increasingly turning to objective and skilful financial advisers to help plan for major life events like buying a house, financing their children’s education or preparing for retirement, she added.
According to a July 2013 report by Alpen Capital, the insurance industry in the Gulf is likely to grow at a compound annual growth rate (CAGR) of 18.1 per cent between 2012 and 2017 to reach $37.5 billion.
The insurance penetration in the GCC is pegged at 1.1 per cent as of 2012 and is projected to grow to 2 per cent in 2017. The key growth drivers, according to the report, include “expanding population base”, large community of expatriates and increasing life expectancy.
Natalie Storey, financial planner at Acuma Independent Financial Advice, said they have seen an increase in people buying insurance solutions this year. “I believe there has been an increase in saving-based policies. The savings policies are looking at mostly retirement and education planning,” Storey told Gulf News.
Storey said the rising household wealth is also contributing to the growth in insurance demand. “I believe one major factor is more people are coming to the UAE and people have more money,” she added.