MANAMA: The insurance market in the GCC is set for a major expansion as the regional economy picks up.
Individuals and companies are set to see the industry grow substantially over the next few years, according to financial services firm KPMG audit and advisory director Krishnan Kavasseri.
"At present the percentage of gross national product that is spent on insurance in the region is very low," he said.
"We are still behind countries like Taiwan but that is about to change.
"As disposable income across the Middle East increases we will see people looking to life policies both as a way of saving and as a means to providing pensions and funding for the education of children.
"We are also likely to see more expenditure on healthcare as people become wealthier and we will see the industry grow as more companies offer healthcare insurance as part of their remuneration packages.
"Insurance remains a very small issue to people in this region but that is about to change as people understand that insurance is not only a protection but also a good way to save for the future," he said.
"People are waking up to the idea that insurance is a way to protect our lifestyle, whether it is when you retire or whether it is because you cannot work because of injury and it is an industry that is now attracting investment."
Mr Kavasseri said one of the strengths of the regional industry is that people tend to have more trust in local companies than in the major international players.
"One of the weaknesses of the industry is that many of the players are fairly small so there is a need for consolidation, including cross border consolidation to create bigger players in the local market."
"The industry in the GCC has a number of issues it has to address," he said.
"Firstly there has to be a stronger focus on marketing and secondly there has to be more concentration on customer service.
"On top of that the industry currently suffers from a skills gap which has to be addressed as it goes forward. But the potential for expansion of this industry in the region in strong, not least in the area of Sharia-compliant takaful products," Mr Kavasseri said.