For some time, regional economies have actively pursued the diversification of their economic and investment policies to reduce their reliance on oil. They have made significant strides in this direction, registering remarkable growth across non-oil sectors. The UAE presents a prime example, with non-oil activities accounting for around 79% of total economic output, according to recent statistics.

 

However, volatile conditions today have taken their toll. In times of war and political instability, all sectors, whether energy-related or otherwise, are affected. Economic pressures are beginning to manifest. The address delivered by the Emir of Qatar, at last month’s opening of the annual session of the Shura Council, sounded an alarm not only over regional security and the risk of escalation of tensions but also over mounting economic pressures. He highlighted a 42% plunge in government revenue as a consequence of the US-Israel conflict, prompting policymakers to demonstrate greater spending efficiency. The speech underscored major concerns, including geopolitical instability, disruptions to LNG exports and damage to energy infrastructure. 

 

Other governments in the region, including those of non-oil-producing countries, face similar predicaments, albeit to varying degrees.

 

Amidst these challenges, the insurance sector in the Arab world has demonstrated resilience, maintaining stability and even recording notable growth across most markets. While traditional lines of business continue to sustain strong momentum and account for a significant share of market activity, emerging lines are also driving growth. However, the medium-term outlook indicates several headwinds. Inflation, rising oil prices and their related repercussions should not be taken lightly–especially for insurance business, which is known for its long tail!

 

On the bright side, this year has seen increased attention to specialty lines, the launch of bold initiatives some markets have taken, and solid progress on the regulatory front. These represent foundations for the future. Adding to the optimism, this year could witness the launch of the region’s first reinsurance sidecar! This is certainly a space to watch and a sign that market players are not twiddling their thumbs.

 

Saudi Arabia is our market profile for this month. It is the leading market of the region in terms of size and performance. We bring to you a collection of articles and analyses that provide a comprehensive overview of its progress. In addition, we shed light on Egypt’s insurance industry and the wide strides it has made in regulatory reform and market development. 

 

November is a special month that sits between endings and beginnings! It brings the Middle East Insurance Industry Awards (MIIA) – an occasion to salute excellence and celebrate achievements. On 25 November, the 13th MIIA Gala Dinner in Dubai will be illuminated by lights and trophies. I hope to see you there!

 

Wishing all a great month ahead! M