Several Middle Eastern countries are currently experiencing rising credit life insurance needs. Unexpected? Not really.
The massive population growth in the region’s nations over the past 15 years, including the ongoing influx of expatriates to the Gulf region, has sparked a real estate boom and prompted many fundamental regulatory changes in these countries.
Today, for example, expatriates in several Middle East countries can acquire long-term property leases and even own property in some countries. In addition, many countries have decriminalized debt, making for more welcoming startup and SME environments.
These changes have increased asset ownership across the board among both citizens and expatriates, and invigorated business environments. Both men and women can now own cars and credit cards, and the easing of regulations governing debt are enabling a more supportive and vigorous business culture. These trends are translating into more personal and business loans and greater availability of credit. Ultimately, they are also creating more risk for the region’s individuals and the financial institutions that serve them.
All of these trends are positively reshaping the market environment in the region for credit life insurance. Credit life, which includes mortgage life, is a relatively recent product in the Middle East – less than 20 years – and as in most countries around the world, life insurers offer it through banks.
Product structures differ from country to country. In most Middle East countries, both group credit life schemes on monthly outstanding and individual single premium credit life products are available. Group credit life schemes cover relatively smaller loans such as personal, auto and credit card loans, whereas single premium products are intended for higher-value mortgage and business loans.
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