The life insurance markets of the MENA (Middle East-North Africa) region are undergoing several shifts in the wake the global ﬁnancial crisis, the Arab Spring, and lower oil prices. Recovery, although slow, has been steady, and two markets in particular – Saudi Arabia and Egypt – are emerging as vibrant and innovative both for traditional and takaful (Islamic) products.
Saudi Arabia in 2016 enacted its Vision 2030 program, with the goal of reducing the country’s economic dependence on oil and cultivating alternative sources of revenue. This is enabling the development of several non-oil aspects of the Saudi economy, including the life insurance market.
Already, clear changes have emerged in customer attitudes about life insurance, both in protection and saving products. One of the most noticeable trends has been seen in retirement-savings products, especially among middle-aged individuals. Over the past year, sales growth for these products has exceeded all expectations, especially among the growing population of educated middle-aged Saudis, who are now focusing on saving more at earlier ages in order to minimize dependence on the government’s pension scheme.
Vision 2030’s inclusion of more rights for women has thus far had the well-publicized outcome of October 2017’s lifting of the female driving ban. Saudi insurers are leveraging these greater rights as well to develop the sort of female-speciﬁc health and protection products already popular in the Asia-Paciﬁc region.
The most visible innovation in Saudi Arabia’s insurance market is occurring in its beneﬁts market, speciﬁcally for small to medium enterprises (SMEs). Traditionally, the relatively small size of these companies has meant brokers and beneﬁt designers cannot design cost-eﬀective customized plans for them. Recently, Saudi insurers have developed over-the-counter group employee beneﬁt products. These plans have no underwriting requirements, provide a maximum life cover of SAR 100,000, and have available a range of pre-priced beneﬁt packages that are based on the number of employees, the amount of cover, and the types of beneﬁts oﬀered.
Egypt has also seen considerable evolutionary development in its economy and its life insurance market over the past ﬁve years. These are, of course, in part due to the aftereﬀects of Arab Spring, which ﬁrst struck Egypt in 2011, on its government and economy. In addition, two recent occurrences – one of which was wholly unexpected – have substantially changed Egypt’s economic picture.
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