Strong economic growth driven by government investment in non-oil sectors is expected to bolster the profitability of GCC insurers over the next 12 to 18 months, Moody’s Ratings said in a recent report.

The agency noted that the industry will also gain from the expansion of compulsory insurance schemes and increasing demand for health and life coverage. Larger insurers are likely to outperform smaller players, which face mounting challenges from intense price competition, higher claims, and rising technology and regulatory costs. Some smaller insurers may see their solvency pressured, leading to further consolidation in the market.

Moody’s warned that some GCC insurers’ reliance on high-risk investment assets makes them vulnerable to geopolitical tensions in the Middle East. “Our analysis focuses primarily on the GCC non-life sector, which accounts for over 80% of region’s premium revenues, and on Saudi Arabia and the UAE, which generate a combined 80% of the region’s insurance premiums,” Moody’s noted.

The ratings agency expects the GCC to post real GDP growth of around 4% in 2026, led by the UAE (Aa2 stable) and Saudi Arabia (Aa3 stable). Diversification projects in these economies, along with Kuwait (A1 stable), Oman (Baa3 stable), and Qatar (Aa2 stable), are driving expansion in non-oil industries such as construction, tourism, and manufacturing.

This growth will increase demand for a broader range of insurance products such as property, liability, health, and specialty coverage, helping to raise the region’s still-low insurance penetration and reduce its dependence on motor and medical policies.

Moody’s also highlighted improving non-life insurance prices in 2025, particularly in the UAE following storm-related claims. The spread of mandatory insurance and greater consumer awareness should sustain underwriting profits through 2026.

However, “competitive pressures in the GCC market are amplified by the central role in the distribution chain of personal insurance brokers and aggregator platforms, which channel business toward the lowest cost operators,” Moody’s added.