The UAE's general insurance industry is set to grow at a compound annual growth rate (CAGR) of 4.7% to 45.5 billion dirhams ($12.4 billion) in 2028 from AED 37.8 billion in 2024, in terms of gross written premiums (GWP), a new report said Friday.

Data and analytics company GlobalData said the general insurance industry in the UAE is expected to grow by 6% in 2024, supported by personal accident and health (PA&H), motor, and property insurance lines that are collectively expected to account for over 85% share of the general insurance premiums in 2024.

Prasanth Katam, Insurance Analyst at GlobalData, said: "The UAE witnessed a slower economic growth of 3% in 2023 as compared to 7.9% growth in 2022, due to cuts in oil production and the deceleration of non-oil sectors. As a result, the general insurance industry is expected to witness slower growth of 8.1% in 2023 as compared to 11.1% growth in 2022."

The trend is expected to continue in 2024 and 2025 due to the global economic slowdown and increased geopolitical uncertainties, he added. 

PA&H insurance is the leading line of business that is expected to account for an estimated 59.1% share of the general insurance GWP in 2024. It is expected to grow by 4.7% in 2024, supported by increasing demand for health insurance policies due to rising health awareness after the COVID-19 pandemic.

Premium prices of health insurance policies have been increasing over the last couple of years and are expected to rise further in 2024, which will support the growth of PA&H insurance.

Katam said: "Positive regulatory developments will also support the growth of PA&H insurance. In January 2024, the UAE government mandated individuals applying for or renewing their residence visas in Dubai and Abu Dhabi to have a valid health insurance policy.”

Property insurance is the second largest line, which is expected to account for 16.6% share of the UAE’s total general insurance GWP in 2024. It is expected to grow by 10.5% in 2024, driven by increasing demand for residential and commercial properties.

Motor insurance is the third largest line, accounting for an estimated 9.8% share of the GWP in 2024. It is expected to grow by 2.4% in 2024, driven by an increase in vehicle sales and growing demand for comprehensive motor insurance policies covering natural disasters.

In August 2023, the Central Bank of the UAE announced the removal of the discount of up to 50% on motor insurance premiums to accident-free owners. Insurers can now concentrate on risk-based pricing, which is expected to result in higher premiums. Motor insurance is expected to grow at a CAGR of 2.5% during 2024-28.

(Writing by Brinda Darasha; editing by Daniel Luiz)