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Middle East and Africa

Published on 13 January 2021

In this chapter of our Annual Insurance Review 2021, we look at the main developments in 2020 and expected issues in 2021 for the Middle East.

Key developments in 2020

Middle East

Last year we predicted that the UAE government's commitment to investment in the non-oil economy over the coming decades would be a driver of premium growth in the Middle East. Unsurprisingly, however, premium levels contracted over the year primarily due to the drop in economic activity as a result of government enforced lockdowns. Non-oil GDP declined by 7.4% as relevant sectors struggled with the region's relatively stringent lockdown measures in response to the COVID-19 pandemic and the resulting economic pressures. Swiss Re estimate a 3% decline in 2020 in non-life premiums. 

Despite economic pressures caused by COVID-19, it seems that pandemic-related claims in 2020 have been manageable for most insurers. Associated claims in property and casualty lines have been largely concentrated on business interruption, although only a few primary insurers provide such cover in the region and most policies are purchased as part of fire or property insurance with damage as the trigger for cover.


Last year we highlighted Africa as being at the forefront of an 'energy revolution' due largely to its use of solar power. The October 2020 African Energy Forum had a large focus on solar power emphasising that Africa is the most 'solar rich' continent in the world. Although substantial growth was expected in solar in 2020, growth levels have been hampered in part by the pandemic, but also by constrained procurement processes and delays in infrastructure developments.

However, investors and industry leaders remain optimistic about, and committed to, the exploitation of the solar potential on the continent.  The implication being that there continues to be opportunities for local insurers to offer products covering small to large scale solar infrastructure. 

What to look out for in 2021

Middle East

Like many other economies, the region is predicted to go into recession in 2021 as oil-exporting countries continue to face the triple-hit of COVID-19 related lockdowns, related economic slowdowns, and low and falling oil prices. It is likely that this will result in the market seeing further depressed premium growth.

However, there are hopes for a recovery starting in 2021. As the global rhetoric around a 'green recovery' from COVID-19 gains pace, divestment in the oil industry is likely to be pushed further as investors expand into greener alternatives and renewable energy. The Middle East Solar Industry Association reported that Saudi Arabia plans to invest up to USD50billion in the renewable sector by 2023 to reduce reliance on oil income and diversify its energy mix.


COVID-19 has highlighted the value of technology and the digitisation of insurance processes. The AIO has placed digitisation at the centre of its action for 2021. Several African insurers have fast-tracked their existing plans for digitisation, whilst others are also exploring other methods to aid in the remote delivery and operation of insurance products. A likely trend that will continue to increase in 2021 is investment by insurers in InsurTech companies, such as Africa Re's investment in B3i, a Europe-based blockchain technology provider whose platform can be used by insurers and brokers to create and administer digital contracts on distributed ledgers. The early introduction of technology by insurers in developing economies in Africa may help the market to avoid legacy inefficiency issues that insurers in developed economies may be facing now.

Download our full Annual Insurance Review 2021 for more insights.