Clyde & Co supports International Women's Day and is committed to accelerating gender parity globally. In honour of the many exceptional women we work with every day, we have interviewed influential women from some of the most dynamic industries in the Middle East to discuss the trends, opportunities and challenges they are experiencing. In this video, Evgenia Pepelova, Head of Legal - MENA for AIG, discusses the changing dynamics of the insurance industry with Shabnam Karim and provides insights on the impact of technology in the region.

Insurance in the Middle East

The insurance sector in the Middle East is currently experiencing a range of opportunities, such as the emerging and developing economies in the region and the development of new products, such as cyber insurance.

The last 18 months have also been a time of upheaval and challenges, with increased regulatory activity, low premiums and the continued low penetration of insurance. However, insurers and regulators are continuously taking steps to improve the financial stability of the sector and are considering new opportunities for growth and development in a tough market.

Technology & regulation

Across the industry, we see insurers and those operating in sectors connected with insurance working on enhancing their solutions with the use of innovation and technology. The insurance sector is looking at its offerings for businesses as they become increasingly digital, with insurers now offering cyber add-on provisions to existing policies or launching new innovative products to cover risks in a digital age.

We are also observing increased regulation and activity by both local and global regulators who are focusing on improving the financial stability of the market. This has included the introduction of new capital requirements, increased corporate governance and a focus on the healthy pricing of consumer insurance products.

Re/insurers and brokers are also increasingly looking at emerging and developing markets across the region for new streams of business.

Challenges ahead

The insurance industry continues to face challenges related to a low level of insurance penetration in the region, due to the small amount of mandatory forms of Insurance. This challenge is compounded by the high number of national insurance companies in the UAE, which has led to a competitive market on premium prices and economic pressure on companies with premiums falling year on year.

The industry is also facing large economic pressure, which has been exacerbated by low oil prices in recent years. This has resulted in some insurers exiting the market in recent months, such as Cigna's acquisition of Zurich's non-life Insurance business in 2017.

Experts are also expecting the introduction of VAT in the UAE and KSA to have a further impact on pricing and this could affect buyer willingness to purchase insurance over the coming years.

As much as technology is a huge opportunity in the region, insurers are facing disruptive changes and new risks due to digitisation. Companies are being forced to take strides to respond swiftly to the changing environment.

Regulation is of course another key challenge. Local insurers are dealing with or preparing for increased regulation, including the impact of GDPR and the amended data protection legislation expected in the DIFC imminently.