Why the GCC insurance sector must not turn away from digitalisation 

There is no doubt that the insurance landscape in the GCC is transforming. And digitalisation is playing a key role in this disruption.

Governments are driving digital economies underpinned by national strategies. reshaping organisations and everyday lives of individuals. Meanwhile, a younger, tech-savvy population with high internet penetration prioritises seamless, digital experiences. Insurers must adapt to this shift. 

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The regional insurance market is poised for growth, with experts from S&P Global forecasting an increased demand for insurance on the back of economic expansion, population growth, and mandatory insurance schemes. In countries such as the UAE, a robust 10-20 per cent expansion is expected in 2025. However, competition and volatile equity markets will challenge bottom-line results, with agility and adaptability key to success. 

Digitalisation as a means to be bigger, better

The region’s affinity towards digitalisation provides a strong foundation for innovation. The 2024 Arab Digital Economy Index evaluated 22 countries based on their digital readiness and ability. All six of the GCC economies occupy the top ranks, on the back of ongoing investments in infrastructure and workforce development, and efforts to attract foreign capital in knowledge-based sectors. 

This momentum provides a powerful springboard for insurers. We must capitalise on this digitally driven environment to not only meet rising customer expectations but to exceed them. This means moving beyond simply replicating existing services online and embracing truly transformative digital solutions.

What are some key digital transformation areas that offer ripe opportunities? Personalisation, powered by artificial intelligence (AI) and machine learning, can help us craft bespoke insurance products that precisely match individual customer needs and risk profiles. Imagine offering dynamic pricing based on real-time data, or proactively alerting customers to potential risks and offering preventative solutions. Research from Bain & Company underscores the impact of advanced analytics and machine learning on core insurance functions. For customers, this translates to greater control, transparency, and ultimately, better value. This is the power of digitalisation.

Furthermore, the GCC’s digitally native population demands seamless, 24/7 access to services. This requires a fundamental shift in how we interact with customers. Online platforms, mobile apps, and virtual assistants must become the norm, not the exception. Think intuitive interfaces for policy management, streamlined claims processes accessible from anywhere, and instant support through AI-powered chatbots. 

Around the world, insurers are already undertaking digital transformation opportunities, with around 46 per cent of leaders surveyed by the Economist Impact stating that minimising underwriting and operational costs was a key driver to take advantage of emerging technological trends. Along with cost minimisation and information sharing, improved claim processing and product deployment times were flagged as the most promising outcomes.

Additionally, insurance executives said Generative AI (46 per cent) was among the most important digital capability to harness, followed by digital process automation (40 per cent) and advanced data analytics (37 per cent). Most crucially, the executives surveyed appeared to be acutely aware that the insurance industry’s future will be dominated by the organisations best able to deploy technology in ways that accelerate the pace of doing business.

Overcoming challenges

However, this digital transformation is not without its challenges. As Swiss Re points out, the insurance industry, much like the wider economy, faces a “productivity paradox,” where the full potential of digital technologies remains untapped. Three in four executives surveyed by the Economist Impact stated that outdated technology is a significant barrier, while 74 per cent cited slow rates of innovation and departmental siloes as limitations. Several leaders also cited a lack of understanding of the external environment, such as regulations, competitors and knowledge of changing customer needs, as major barriers.

Another potential challenge we observe in the region is the preference for traditional interactions among certain customer segments – for instance older demographics. While younger, digitally native customers readily embrace online platforms and mobile apps, some may be more comfortable with established face-to-face consultations and physical documentation, especially with something as sensitive as insurance. However, this preference doesn’t negate the value of digitalisation for these customers. Instead, it highlights the need for a balanced approach. Insurers can leverage digital tools to enhance traditional services, offering options like online appointment scheduling, digital policy delivery alongside physical copies, and video consultations that combine the convenience of digital with the personalised touch of human interaction. 

Any concerns surrounding data privacy and ethical implications must be addressed proactively and transparently. This includes robust cybersecurity measures to protect sensitive customer data, alongside significant investment in new technologies, infrastructure, and workforce upskilling to fully realise the benefits of digitalisation while mitigating potential risks.

Despite challenges, the opportunities presented by digitalisation are immense, particularly in thriving markets like the UAE and Saudi Arabia. There is a strong correlation between digitalisation and economic resilience, suggesting that embracing these technologies can strengthen the overall financial landscape. At Orient Insurance, we are committed to embracing these digital advancements to enhance customer experience and deliver innovative solutions.

Addressing lingering issues head-on will pave the way for a truly empowered digital future for the insurance industry. The GCC’s digital momentum provides a unique advantage; now, insurers must seize this opportunity to transform and thrive. In this rapidly evolving landscape, those who fail to embrace digital transformation risk being left behind, unable to compete in a market increasingly defined by innovation and customer-centric digital experiences.

The writer is President, Orient Insurance Group