Estimates are that Bahrain’s insurance market will reach $0.8bn in 2028, registering a CAGR of 2.6% from 2023-2028, according to UAE-based investment banking advisory firm, Alpen Capital, in its latest ‘GCC Insurance Industry’ report.
Bahrain’s life insurance segment is projected to grow at a CAGR of 4.5% during the period covered by the forecast, while the non-life segment is estimated to grow at a CAGR of 2.3% to reach $0.7bn by 2028.
Growth drivers
Industry growth will be supported by:
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- The implementation of the first phase of a mandatory health insurance programme for expatriates.
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- Demographic factors: The kingdom has a rising population and a growing expatriate workforce. According to the International Monetary Fund, the population in Bahrain is projected to grow steadily at a CAGR of 2.5% between 2023 and 2028. Additionally, the per capita income in Bahrain is projected to increase at a CAGR of 1.8% during the same period, contributing to the overall demand for insurable products in the future.
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- Economic diversification: Bahrain has actively pursued diversification in its economy to reduce its reliance on oil. The Economic Vision 2030 aims to diversify the economy by focusing on high-value industries such as finance, services, logistics and tourism. This strategic economic shift is expected to boost demand for a range of insurance products that meet the needs of diverse industries in the country.
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- Infrastructure development: As an integral part of Bahrain’s 2021 Economic Recovery Plan, the country announced over 22 strategic infrastructure projects, with a collective value exceeding $30bn. Major ongoing projects in the country include Bahrain Metro, the Janabiya Highway project, and Sports City. Bahrain awarded 35 tenders worth $84.4m in 2023 for infrastructure projects across key sectors to support the economic development of the country.
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- The government’s initiatives to encourage financial inclusion and rising consumer awareness about the significance of insurance.
Insurance penetration in Bahrain is expected to marginally decline to 1.5% in 2028 from 1.6% in 2023 while the density is tipped to reach $465.6 by 2028.
Bahrain’s insurance industry experienced marginal growth reaching a total GWP of $0.7bn in 2022, exhibiting a CAGR of 0.8% since 2017. The growth was primarily driven by favourable government initiatives, a strong focus on technological advancements and an increased level of consumer awareness regarding insurance products.