Affluent Insurance Marketing - Developing Markets

MASS Affluent Segment: Growth and Potential in the GCC:

Date: June 24, 2010

It is a well known fact that the mass appeal Life Insurance Products in the Gulf market are not as sophisticated as the products in some of the more mature Insurance markets. This is also true for the Mass Affluent, HNW, and UHNW segment of the market as Insurance companies have poorly served this segment in terms of not having dedicated products and delivery channels.

There is no doubt that the Gulf region has a growing Mass Affluent, HNW and UHNW population both within the expatriate community and the indigenous population. With a total of over 36 million inhabitants (around 24 million excluding immigrants) per capita gross domestic product (GDP) is over $20,000 – on a par with many western economies. In addition, despite asset impairment due to the credit crunch, many Gulf HNW individuals are still cash rich. As per some market experts, the Wealth held by affluent individuals in the Gulf will grow to over $3.5 Trillion by 2012. The result of this growth is evident when looking at the increase in number of Wealth Management Mangers/Houses that are being setup by Multinational Banks and by the local banks as well. Moreover, we can also look at an example where an increase in World Class Health Care facilities in the region is growing and some experts say that this is fueled by the growing demand from the affluent and HNWI segments in the society.

Despite strengthening competition, market growth allows space for further new entrants especially in the mass affluent segment with products in Life Insurance, Health, Auto, Accident Investments and Savings – Unit Linked, CPPI especially designed to cater to these segments. Having said this, undoubtedly, the banks have an upper hand in terms of having access easy access to these individuals in the region. The loyalty of mass affluent individuals is with a strong inventor group or investment brand that resonates with...