Bain & Company estimated the size of the e-commerce market in the Middle East & North Africa (MENA) at $8.3bn in 2017. It noted that the size of the e-commerce industry stood at $4.2bn in 2014, $5.3bn in 2015 and $6.7bn in 2016. As such, it pointed out that the size of the e-commerce market grew by a compound annual growth rate (CAGR) of 25% between 2014 and 2017. It indicated that the size of the e-commerce industry in Gulf Cooperation Council (GCC) countries and Egypt accounted for 80% of the region's e-commerce market. It said that the e-commerce market includes all business-to-consumer sales of groceries, fashion, personal care, beauty and electronics products. But it noted that the figures exclude business-to-business and consumer-to consumer e-commerce transactions, as well as food delivery, travel-related purchases, entertainment and other services, and the sale of automobiles. Further, it noted that e-commerce sales in the MENA region represented only 1.9% of the region's total retail sales in 2017, with the GCC region's e-commerce sales at 3% of their retail sales. It added that the UAE's e-commerce sales represented 4.2% of the country's retail sales, followed by Saudi Arabia (3.8% of retail sales), and Egypt (2.5% of retail sales). Further, Bain & Company anticipated that e-commerce in the MENA region could reach $28.5bn by 2022, which would constitute an expansion of 3.5 times from 2017. Still, it considered that a lack of trust for online payment methods as well as challenges related to the speed and cost of product delivery continue to hinder the development of e-commerce in the region. 
Source: Bain & Company

Global reinsurer Swiss Re indicated that the outlook for the insurance sector in emerging markets (EMs) is strong despite the cyclical and structural headwinds that are weighing on their overall economic growth prospects, such as financial volatility, trade-related uncertainties, rapidly ageing populations in some markets, high indebtedness, and stagnating productivity. It noted that, despite the economic slowdown, the current level of income per capita in EMs is favorable for the insurance industry and has supported demand for insurance products. It expected growth in insurance markets in Latin America, Central & Eastern Europe, as well as Asia excluding China, to accelerate in coming years. It anticipated that Brazil, China, Mexico, Russia and Turkey will lead the growth in EM premiums in the medium term. In this context, it expected the EM share of global insurance premiums to increase by about 50% over the next 10 years, mainly driven by premium growth in EM Asia. It anticipated China to become the largest insurance market in the world in the next 15 years.

In addition, Swiss Re forecast non-life insurance premiums in EMs to post a real growth rate of 8% annually in the 2019-20 period, supported by stronger non-life business in emerging Asia excluding China, as well as Africa, Central & Eastern Europe, and Latin America. In comparison, it projected non-life premiums in advanced economies to expand by a real rate of 2% annually in the 2019-20 period. In parallel, it expected life insurance premiums in EMs to increase by 9% in real terms in the 2019-20 period, following an expansion rate of 1% in 2018. It attributed the recovery in EM life premiums in the next two years to increases of 11% and 4% in life premiums in China and Latin America, respectively, following contractions of 2% and 1%, respectively, in 2018. In comparison, it forecast life premiums in advanced economies to increase by a real rate of 1% annually in the next two years.
Source: Swiss Re

Moody's Investors Service expected the asset quality of UAE banks to deteriorate over the next 12 to 18 months, due to the banks' increasing exposure to the weakening real estate and construction sectors. It noted that lending to the two sectors increased from 16% of aggregate loans end-2015 to 20% at end-2018. It attributed the growth in lending to the banks' significant involvement in large real estate projects ahead of Dubai's Expo 2020, large-scale infrastructure projects, and an increased focus on collateralized lending. It noted that banks are also indirectly exposed to the real estate sector through personal loans, as the latter could be extended for the purchase of real estate or have real estate as underlying collateral, as well as through the financing of private and government-related real-estate developers. In parallel, the agency expected declining real estate prices to lower rental prices and rising interest rates to increase financing costs, which would reduce the cash flow of borrowers and, in turn, drive banks to increase their loan-loss reserves. It added that lower property prices will also reduce the value of real estate collateral held by banks against their lending, which will lead them to boost their loan-loss provisioning. However, Moody's considered that the strengthened regulations and tighter underwriting practices will help mitigate risks to the banking sector. It added that UAE banks benefit from high buffers due to strong capital adequacy and solid profitability metrics, as well as a sound provisioning of problem loans, as loan-loss reserves accounted for 104% of the banks' problem loans at end-June 2018.
Source: Moody’s Investors Service