This compares to a worldwide growth of 3.4 percent in nominal dollar terms, implying stagnation in real terms.

"The region's insurance growth rate sounds impressive; however, it is not nearly as large as it should be," said Santino Saguto, managing director of Value Partners' Dubai office.

"Insurance penetration, for example, aggregate insurance premiums over GDP, stands at 1 percent for the GCC countries. In contrast, the developed insurance markets in the US and Europe register penetration rates in the range of 5-15 percent. Saudi Arabia has a particularly low penetration of only 0.6 percent, dwarfed in absolute size by its smaller neighbor the United Arab Emirates (UAE), which has a penetration rate of 2 percent."

The study also gives an insight into the relative strength of insurance classes: motor insurance is the strongest, followed by health and property. Life insurance is particularly weak, accounting for only 15 percent of total insurance premiums, compared to around 60 percent in Europe.

"Gulf residents seem to buy insurance products only if they have to. It is not by coincidence that mandatory third party motor insurance is the leading class," continued Saguto. "All other non-life insurance classes, health included, are almost 100 percent corporate business. GCC nationals expect their governments to cover most risks for them, the majority of health care is free and provided by the government, and home loans are often state-guaranteed, without the need for building insurance."

Recently UAE, Qatar and Bahrain have been pushing regulatory reform.

Takaful, a Sharia-compliant form of insurance, will still increase its contribution to the sector, according to the study. Although its share of the insurance market is currently low, accounting for around 10 percent of overall premium volumes in the GCC, many insurers -- even Western companies -- invest in this growing market by establishing Takaful operations.

Of all insurance classes, health insurance has the best growth prospects, as governments are expanding mandatory insurance for expatriates and, in some cases, even for nationals. GCC countries have a very significant expatriate population, ranging from around 30 percent in Saudi Arabia to 85 percent in the UAE.

"In this growth scenario, new approaches to distribution are expected to provide more aggressive and competent sales channels for insurance products. Trends to watch out for include business to business to enterprise models, like worksite marketing, where employees can buy voluntary insurance products directly at their worksite through payroll deduction. Banks will enter the sector as well, bundling insurance with financial products," Saguto added.