The Boston Consulting Group (BCG) indicated that private financial wealth in the Middle East region reached $4.2 trillion (tn) in 2019, compared to $2.2tn in 2009 and to $1tn in 1999. As such, it said that the region's private financial wealth grew by a compounded annual growth rate (CAGR) of 8.6% between 1999 and 2009, and by a CAGR of 6.7% between 2009 and 2019. It noted that financial wealth includes cash and deposits, bonds, equities and investment fund shares, as well as life insurance and pensions, among other asset classes. It indicated that the region's private wealth accounted for 1.9% of global private financial wealth in 2019, higher than the share of Eastern Europe & Central Asia (1.6%) and Africa (0.7%), but lower than the share of North America (44.2%), Western Europe (20.7%), Asia excluding Japan (18.6%), Japan (7.8%), Latin America (2.5%), and Oceania (2.1%). In parallel, the BCG projected growth in the Middle East region's financial wealth in the 2019-24 period to vary under three scenarios that assume different global recovery paths from the coronavirus pandemic. It expected the region's private wealth to grow by a CAGR of 5.6% in the 2019-24 period under a ''quick rebound'' scenario, whereby the pandemic does not have a lasting impact on global macroeconomic indicators, such as on GDP growth, consumption, interest rates, inflation, and capital markets. It projected the region's wealth to increase by a CAGR of 4.3% over the forecast horizon under a ''slow recovery'' scenario, and by a CAGR of 3.4% under a ''lasting damage'' scenario, which assumes a more severe economic impact that could cause long-term disruptions in labor and productivity. 
Source: Boston Consulting Group

Global reinsurer Swiss Re anticipated that the COVID-19 outbreak will weigh on the global life and health (L&H) insurance sector in 2020, as it expected the worldwide economy to fall into a sharp recession. It projected aggregate L&H premiums to contract by 2.9% in real terms to $4.2 trillion in 2020. It anticipated the challenging conditions to have a significant impact on the life savings segment, which accounts for more than 50% of total L&H premiums, as the need to access cash funds from savings policies rises in economic downturns. However, it expected protection-type life insurance products, as well as traditional health and medical insurance products, to be less affected and to post a positive growth rate in premiums due to rising risk-awareness among customers in response to the pandemic. Also, it projected global life (including savings and annuities) and traditional health insurance premiums to contract by 4.4% in real terms in 2020 due to the COVID-19 outbreak. However, it considered that the impact of the pandemic on the medical insurance segment is hard to quantify, and expected global medical premiums to expand by a marginal 0.4% in real terms to $1.4 trillion this year. 

Further, it expected global L&H insurance premiums to recover and to grow by a real rate of 3.2% to $4.4 trillion in 2021. It attributed the anticipated rebound to strong new sales across all segments as lockdown measures are relaxed, as well as to the expansion of online distribution and the accelerated underwriting of products to adjust to the "new norm" of digital interaction. Also, it expected that life savings products will drive the recovery of the L&H insurance sector, but that such products could be less appealing for some customers amid low interest rates. It also considered that rising health risk-awareness will support demand for health and medical insurance. In parallel, Swiss Re anticipated that direct claims related to the pandemic will increase due to higher mortality rates and medical expenses, as well as to COVID-19 testing and costly stationary care treatments, such as intensive care. However, it considered that the impact of higher claims on global L&H insurers will be manageable as mortality rates are lower among insured individuals.
Source: Swiss Re 

Barclays Capital considered that the COVID-19 pandemic will exacerbate the pre-existing structural vulnerabilities of emerging markets (EMs) and will create new challenges. It indicated that EMs were already adversely impacted by the reversal of globalization even before the pandemic, which is evident in disruptions to trade agreements and in rising global protectionism, as well as in lower foreign direct investment inflows from advanced economies to EMs. But it said that the virus outbreak weakened global demand, accelerated de-globalization, reduced international mobility and caused a deterioration in the fiscal profiles of some EMs, which have added to the latter's vulnerabilities. 

Also, it considered that the virus-related lockdown measures are likely to have a long-lasting impact on the services sector in EMs, given that the sector is not geared towards work from home. It added that the drop in mobility due to the pandemic will not just negatively impact tourism-dependent countries, but will also affect economies that have a large aviation sector. It said that the expansion of international travel hubs in EMs was one of the major contributors to the increase in their travel and tourism receipts during the last decade, and added that 10 out of the 20 busiest airports in 2019 are in EMs.

Barclays anticipated that the COVID-19 crisis will also significantly weaken the public finances of some EMs. It classified EMs according to their ability to manage the fiscal deterioration. It noted that "frontier" EMs may need to rely on support from international financial institutions and on debt relief, given the absence of large local markets to finance their wide fiscal deficits. It also expected the pandemic to exacerbate the fiscal vulnerabilities of more "challenged" EMs, such as Brazil and South Africa, which would prompt them to issue more debt denominated in local currency. But it said that "near-developed" or "advanced" EMs, such as China, Russia and South Korea, will continue to have manageable debt and financing profiles. 
Source: Barclays Capital