Dubai: National Bonds’ unique product called “Sanadi programme”, which is a combination of a regular saving plan and a Takaful cover, has received encouraging response from part of the firm’s 830,000 clients.
“It’s a first of its kind in the industry because it combines a savings plan as well as Takaful, which would also have access to instant rewards and the annual profit that we give. Most of the insurance plans don’t give you instant rewards and it’s on the expiry of the unfortunate happening of the event, in our case customers can win prizes as well as annual profit that is credited,” Mohammad Qasim Al Ali, CEO of National Bonds told Gulf News in an exclusive interview.
The product offers protection for job loss, covering up to six monthly salaries, while protection against death, permanent disability and terminal illnesses covers up to 60 monthly salaries. Coverage for critical illnesses is provided for up to seven medical conditions over a maximum period of 24 months, along with provision for a second medical opinion and hospital cash benefits.
“We got a lot of enquiries through our call centre, and through our channels as well as through social media. The response so far has been encouraging,” Al Ali said.
National Bonds has entered into an agreement with Dar Al Takaful for the cover, and claims that they’ve negotiated the lowest rates from their partner.
“Most of the cover, which compensates in case of a loss of job are expensive, and unfortunately they put a lot of rules and conditions, which makes it impossible to avail benefits. In our case, we negotiated rock bottom rates from our strategic partner,” Al Ali added.
Customer centric approach
National Bonds got this new product designed after a survey from its existing and prospective clients. A survey by National bonds said about 38 per cent of western expats were concerned about the loss of job, while 34 per cent of Arab expats were concerned.
Only 20 out of 100 surveyed said they have Takaful cover, the remaining 80 per cent don’t have a Takaful. Whereas about 33 per cent of UAE women said they have an emergency fund. Eighty-four per cent of those surveyed said that their savings were not adequate. About 63 per cent of those saving in the UAE plan to increase their saving in 2016, while 31 per cent plan to start saving.
“I think that the first advice that I would give anybody is to pay through automatic deductions that is at least equivalent of 10-20 per cent of your monthly income. Any financial adviser would advise you to pay your self first and then pay your expenses. Many of them have so many expenses that after paying all our outgo, we don’t save, We want to change that formula,” said Al Ali, adding “good thing about that monthly saving plan is that it offers you that discipline. Our monthly saving programme is deducted from your payroll.”
Fees
The entry and the exit load has been a vital point of discussion among investors who intend to invest. Other mutual fund companies tend to charge clients on the higher side regardless of the fund’s performance. And National Bonds’ Al Ali is not very impressed with them.
“Unfortunately the financial market is not very customer centric. They think how to benefit themselves first through interest fees, exit fees. So by the time the fund reaches its maturity, the investor hardly get any benefit,” said Al Ali.
“If fund managers are confident about their performance and skills, they should lower their fees. It’s an ethical issue of whom do we look after first, do we look ourselves first or fund managers, or look after the bond holders,” he added.
National Bonds has a 1 per cent subscription fee, which is waived off if the client stays with them for six months. It levies a 2 per cent fee on credit cards, but waives that fee for clients who are more than two years old.
“We try to be as ethical as we can. National Bonds charge 2-4 per cent from clients, which is absolved if the client stays with them,” he added.
Even the fund delivers attractive performance. In 2015, National Bonds paid a maximum of 4 per cent of profit depending on the product.
“We continuously gauge through health checks and saving index, and we also conducted focus groups in Dubai and Abu Dhabi. Our philosophy is that the more you engage to your customers, the more they help you in designing the product,” he added.
Factbox: National Bonds may launch another savings product soon
National Bonds is looking to launch another product in another 3 months.
“We are looking at another products at the moment. We have a lot of insights from customers. It’s a variety of needs that we are looking at. Within the next 3 months one additional product that will be launched, and that will make a major difference in the way that we deal with our customers,” chief executive Al Ali said. He declined to give further details.
He also stressed the need for having products which cater to end of service benefits.
“There is a need for end of service benefits. We offer a combination of voluntary contribution from employees, and provident contribution, where the employer also contributes. We are still in discussion with the employers if they want to use the provident way or another way. We are talking with the government and also the private sector,” he added.
