Insighters signs brokerage deal with Al Fardan

Dubai: Unlike banking, the insurance industry has not been as readily accepting new platforms in their client interactions. It could also be that the nature of the industry goes against the need to do so, and clients themselves prefer the tried and tested methods.

That does not mean insurers are not trying. Insighters, a Dubai-based insurance brokerage, has aligned with Al Fardan Exchange to allow its policyholders make their annual payments through the latter.

Al Fardan Exchange operates 40 branches and once the policyholder makes the payment, the policy gets uploaded online. There is no service charge accruing to a policyholder using this channel.

As a start, Insighters is using this arrangement, which went live from April 1, on motor policies. Currently, it has a book of over 500 clients holding motor insurance.

"It's a fact that a majority of local insurance brokerages do not use third-party channels," said Siddarth Razdan, promoter chief operating officer and chief financial officer at Insighters. "But there are so many in-built advantages that come with such arrangements for both parties concerned."

Wide network

For the brokerage firm, an obvious advantage is that it does not have to invest on creating a wide retail network. In this case, Al Fardan Exchange has the network spread to be easily accessible for Insighters' clientele. Where the exchange operator benefits is a chance to tap into a new client base as well as the processing fee — paid by Insighters — from the transactions.

Currently, Insighters processes between 10 to 15 motor applications daily, and Razdan expects it to go up to 50 a day before the summer. "New car sales are definitely on an upswing, and the last few days have seen it go up further as buyers try to gain 100 per cent financing before the new Central Bank regulations come into effect," he added. (In a new set of requirements governing retail lending, the Central Bank has mandated that auto finance should not exceed 80 per cent.)

"Being a relatively new player in the market, Insighters is looking at winning marketshare in underwriting pre-owned vehicles, which is a category that is growing in double-digit rates over the last six months," said Razdan.

In the UAE, motor insurance premiums are an average 3 to 3.25 per cent. "I don't see the prospect for any changes in the rate regime in the short-term," said Razdan.

Bill collection: back to basics

Even if insurers are willing to take on new outreach platforms, their clients aren't.

Recently, a leading insurer decided to reduce the number of its bill collectors in the expectation that clients would either approach the company directly or go online to make their payments. It was also done with an eye on reducing the insurer's cost overheads. Things, however, did not work according to plan.

"We found there was an incidence in the number of payment defaults and policyholders wanted the face-to-face interaction with the bill collectors, many of whom they had known for years," said a HR manager at the insurer. "It was then decided by the company that we will go back to the original payment mechanism and we rehired the majority of collectors."