Dubai: French insurer AXA is looking to a second- or third-quarter launch for its life insurance and savings policies in the UAE. This will done through a new entity called AXA Green Crescent.
Last November AXA acquired a stake in Green Crescent Insurance Co. by converting bonds into shares. Getting full tilt into life insurance and related products can give AXA the propellent for the next round of growth, as the premium per capita generated from this line in the region is “one-tenth of a more mature market”, according to a top official.
“At this stage, we are looking at building our propositions,” said Cedric Charpentier, the newly appointed CEO of AXA Insurance (Gulf). “Our intention is to finalise the market study early this year. We could not sell it [life insurance] until now. so we have to make sure to have the proper marketing team and strategy in place, and also the distribution. I think this is something which will be key.”
“Of course, there could be some bumps along the way [for the broader insurance market in the region], but the fundamentals are good. And the populations will still grow.”
For the moment, the plan is to have AXA Green Crescent operate solely within the UAE. With the move, the insurer is also making a not-so-subtle statement of another kind. “The fact is that the AXA Group is here to invest in this region, and, most specifically, in the UAE, in the long term,” said Charpentier. “Some competitors — like Zurich — are pulling out for the market and it is not at all what we have in mind.
“We’ve been in this region for 65 years … this region is seen as a growth potential for the group. It was double-digit growth each year in the last four years and we’re growing faster than the market.”
AXA Gulf will continue to oversee the property and casualty lines as well as the growing portfolio that medical premium currently constitutes in its books.
Meanwhile, projections for what could be in store for the insurance industry this year are negative. Obviously, the sector will not be immune to the lower rate of projects being mobilised within the region, brought about by lowered government-led spending. Recently, Sanjay Jain, the Mena (Middle East and North Africa region) Insurance Advisory Leader at consultant EY, said: “While the global insurance sector is facing disruptive changes in the form of digital, Mena insurers are facing increased challenges due to oil price volatility. The situation in the UAE is further compounded by the changing regulatory regime, which will put additional pressure on insurers, particularly on the marginal players.”
Charpentier added the other downside to selling insurance here is the “price war which is going on”.
But hasn’t this been going on for years now? “I agree, but you can see that the results of the insurance market has deteriorated recently,” Charpentier said. “You can see that some actors are clearly suffering more than they used to do. I think the stock market [activity] that was supporting some insurance companies is less favourable at this stage.
“I think the [UAE insurance sector] regulator has done already a lot in trying to contain the insurance market behaviours. What they have done in the last three to four years is much more than what the mature markets have been doing. So the focus is very good. But still I believe there are some things to be done.”
