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RSA M.E. is the second deal NLGIC Group has been involved in the UAE. Post the latest acquisition, the Omani insurer sees growth over a wider geography and business lines, given RSA M.E’s strengths in general insurance. Image Credit: Supplied

Dubai: When it comes to deal-making in the UAE this year, the likes of Mubadala, ADQ, IHC, ADNOC and Aldar have been catching much of the limelight. When those deals extend into the billions of dirhams, it cannot be anything else.

In Dubai, the IPO pipeline and the response to DEWA, Tecom and Salik have managed the same sort of deep interest in financial circles. So have the fintechs and all of the digital ventures that have clocked sizeable interest – the mortgage portal Huspy, and the BNPL players cashew and tabby.

But there is one category within UAE’s wider financial services that’s been just as active – insurance. Already, there have been two separate mergers – Dar Al Takaful and Watania, and now, Takaful Emarat and Salama.

Then there was the one that saw Oman’s National Life & General Insurance Co. (NLGIC) take ownership of the RSA Middle East. In an interview, Martin Rueegg, Group CEO of NLGIC Group talks through the reasons for the RSA deal.

Was the RSA deal your first direct exposure to the UAE insurance market?

Both RSA and NLGIC had existing businesses in the UAE (since) a long time back. With RSA M.E. owning non-life products, it needed experience in the Middle East health space and additional capabilities to expand the regional footprint and take our business to the next level.

NLGIC has local experience and resources to offer and set out a clear intention how they could help RSA M.E. businesses. There is common interest to grow and expand in the region, with the ambition to become a leading multi-line insurance company.

NLGIC is the largest insurance company in Oman with branches in Dubai, Abu Dhabi and Kuwait and a strong presence in health insurance in the UAE. And RSA Middle East is a leading provider of property and casualty insurance in the Middle East, operating in Oman, Saudi Arabia, Bahrain and the UAE.

Why go for RSA?

NLGIC (already) has an In-house claim administration managed by Inayah TPA LLC. NLGIC acquired Inayah, a UAE based TPA a few years back that manages the medical network as well as claims in UAE. A large chunk of claims is managed by digital technologies like robotic process automation for faster claims resolution.

Success in health insurance segments is attributable to good underwriting practices, efficient claims management, and medical service provider network management. Medical claims are managed in-house, which makes the customer claims experience simpler and faster as compared to an external TPA, where it would go through an intermediary claims process and may cause delays.

The NLGIC Group now comprises six companies: NLGIC, RSA M.E., Al Ahlia Insurance Co., Al Alamiya for Cooperative Insurance Co., NLGIC Support Services Pvt. Ltd., and Inayah TPA llc.

The insurance space has been seeing some fairly big consolidation – do you see this trend continuing?

The insurance market across the Middle East is significantly multifaceted. This holds true - particularly - in the GCC where you have companies that are substantially diverse in their services and offerings. Fundamentally, consolidation seems like a natural response to an industry that is as overcrowded and complex as ours in this market.

The integration between RSA M.E. and NLGIC has helped the newly formed NLGIC Group expand its customer reach across the region, while also bringing together potential synergies in terms of resources and technologies to provide a wider range of insurance products.

What’s your current stake in RSA Group? Any set plans to raise this within a certain timeframe?

Further to the signing of a SPA in April, and after obtaining relevant approvals, NLGIC has completed the transaction which will see RSA M.E. become a wholly-owned subsidiary. NLGIC has two subsidiaries - Inayah TPA, which is a third-party medical network administrator, and NSSPL, based in Chennai (India), which handles the back end insurance support services like IT and claims management.

This transaction can be considered as a strategic deal in the sense that both companies complement each other. NLGIC has been very strong in the life and health Insurance and RSA M.E.’s expertise lies in general insurance.

Opportunities like implementation of compulsory insurance, improvement in economic activities in the region post-pandemic and a growth in the number of a well-aware young population would also help boost the industry.

The insurance penetration in the GCC is very low at 1.9 per cent as compared to the market average of 3.4 per cent in 2020. Insurance players need to work on educating and sensitizing customers on the need for insurance, help and guide them to get the right insurance solutions, and making insurance affordable and accessible.