Dubai: The life insurance market in the UAE and Gulf had its decisive breakthrough when COVID-19 became a daily threat in 2020. There were far more takers for life policies in those first weeks and months of the pandemic than for full years before that, according to some industry sources.
Because selling life insurance has been a relatively difficult process among residents in the Gulf, most preferred coverage from insurers in their home countries. Insurers kept talking about creating market and user awareness, but something was missing in the overall take-up rates. That changed in 2020 with COVID-19, but has the pace sustained itself?
Speaking to Gulf News, Neeraj Gupta, CEO of UAE operations of India’s Policybazaar.com, has his say on where the business of insuring life stands.
Are we starting to see some serious momentum in the life assurance space?
The scope for life insurance products is projected to grow at a gross premium of CAGR 3.8 per cent from $3.8 billion in 2021 to $4.6 billion in 2026 in the UAE. Anything can happen at any moment, so life insurance is a safety net for the family in the event of a tragedy.
It is worth buying life cover and setting a personalized death benefit based on the policyholder's financial situation.
‘Term insurance’ is the most crucial step that everyone must take to ensure the financial protection of their loved ones. It is a pure protection plan that provides financial safety in case of the unforeseen demise of the policyholder during the policy’s tenure.
A sum assured - known as a death benefit - is provided to the nominee/family in return for a reasonably low premium paid during the pre-decided term. Only a term plan can protect the policyholder and his/her family against death, disease or disability.
Policybazaar.com does a lot of term- and investment products in the Indian insurance space. Are these different from what’s available here?
The Indian insurance market has some term plans that also provide maturity benefits in case the insured survives the entire policy tenure, helping the individual to fulfill their long-term financial goals. Also, in India, term insurance can help save taxes.
Will insurance premiums harden further in the wake of the sizeable payouts awaiting insured and reinsurers after the Ukraine crisis?
We do not see any current impact of it coming on the insurance pricing in the UAE market.
Policybazaar.com was among a five or six online-focussed insurance entities to enter the UAE market in recent years. Has the online ‘aggregator’ model you operate been a hard sell? (In the aggregator approach, independent agencies combine to offer standardized premiums.)
Earlier, a majority of residents in the UAE were accustomed to a very different approach than the aggregator business prevailing in other parts of the world. For both the banking and insurance needs, people here were more inclined towards offline involvement.
A fully functional ‘tech stack’ data structure allowed us to provide end-to-end customer experience - from purchasing the policy online to its issuance. Additionally, as a result of the pandemic, people in the UAE were more actively asking and buying insurance online. Thus, the insurance products are now far more digitally accustomed both owing to Covid-induced changes and customer demands.
Has COVID-19 spooked re-insurers into forcing higher medical premiums?
While global claims do play a definite role in product pricing, it does not significantly impact the pricing within a country. Re-insurers do look at claims experience and population demographics of a particular country while seeing pricing. We could see some impact from COVID-19 being passed on to health and term insurance products.
Any products other than insurance that you will now be looking to introduce?
On the banking front, we have recently partnered Al Etihad Credit Bureau (AECB) to help customers with real-time eligibility checks for credit card applications. This would help users to make informed financial decisions while having immediate access to their financial information to access their credit score instantly from our platform.
Also, for travel Insurance, which is now mandatory for any inbound traveler, we are going to go after it in a big way.
What is the main point of difference between the UAE and India’s insurance space?
The UAE insurance market is mainly driven by health and motor insurance. People are hardly aware of the protection plans. While digital acceptance for purchasing insurance and banking products is higher in UAE, there aren’t many digital-first products available.
Also, this market is a healthy mix of diverse diaspora where no one-size-fits marketing or product strategy works.