Where is the UAE’s insurance industry headed?
Insurance providers in the UAE have to adopt a digital customer-centric approach to ensure long-term growth
The pandemic has fundamentally changed people. While that might be a bold statement, most industry experts – across sectors – will attest to the fact that consumer behaviour has transformed, although it remains to be seen whether the impact will be temporary or permanent. Looking at the UAE’s insurance sector, the change in consumer attitudes had a direct bearing on the industry’s outlook. “Prior to Covid-19, there was less of an immediate focus on protection by consumers in the market. As 2020 progressed, however, we started to see a trend that saw people re-assess their priorities when it comes to insurance cover and shielding themselves and their families from risks posed by death, disability and long-term illness. This translated into a tangible shift towards financial protection and in their expectations from insurance providers,” says Simon Price – head of Market Management at
Zurich Middle East.
A recent survey conducted by YouGov and commissioned by Zurich in the UAE stated that more than half of the respondents – across all age categories – said that due to Covid-19, they were somewhat likely or extremely likely to consider purchasing life or critical illness cover, with more than 63.3 per cent of respondents aged 18-34 saying they purchased life insurance since the start of the pandemic.
“This statistic demonstrates the real-world impact the pandemic has had on people’s purchase behaviour. While there are people who believe insurance is not a necessity and live under the misconception that it’s rather expensive, or that they do not need it because they are young and healthy, the pandemic has certainly caused a lot of people to reconsider and we have seen a shift in mindset,” explains Price.
“While the Middle East insurance market is underpenetrated, the pandemic has been instrumental in driving a new wave of demand in the UAE. Life and health insurers witnessed an increase in the number of claims during the past year, where individuals required hospitalisation and medical attention, as well as cover for deaths,” he adds.
Stefano Nalin, EVP Business Development at Abu Dhabi National Insurance Company (ADNIC), also credits the way the UAE’s insurance sector handled the pandemic. “The industry swiftly, adroitly and effectively implemented measures to help individuals and businesses stay safe and recover, adapting both coverage and operations to meet new risks and new requirements.”
He adds: “With the end of the pandemic now in sight, one legacy may be the emergence of a more mature and sophisticated UAE insurance sector. The pandemic has certainly focused people’s minds on the importance of protecting themselves against risks, while the more sophisticated products and services born from the massive innovation seen over the last year may be the catalyst for significant growth in the industry.”
TECH GROWTH
Predictably, one major trend that has emerged in the insurance industry is the accelerated adoption of technology. On the consumers’ end, individuals increasingly prefer to research and purchase insurance options digitally – especially with the rise in the number of online platforms that offer comparative analysis of the different packages available in the market.
A global report by IT firm Capgemini last year found that policyholders’ willingness to purchase insurance from bigtech players increased from 17 per cent in 2016 to 36 per cent in January 2020 and 44 per cent in April 2020. “To compete with bigtechs, insurers need to focus on critical priorities which are important including delivering superior customer experience (94 per cent), crisis-proof processes (90 per cent), deliver real-time response (87 per cent), be a caring partner (86 per cent), and have insurance-as-a-utility (70 per cent), the report stated.
It also found that insurance providers are falling short when it comes to utilising the cloud and open APIs (application programming interfaces). Among
the survey respondents, only 19 per cent said they have touchless processes, 29 per cent have humancentred design capabilities and digital-ready systems, 38 per cent have implemented open APIs, and 48 per cent have a cloud-native enterprise.
However, insurance players are recognising the need to embrace digital transformation to drive operational agility and ensure long-term growth, says Price.
“Digitalisation has definitely become more prevalent and has played an incredibly important role over the past year. To meet customers’ growing demands and to help them during their time of need, it is essential for businesses to adopt new technology. In the past year, most businesses have deployed new technology that has enhanced customer service, putting more emphasis on user-friendly platforms that can be accessed from the comfort of their home. This also helps businesses stay relevant in today’s everchanging market,” he says.
According to Nalin, the key to successfully implementing digital transformation is about putting people first.
“Investments into technology over the last year have not only met safety criteria and supported customers through the pandemic, they have also served to move the industry forward into the 24/7 digital realm. Moving forward, it is very much about providing customers mature and sophisticated offerings across channels and consumer line products. Digital transformation is about constantly updating and modernising digital experiences. Gone are the days when general site updates were sufficient in aiding customers, because in an era where digital means dealing with multifaceted integrations, multiple systems and services and deliveries across a variety of channels and devices, then customer centricity means an entirely relevant and seamless experience anywhere, anytime, anyhow,” he says.
“This change, perhaps more than any other due to Covid-19, is one the UAE’s insurance sector will have to realise is going to be forever ingrained into customer culture. Quite simply, it is a matter of fact that ‘24/7 consumer culture’ is now permanent,” Nalin adds.
GROWTH PATH
Looking ahead, there are potential opportunities to explore across all verticals within the industry. “The rising cost of healthcare alongside the pandemic has created an upsurge in demand for protection, particularly critical illness insurance, to bridge the gap between any health insurance and actual costs of treatment for serious health conditions,” says Price.
With life insurance penetration in the UAE currently at 0.5 per cent, there will likely be a growth in that segment, especially since Covid-19 has increased awareness of financial and health risks among consumers.
“On the macro-economic level, the UAE is currently projecting normal rates of growth, which would support demand growth across both the insurance retail and group segments,” he adds.
“Moving forward, it is very much about providing customers mature and sophisticated offerings across channels and consumer line products”
When people search for the secret to success, the focus should not be on general qualities, like ‘determination’ or ‘motivation’ – although both are important. Instead, a story often paints a more vivid picture. Rock climbing, for example, with its physical and mental challenges, can offer a powerful tale of what it takes to find success.
In 2009, Brymer & Oades published a paper on the effects of participation in extreme sports. Their findings may surprise you. Far from making you rash or reckless, it turns out that adrenaline-pumping sports such as rock climbing actually build your character, making a person braver, more risk-tolerant as well as more compassionate. I believe I have reaped these benefits firsthand.
Interestingly, Riyadh is home to some of the world’s most extraordinary rock formations, and Faisal’s Pinnacle is where my soul found its sanctuary in the extreme sport of rock climbing in my younger years. To a non-practitioner, rock climbing might seem like an extremely dangerous sport, even borderline deadly. Yet, there is a sense of exhilaration and purpose when you set out to conquer pristine peaks with nothing but your own hands and mind.
Soon enough, I found that my newfound passion for the sport aligned perfectly with my passion for leadership, teaching me the same principles for realising one’s true potential. Here are some key principles garnered from years of rock climbing that may help you on your own journey towards success.
ALWAYS AIM HIGH
Just as rock climbers strive to reach the top, true leaders seek to propel their businesses to new, often unimagined, heights of success. Their vision for their personal career and the organisation’s growth may seem unrealistic to other individuals, but it’s the very oddsdefying nature of their goals that drives them to maintain the discipline required to meet the challenge. After all, a person is barely motivated if their goals are easily attainable. There’s a reason why rock climbing is an exhilarating and addictive sport, while stair climbing is not. When I reached the summit of Faisal’s Pinnacle with my fellow climbers, we found a bottle and paper inside. When we opened the paper, we found out that only seven people had made it to the top before us. The sense of pride when we added our names was nothing short of inspiring.
SET A PLAN AND BE PREPARED FOR OBSTACLES
An expert rock climber is able to chart a route and stick to it. So should a leader. In a room full of diverse perspectives and competing agendas, a leader should have the clarity of vision to persuade — and inspire — others to defer to his or her set course of action. And just as important: you should have enough conviction in your plan to remain immune to the words of the naysayers that will undoubtedly cross your path.
This does not come by easy. A lot of planning and preparation is needed. When I set out a course of action for a business, the team and I spend weeks – if not months – plotting scenarios, conducting research and charting the future. This is exactly what extreme athletes do. They plan their trainings ahead of time and religiously stick to their plans. Preparedness is your protection against a change in weather and all other possible obstacles.
CREATE A WINNING TEAM
Climbers love being around other climbers. When the team are together on a mission, they are collectively committed to the task. While they are competitive as a group, they
don’t compete against each other; instead, they push and support each other to meet their common goal. Your fellow climbers need to be competent enough, ambitious enough, and driven enough for you to form the same level of trust.
The secret ingredient to a winning team is a leader that communicates well. Authentic communication creates the trust everyone needs. In group climbing, communication creates trust, which then creates harmony.
When you are 180 metres high on a rock, hanging by your fingertips and tightening your toes till you cramp, tired and possibly frustrated by waves of fatigue, you realise that your life is in the hands of the climber underneath you, who is probably cheering for you with all their might. As a leader you need to reciprocate with a cheer and an update on how the climb is going.
SELF-ASSURANCE IS YOUR AUTHORITY
When you’re climbing, there are times when fear or fatigue kick in. A good climber is able to rally their inner strength to surmount these momentary setbacks. Team dynamics are heavily influenced by individual personalities; often, it is the member that displays the most self-confidence who is accepted as the group leader and rises to the top of the ladder. Remember: Your authority is established by your temperament, not your rank or accolades.
GET INTO THE FLOW
Similar to many extreme sports, climbers talk about getting into the flow or what many athletes refer to as “the zone” – which describes an elongated period of focus. When in ‘the zone’, climbers lose themselves in the action and enter a mindset that creates a sense of euphoria and even blocks pain.
Similarly, a person seeking to achieve their goals needs to develop laser-like focus. By creating such a routine, you can set up conditions where distractions melt away as you enter the flow. In such a state of mind, decision-making and problem-solving will come to you with clarity and ease.
BE CERTAIN IN TIMES OF UNCERTAINTY
Once a climber has summited a peak, they must prepare for the other half of their job: a safe descent. Similarly, the head of a leading organisation has to prepare for the good times as well as the bad. Once their organisation has grown to become the market leader, they will face issues such as market relapses or disruptive innovation. They must know how to navigate these crises effectively in order to retain or regain their position.
These are just a few of the lessons one can learn from rock climbing. It may be a dangerous sport, but so is business. And only the fittest, most disciplined and most prepared of us survive both.
“The secret ingredient to a winning team is a leader that communicates well. Authentic communication creates the trust everyone needs”