Covid-19 lifts life insurance business in the UAE

The life insurance business has gained momentum after the Covid-19 pandemic as more people opted to secure insurance coverage to protect themselves from unseen risks, says an industry expert.

Mufazzal Kajiji, CEO, Zurich International Life (Middle East), said the recent pandemic created awareness about life insurance as roughly one in every four claims is related to Covid-19.

“I would also note that the pandemic has drastically altered the benefits claims landscape. Within life insurance, Covid-19 was the second highest cause for life cover claims over the past three years, with roughly one in every four claims is related to Covid-19,” Kajiji told Khaleej Times during an interview.

“In the future, I expect to see a growth in demand for critical illness and life insurance cover due to the growing awareness of health risks and life protection coupled with greater access to information and insurance solutions,” he added.

Recognised, trusted brand

Zurich International Life Limited is a part of Zurich Insurance Group and was established in the Isle of Man, which is licensed by the Isle of Man Financial Services Authority with established and registered branches in the UAE licensed by the Central Bank of the UAE.

In the UAE, it is registered under UAE Federal Law Number 6 of 2007, and its activities in the UAE are governed by such law.

In Bahrain, it is licensed by the Central Bank of Bahrain, while the Qatar Financial Centre Regulatory Authority authorises its operations in Qatar.

“With a 35-year presence in the region, Zurich International Life (Zurich) offers life insurance, critical illness cover, and savings solutions that help customers plan and prepare for the future. We also have bespoke employee benefits solutions, designed for our corporate customers to help them attract and retain the best talent through attractive employee benefits packages,” Kajiji said.

“Our extensive experience in the region has resulted in a deep understanding of the market, and Zurich is now a recognised and trusted brand in the life insurance space with a significant market share in the region. We also manage workplace savings programmes for 30,000 employees from more than 1,600 companies across the Middle East,” he said.

Future growth plans

Kajiji said Zurich International Life (Middle East) is taking many initiatives to expand its regional footprint.

“Over the next few years, our focus is firmly on diversifying our portfolio, building strategic partnerships, and increasing our customer acquisition targets,” he said.

"In the long term, we are looking to increase our regional footprint and prioritise improving customer experiences, with several initiatives in the pipeline at the group level. These include re-engineering our products and digitalising the entire customer journey for greater ease and accessibility.

"Similarly, we are in the midst of exploring partnerships and affinities through digital channels or contributors,” he said.

He said the DIFC Employee Workplace Savings (DEWS) scheme, of which Zurich Workplace Solutions is the plan administrator, is another important initiative for us. This year, the scheme has expanded in scope and scale to include employees of Dubai Government entities,” he said.

“We see a lot of potential in our workplace savings proposition and look forward to extending it to free zones and other private companies, not just in the UAE, but other markets in the region,” he said.

Core growth markets

Kajiji said the company will improve its present setup in some countries in GCC, but has no immediate plan to explore new markets in the region.

“We have plans to scale up across the UAE, Bahrain and Qatar. At present, we have no plans to penetrate in new markets, as the existing markets that we operate in remain underserved,” he said.

In reply to a question about the outlook for the insurance industry, he said the insurance industry is currently underserved and offers a myriad of opportunities to expand through awareness-building of insurance benefits. More than half of the population in the region are under the age of 30 – another indicator that the insurance industry has plenty of room to grow, he said.

"Take critical illness protection as an example, there is burgeoning awareness around emerging health risks and its impact on financial security. However, a vast majority of people are still not fully aware of the options available,” he said.

A common reason deterring people from purchasing insurance is a misconception that a pre-existing condition like diabetes, obesity, heart disease, or a family history of the same, can cause an application or claim to be rejected or raise the cost of the premium drastically – however this is not the case, Kajiji explained.

“To ensure that more people are securing themselves through critical illness plans, we must continue to educate both existing and prospective customers so that they can understand our offerings, at the same time communicating in a language that is easy to understand,” he said.

“In a survey, we conducted with YouGov last October, we surveyed over 500 UAE-based respondents to understand how they would cope financially should they be diagnosed with a serious illness. According to the survey, more than six in 10 respondents were very or extremely worried about falling victim to a severe illness in the future.

"Almost eight out of 10 respondents were either very or extremely worried that becoming seriously ill would deplete their savings, with more than half of the respondents stating that they believed they could only manage for up to three months financially, faced with a loss of income due to a serious illness,” he said.

Challenges in post-Covid-era

Kajiji also shared his strategy for handling the Covid-19 pandemic and said it was a great experience to serve the people during this challenging time.

“With the onset of the pandemic, just like for any other business, we faced certain challenges. However, in the post-Covid era, we’ve also been presented with numerous opportunities to grow,” he said.

“For instance, with savings, we have broadly observed that a growing number of people want to explore avenues for this and to invest. This is in part driven by the UAE government’s promotion of a savings culture as seen from new initiatives such as the workplace savings schemes,” he added.

As mentioned before, for DEWS, the UAE's first funded and professionally managed EoSB scheme, which is administered by Zurich and first launched in DIFC, the company has seen a significant uptake and expects this to grow in the future as well.

“This partnership is a testament to our efforts in supporting the government’s vision to attract the best talent available to the UAE and ensure it is one of the best countries in the world to live and work in,” he said.

“We’ve also seen overall health and well-being becoming key customer priorities. The pandemic has pushed the importance of robust health into sharp focus, as well as the importance of ensuring prudent lifestyle choices and investments to help reduce preventable health risks.

Pandemics, natural disasters

To a question about the impact of a pandemic, natural disasters and climate change policies on the insurance industry, he said it is always important to cover risk factors to remain resilient during difficult times.

“Certain pandemics can be categorised as ‘black swan’ events, which are negative events or occurrences that are impossible to predict. Climate change and natural disasters, which sometimes go hand in hand, are happening right now as we have seen from the recent disastrous floods in Pakistan or the unprecedented summer heatwaves in Europe. More and more, we are seeing climate modelling and risks becoming factored into governments’ and businesses’ future planning,” he said.

He said pandemics, natural disasters and climate change all potentially disrupt economic activity and hamper social development efforts significantly.

"For the insurance industry, I would note that there are both opportunities and challenges,” he said.

For example, with the Covid-19 pandemic, many countries have mandated travel insurance for tourists that include Covid-19 coverage, leading to record growth for insurers. But at the same time, health insurance providers have had to adapt as well and ensure contactless and digital services for customers, as well as expand telehealth service options, he said.

On climate change and specifically decarbonization – with three countries in the GCC region already having announced net zero targets by the midcentury – a new business and risk landscape has emerged, and insurers have to rethink their long-term strategies, he said.

"We need to understand better and evaluate both the physical and financial risks of climate change, while adopting a more forward-looking view based on various climate scenarios,” he said.

New products, solutions

To a question about introducing new insurance products, Kajiji said Zurich accords top priority to customer satisfaction and will take every measure to protect them from risk factors.

“Over the next couple of years, our plans will revolve around embedding insurance products and solutions in the lives of our customers. As insurers, we believe insurance must be made more contextual and intuitive, while customer journeys should be more service oriented,” he said.

“And our energies will be directed towards building awareness among our communities and promoting insurance as a service,” Kajiji concluded.

— muzaffarrizvi@khaleejtimes.com

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