4 minute read
Tech for a good cause
from #229 - April 2020
In an exclusive, Michele Grosso, CO-Founder and CEO of Democrance, sheds light on the potential of technology in the insurance market
Tell us more about the insurance landscape in the Middle East.
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Insurance in the Middle East remains a very conservative industry, covering only the higher income, banked population. However, competition remains high, particularly so in a country like the UAE, where the population is small. In the UAE alone, we have 65 insurance companies and intermediaries, all fighting for the same share of the customer’s business with the same traditional products and offline distribution channels (agents, brokers and banks).
This leaves a whole segment that is untapped and not targeted by insurers today: digital- and mobile-first clients and an uninsured population that until recently, were beyond the purview of insurance. Today, both segments can be targeted by a fully digitalised and automated solution. Michele Grosso
What do you see as the challenges and risks affecting insurance firms in this market?
With so many competitors fighting for the same pie, it goes without saying that consolidation must happen. However, innovation is equally critical to spread out the existing pie and offer customers more pertinent solutions to their present-day insurance challenges. Regulators are also trying to establish minimum capital requirements to push for consolidation.
On the microinsurance front, Egypt is the only country in the MENA region today that offers microinsurance solutions. Here is an opportunity for us to introduce microinsurance and related solutions to the rest of the MENA market.
When you founded Democrance, where was the gap you saw that needed filling? Tell us more about your journey. 99 per cent of the low-income population does not have access to insurance, although they are the ones that need insurance cover the most. This remains my biggest driver, to democratise insurance.
Insurers in the region are yet to fully achieve technology integration and change the traditional outlook for customer acquisition. At Democrance, we hope to fill this gap. It provides us an opportunity to partner with insurers and enable their digital transformation to become relevant to their existing clients and accessible to new customer segments.
Are there more opportunities for insurtech companies in the GCC and wider Middle East?
Yes, today there exist ample opportunities in the region to help insurers expand their own serviceable addressable market, through increasing access to new segments of the population and through providing a mobile-first insurance experience to the same customers that expect similar digital journeys when they shop online for other products.
This is exactly what we do at Democrance: we help insurers increase their digital sales and reach out to new customer segments via the Democrance platform that automates and digitises the whole insurance value chain. We cover the front-end by allowing customers to buy, pay for, use and make their insurance claims via any digital or mobile devices. At the back end, we automate all the insurance processes that conventionally require manual and paperwork.
Insurers are already using our platform in eight markets in the MENA region, two in Asia and one in Latin America, for distribution and service via their own channels, banks, mobile operators, remittance houses and other distribution partners. We are currently in talks with banks to offer solutions to customer segments that may have already been contacted by other channels, such as outbound telemarketing, face to face interactions, follow-up and up-selling via mobile and digital channels. We believe we can be more effective in offering the right insurance top-up to new and existing insurance clients.
What is your outlook on this space?
We remain very optimistic. There is a lot of potential for disruption. The marketplace in the MENA region is now fully online and ready for digital insurance solutions.
In the last decade, the wider adoption of well tested and understood technologies across industries that enable electronic and mobile transactions, particularly conservative sectors such as banking, insurance and government, is helping to reduce barriers and friction across the board.
The key drivers are faster internet speeds across the UAE and higher mobile internet penetration. The UAE has also witnessed the opening of Alibaba and Microsoft datacentres in the region that are spurring cloud adoption.
We believe the major growth catalysts of this decade will include the traditional industries, with banks and insurance companies reducing their operating costs and improving ease of access to customers through sophisticated mobile and web-based experiences. The opening of WhatsApp’s API and business accounts is another facet that is already leading to substantially improved services across all platforms.
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