Socio-Economic Outlook Of UAE
88% ex-pat population majorly from Asian countries, a high number of young populations, increasing household income is changing the buying behavior of customers from traditional to online led models.
More than 2/3rd of the population belongs to 25-54 age; the total population growing at 1.5% Y-o-Y depicts customer adaptability towards Fintech and Insurtech start-ups.
The economy of the UAE has been fairly dependent on the oil sector for its output. Yet, the contribution by the services sector to total GDP has been rising and was recorded at 53% in 2018. The growth experienced in GDP coupled with increasing initiatives from the government also depict a positive outlook for the businesses.
Housing Indicators: Declining house price index from 2014, especially in Dubai, restricting private investment. Index: 127.18 (Q2-’19), 173.8 (Q2-’14)
Banking Indicators: ~1.1 Bank account/person, 2.1 cards per person payment card ownership, rising NBFCs, Fintech start-ups depict rising financial literacy among the population
Healthcare Indicators: With 3,5% of GDP spent on Healthcare and rising aging population & changing lifestyles, UAE lags behind peer GCC inadequate infrastructure. E.g.: Hospital Beds- 14,200 (2019), Per Capita Expenditure $ 1,200
Overview of Insurance Industry In UAE
GWP collection stood at $12Bn, majorly led by growth in non-life insurance products of Health and Motor. Insurance of Persons and Fund Accumulation contributed 28% to total GWP collection. While UAE is ahead among the peer GCC countries in terms of insurance penetration of 2.9%, it still lags behind the average insurance penetration of emerging countries which stands at 3.2% and Global average of 6.1%.
Product Coverages: Third Party Liability: Covers only the damages caused by a third party such as due to accident/collision but not due to fire, theft, etc. Priced @AED 1,000 annually, comprises ~40% of total sales. Comprehensive: Covers all type of risks and provides protection to the vehicle, owner/driver, and passengers. Highly preferred by Cab Aggregators, Taxi Drivers @ AED 1,800 annually. (60% of Total Sales).
Business Model: Aggregators work with service providers (insurance companies, banks) to provide different products including Insurance, Loans, and Credit Cards etc. For every successful sale of a product through their website, aggregators receive commission/fees depending upon the product and type of agreement.
Organizational Structure: Majorly comprises of Telesales team/Customer support team to drive the sales of different products. In-house Website development is also hired.
Technology Stack: Aggregators built the website platform in-house driven by AI and running algorithms based on predictive modelling. CRM software is also procured from Third Party Vendors.
Competitive Landscape of Insurance Aggregators
Nature of Competition: Moderately concentrated among 5 aggregators: Yallacompare, Souqalmal, Bankonus, PolicyBazaar UAE & Compare4benefits.
Industry Stage: Early Adoption Stage (>~ Y-O-Y Growth)
Major Competing Parameters: Level of Traffic Generated &Conversion Rates, One-Stop Financial Service offerings, Claims Assistance, Partnerships with Providers, Speed of Policy Issuance/Renewals, After Sales Service, Training of Telesales, Credibility among Clients, Level of advanced tech integrated and Discount on Premiums.
Future Outlook of Insurance Industry In UAE
Insurance Penetration expected to reach between 3.2-3.5% by 2024; led by the increased number of policyholders covering the newer types of risks including cyber, renters, SME, business, customized insurance products. Introduction of Newer Business Models such as Pay per Mile by Beema (AXA Insurance) could attract price-conscious customers. Incumbents must strive to integrate innovation; creating a value proposition for customers.
Outlook of Insurance Aggregators In UAE
With rising awareness among customers to buy insurance policies and other banking products online, it would result in increased traffic by ~% till 2024E. Additionally, aggregators are also expected to promote being a one-stop solution provider for different banking products which is expected to increase the revenue by ~ during 2019-24E.
Ken Research analyses the high potential for scaling up the aggregator model to peer GCC countries and recommends certain measures to ensure sustainable growth of the platform.
Aggregators must also up-ante their technology stack capable of the satisfying customer directly from the platform and predict customer’s future buying decisions.
Time Period Captured in the Report: -
Historical Period – 2014 -2019
Forecast Period – 2019 – 2024E
Key Topics Covered in the Report: -
PolicyBazaar UAE Market Share
Commission Rate Aggregators Insurance UAE
Online Brokers vs Online Aggregators UAE
UAE Yallacompare Market Revenue Share
UAE Online Insurance Market Major Players
insurance market UAE
United Arab Emirates Online Insurance Market
UAE Fintech Market
Number of Insurance Lives Covered UAE
Car Dealership Sales Insurance
UAE Online Insurance Industry
Motor Insurance Declining Premium UAE
Life Insurance GWP Online UAE
Individual Life GWP Online UAE
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Ankur Gupta, Head Marketing & Communications