Innovation amongst MENA insurers – What do the insurers think?
by Amer Daya
Over the past nine weeks I’ve run a few posts in poll format designed to find out how the MENA insurance industry interacts with its public and develops market strategies. The findings have been very interesting and confirm the need for product reform, capacity consolidation, process innovation and forward vision planning. Although the number of voters on each post was modest, I do believe they are a true, humble sample of the current status quo.
Findings from the polls
64% of voters believe the public’s most important influencer to buying insurance remains price. Only 2% believe insurers’ performance and their prerequisite capital security should be an influencer. Whilst I agree that price is important, the public must be made aware of the content value and level of security their hard-earned cash is buying them.
91% of MENA voters believe that concerns over existing socio-economic and geo-political issues are the major drivers prompting the public to buy insurance. Okay, rightly so, given what the region is experiencing today. However, in the background it is unintentionally downplaying the silent rising danger of natural catastrophes: droughts, storms, insect infestation, earthquakes, flash floods, etc. Whilst MENA remains overwhelmed with its issues, nature is NOT taking a holiday in the region. The worrying signs are already there.
33% of voters equally agree that the industry in MENA does NOT cross-sell often enough between various lines, compile and manage quality data, and innovate enough for the sector’s performance to begin to compete with advanced world regions. These are essential core drivers for strong, sustainable growth and should NOT be downplayed.
74% of voters believe that a simple, uncomplicated personal lines claim still needs more than three days to be settled. In fact, 19% still believe it takes more than 13 days. This issue must be addressed by eliminating existing layers of administrative waste, outdated claims processes, and investing in transformation and automated technology. Certain advanced markets are now working against a horizon of a few minutes from a claim’s submission.
55% of voters believe brokers and agents to be the most popular insurance sales channel within MENA. Yes, sales dependency on brokers and agents remains very strong, but they will surely be losing ground to online, digital and automated business. The young and fast-growing MENA audience is fond of mobiles and handheld gadgets. This is going to drive strong interest in managing insurances online and ‘on the go’ without the appointment of intermediaries. Those intermediaries that develop their technology skills and capabilities shall continue to keep market share, otherwise the role of brokers and agents is going to be seriously challenged over the next five years.
56% of voters believe that the most visible transformation process in the MENA industry over the next five years will be in client care (30%) and claims payments (26%). Whilst I do not disagree, the counter votes are pretty close. The region must invest heavily in developing and acquiring the right talents. If change in the industry is going to be sustainable and long-term, it must be incubated within its Human Resources and talent development strategies. This should drive the required change in every segment of the industry and deliver the visible service transformation for the audiences.
51% of voters believe that the most in-demand product category within MENA over the next five years will be cyber and data. This is followed by personal and financial planning, which further reconfirms the earlier poll in which voters chose socio-economic concerns as the most inducing factor that drives people to seek better protection. The advent of automation, digital and data dependency are going to not only drive the demand for cyber and data products, but will also increase the rate that personal and financial products are traded online.
50% of voters believe that corporate governance has inhibited most MENA insurers from performing better in the region. More often than not, board structures and antiquated management layers, coupled with very centralised authority, limits talent development and thinking outside-the-box. Staff incentive programs, and professional development schemes underscoring productive team spirits and innovative thinking, are key for the region’s future success.
My polls have touched upon the most important aspects of the industry in the region and attempted to highlight its acute problems. It’s high time that issues holding back the region’s development for decades are addressed head on. The public’s awareness for value is now developing much faster due to the advent of the internet, social media, wireless data mobility and accessibility to universal knowledge. Most recently, COVID-19’s impact has highlighted the importance of quality data managment and technology in fighting the pandemic and virtually supporting business and communities even whilst being confined at home.
In summary, the polls have highlighted the following:
- Absence of quality data.
- Absence of cross-selling.
- Absence of innovation.
- Product pricing as a major strategy influencer.
- Simple claims payments delays.
- Corporate governance red tape.
- Monochrome product dependency.
- Client care and service.
- Claims and payments processing.
- Digital, social media, and data-dependent sales.
- Talent development and acquisition.
- Personal financial planning.
- Team mission-building and corporate vision-setting.
- Capacity and effort consolidation.
The polls have also highlighted these regional threats that must at all times be on the industry’s radar screen:
- Natural hazards.
The region is worried about its socio-economic issues. Such worries greatly influence its insurance buying cultures. However, geo-political issues are also visibly rising but my long-term worry is that natural hazards are silently increasing in frequency and severity. We are yet to witness a collective effort by the industry and local governments to address such current and future concerns. At the top of the pyramid is the availability and distribution of freshwater supplies, earthquake, tsunami and flash flooding risks, sandstorms and agriculture-devouring insect infestations.
Those providers who will innovate in how they advise, procure, service and retain business have a much better chance of surviving the challenging digital wave that will be sweeping across the region over the next five years.
I hope you found the polls and the above review useful. Reach out to us to see if we can help you weather change and retain your competitive footprint in a changing region. Get in touch with the author at: email@example.com