What's happening in the industry?
We can see a silent tectonic shift
happening in the industry right from the top deck.
Electronic and Digital revolution
initiative
During the course of the year IA
promulgated the Electronic Insurance Regulations thus paving the way for
InsurTech companies to set shops and flourish. It is an admission that Digital
& Technology is here to stay. Companies will have to adopt or perish. We
see close on the heels the Central Bank also opening a separate division for
Fintech. Does this mean that open banking system is a reality?
Is it only for General Insurance?
No. Life Insurance has also seen its major
change. With the introduction of BOD 49; it has fundamentally rearranged the
distribution model. This has paved way for a more balanced and sustainable
growth. Most importantly the distributors have been protected whilst the
adjustment is currently underway.
Challenges or opportunities
Whilst the pandemic pushed the industry out
of its comfort and adopt technology as a way forward; it is no more a
“disruption”. It is a new normal. These are going to present its own unique
opportunities and challenges too. One of the most important decisions that the
industry has to make is what is the ideal size of the company? What level of
automation is it willing to undergo? Does the company want to build all of it; or
adopt smart InsurTech Startups to deliver better results, reach and
penetration. A newer world order calls for a newer thinking!!!
Digital First
2020 will go down in history not just for
the pandemic; it will record positively how certain companies adopted and made
it a “Digital First” strategy. Some companies rejigged their business model to
adopt a regional approach in terms of spread of risks and not be totally
dependent on their host market.
Every economic downturn has always seen new
capital coming in. We have seen companies take an objective view and exit the
market in this region. This time too it is no different. Whilst one MNC
shareholders have accepted the offer globally, another MNC have exited the
region. The best part is that the region has stepped up and have acquired the
company making it a truly regional player. Whilst we are seeing a shakeup on
the top deck; will the rest of the pyramid also see some activity? Takaful
space for sure is seeing activities with mergers and acquisitions. Insurance
Stocks on the Stock Market is also seeing a renewed activity with some
investors actively investing across the industry.
Good news!
UAE government has allowed 100% foreign
ownership which should give the economy a major boost and arrival of new capital;
the insurable market will see an expansion. With Dubai Nasdaq considering an
exclusive platform for SME listing, this will not only open new avenues for
investing for the insurance companies, it will help the industry to open up and
flourish.
Opening of bilateral relationships with
Israel is expected to see a flurry of activity on the InsurTech space. DIFC
& InsurTech Israel have had their first virtual road show. The reforms are
on its way.
Do we then get to see big capacity
providers and smart insurance providers calling the shots in the future? Is the
time ripe for to bring in the next disruption in the market.
I believe this shake up and rearrangement
is just great. Whilst the general expectation was IFRS 17 implementation will
provide a window for non-serious players to exit, I believe that disruption has
already started even before that.
Welcome to the new insurance order and to
the digital revolutionary journey!!!!
With Warm Regards
Sridhar Subbaraman
Founder & CEO
