The Dubai International Financial Centre is a hotbed for financial innovation, but what does the future hold for insurtech and the disruptors looking to shape the market?
Disruption is happening in Dubai, and it is already making a big difference.
Walid Daniel Dib is the co-founder and project lead at Addenda, a technology firm using blockchain to revolutionise reconciliation in the motor insurance industry.
“What used to take six months to three years to be reconciled for motor insurance subrogation is now being down in nine days,” he says. “This is disrupting how motor insurance works, and from a customer service point of view, people are getting a replacement car much faster, which gives a much better customer experience.”
And Turnkey IS founder Stuart Taylor says the success of such disruptive technologies will be down to the education of industry incumbents.
“A lot of businesses want to tick the box when it comes to technology, but there is an understanding issue about what disruption is,” he says. “We are trying to educate people of the business need behind these new technologies, but there is still a fear from some businesses in the UAE about jumping on these technologies, making something happen and doing something differently.”
But Charles Taylor Insuretech chief commercial officer Tony Russell says the real issue holding back further change in the Dubai insurance market is fear of change and fear of disruption.
“Disruption might not be the right word, because really, disruption just means change,” he says. “As IT vendors we have a fantastic ability to create these new words that scare people because they don’t know what it means.
“Disruption means different things to different people – for me it is a new business with a new idea that comes out of nowhere. In our business, we are much more interested in working with the established players in the market and looking at two things: health and wealth.
“Health and wealth are the two key things that any company needs to do, either sell more or cut costs, and insurance is no different.”
And Russell held up the London market as an example of an industry sector that, with a 41% expense ratio, needs to embrace change and technological advancements or risk not having a future.
“If London doesn’t change it is going to go out of business,” he says. “That might sound like a very dramatic thing to say, but Lloyd’s are struggling and they need to shake things up and start using technology to their advantage.”
But Dib says that insurtech developments are now beginning to gather pace in Dubai and the surrounding region.
“Insurtech is starting to pick up pace,” he says. “I am surprised and a little overwhelmed by the interest we are seeing in insurtechs.
“But you have to understand the culture of the region, and that is why I am a UAE-based company. I don’t believe that deals are made in boardrooms, they are made over coffee, and you must explain exactly what your story is, what the benefits are, and then you will get the trust [of your partners].”