Jaffery speaks to Global Reinsurance about innovation in the Middle East
With insurance at the apex of its evolution with regard to innovation and InsurTech, emerging regions like are poised to steal the march when it comes to implementing change and utilising their problem-solving abilities. Global Reinsurance speaks with DIFC chief business development officer Salmaan Jeffery about innovation in the Middle East and the role the DIFC is playing in driving it forward.
How well-placed is the MENA region to explore InsurTech 2.0?
The MENA region is absolutely ripe for both disruption and continued penetration within the insurance space.
Relative to other global markets, there is lots of room for growth as penetration as a proportion of premium to GDP in the MENA region – and the MESA region to some extent – is low. Therefore, the medium- to large-term opportunity for insurance remains very high. This is exacerbated by the fact that the MENA remains a youthful population while East Asia, Europe and North America are aging populations. This suggests that the room for growth, and the premium growth both for retail and corporate insurance remains high.
So the question is what does insurtech have to do with all of this? What we’ve seen in other emerging markets is that technology has allowed industries to leapfrog forward [to the advancements of mature markets]. Currently, we believe the insurance space is behind the curve within financial services when it comes to innovation, business model, growth and fintech. So pairing low penetration with a youthful population at a time at which there is significant innovation, and room for growth, makes insurtech in MENA the right method at the right time.
What does the DIFC have in place to facilitate this?
In terms of DIFC, our role is threefold. First, we are literally a hub and a platform at the heart of this precise space. There is no other platform quite like ours, with the depth and the access to the MENA market that we have. Second, we have the region’s only financial-services focussed technology innovation hub – FinTech Hive. The third is that the DIFC is very much a part of the Dubai strategy of innovation and empowerment of the Dubai government and people using technology.
These three points support the broader context of the market.
The DIFC carries the mantel of the gateway to growth; how is innovation being used in an opportunistic and explorative way by the DIFC?
We have the distinction of both using technology and innovation – and promoting it. On the promotion side, we already have a number of financial and technology firms in the Centre - they’ve been operating for years, even before they were collectively called fintech.
We also have a deep ecosystem of financial services firms, including insurance firms, whose market and operational problems could be solved by innovation and fintech – innovation should occur to solve problems.
Furthermore, we have already started to invest and promote innovation. For instance, we are part of the Global Blockchain Council that is here in Dubai. We have used blockchain technology in our courts to registers wills, and we’re looking at a number of other platforms to develop for our banking and insurance community to use in the blockchain space.