The reinsurance industry needs to support insurers in creating and developing new products to address low insurance penetration in the Middle East & North Africa (MENA) region, according to Salvatore Orlando, Head of Middle East, Africa and Russia at PartnerRe.
“Low levels of insurance penetration are a global problem, but one that is especially acute in the MENA region,” Orlando said in the 2018 annual MENA Insurance Pulse report, published by Dr. Schanz, Alms & Company.
He continued: “The significant under-insurance we see in the MENA region represents a major opportunity for the insurance industry – and reinsurers have a vital role to play in supporting their insurance clients as they develop new and innovative solutions to address the needs of policyholders.”
Orlando explained that many reinsurance companies still consider themselves to be merely a capacity provider for their clients, but stressed that being proactive is required to find ways to add value to insurance clients by creating new products and opening up new revenue streams.
Much recent innovation has been a result of growth in the InsurTech sector, with companies developing smart insurance products that meet the needs of consumers and businesses in MENA by leveraging technological advances such as artificial intelligence (AI), robotics, machine learning and blockchain.
“One significant obstacle insurers face when trying to sell insurance products to consumers in MENA is that very few of them have bank accounts,” noted Orlando. “This is obviously a challenge for the banks as well. To overcome this, banks have enticed new customers into opening accounts by offering loyalty programs that reward them with insurance coverage.”
He suggested that there are many similar untapped opportunities available among insureds whose needs are not addressed by existing products, asserting: “Reinsurers can help their insurance clients create these kinds of forward-thinking and creative products by providing market insight and assistance with structuring the policies.”
War and famine have also led to mass migration and further insurable perils in the MENA region, with many households reliant on the money that migrants regularly send home.
Orlando explained that PartnerRe had recently worked with a primary insurer to provide micro-insurance for people sending remittances, and who are vulnerable to circumstances such as illness or the loss of a job.
“Together with our client, we partnered with a fintech company that provides the technology to allow millions of customers to remit money to their families,” said Orlando.
“We worked with the insurer and the fintech business to create a product and pricing structure that was distributed to users digitally. The remittance company was then able to offer its customers insurance, and our client was able to tap into a new stream of digital revenue.”