With the continued growth of e-commerce in the UAE – Dubai Chamber estimates that the country’s e-commerce market will be worth $10 billion by the end of 2018 – the local insurance industry is undergoing a shift towards the aggregation model. Just two years ago, online car insurance sales accounted for less than 1% of the UAE’s market, but today that number is closer to 10%.
And having launched the Middle East’s first commercially viable insurance aggregation model, yallacompare is now the space’s clear leader, accounting for over 76% of online insurance sales in the GCC, according to statistics from Payfort, the online payment gateway.
“Aggregators are quickly becoming the preferred channel for Middle Eastern consumers looking to buy insurance. The growth we’ve seen over the past two years illustrates how much latent demand there was for the industry to move online,” said Jon Richards, CEO of yallacompare.
“However, while this shift is happening rapidly, there’s a long way to go before the industry catches up to the likes of Europe or the United States. We pride ourselves on our slick and high-tech front-end, but around the back some manual intervention is still required in the majority of cases. We expect insurers to continue to invest in technology with the ultimate aim of moving towards an entirely automated process. That’ll be good news for consumers, who’ll see cheaper premiums thanks to the lower operational costs borne by insurers.”
As the industry moves towards an automated, technology-based marketplace, there is a big opportunity for progressive insurers to gain market share. Watania, which was named Most Progressive Insurer at the yallacompare Banking and Insurance Awards 2018, has embraced the aggregation model and sought to use it to gain a competitive advantage.
“We’re pleased to work with leading aggregators such as yallacompare, as they’ve helped us grow our business enormously in a relatively small amount of time. yallacompare’s partnership approach to working with insurers has helped us shape new products, and that’s thanks largely to the fact that they have more data about the insurance market than anybody else,” said Murali Aravindakshan, Head of Sales and Distribution, National Takaful Co., Watania.
“Going forward, we’d like to see more efficiencies driven by technology and aggregation, so that we can offer better and more affordable insurance products to our customers. Working with aggregators like yallacompare will allow us to do this.”
Indeed, yallacompare’s partnership approach is not only benefitting insurers, but is also netting real savings for consumers. The comparison site has been able to leverage its position as a trusted partner for insurers to obtain exclusive rates for its customers.
“Our work is allowing consumers to save even more money on their insurance, which is hugely important during a time of relatively low consumer confidence,” said Richards.
“Our Consumer Confidence Tracker for the first quarter of 2018 found that over 40% of UAE residents are less confident about their finances than they were at the same time last year. By offering exclusive insurance rates, we’re helping to alleviate at least some of that stress.”
Going forward, yallacompare expects the aggregation model to continue developing in the Middle East. Richards believes that, within the next decade, the UAE will mirror other markets with the majority of insurance transactions taking place through aggregators, and revels in the opportunity.
“Going by the numbers seen in more developed markets, where aggregators account for around 70% of insurance sales, we’d expect the aggregator to be the most common sales channel for Middle Eastern insurers by 2022,” he explains.
“We’ve shone a light on the industry, and now the market is full of competitors – which says something about its inherent strength. Some of those competitors have already left, but on the whole, competition is a good thing. It’ll bring more insurers online, and it’ll drive innovations that result in less expensive premiums.”
While these innovations have largely been confined to the UAE so far, yallacompare is already looking to the wider Middle East. The company will launch insurance comparison portals in three new markets this year, allowing even more people to save time and money on their insurance.