Sign up and be the first to know

About Hugh Terry & The Digital Insurer

Hugh Terry & The Digital Insurer Video

Contact Us

1 Scotts Road
#24-10 Shaw Centre
Singapore 228208

Write an article

Get in touch with the editor Martin Kornacki

email your ideas at [email protected]

Pre Registration Popup

itcasia2020 Registration Popup

Share Popup

Prime Member: Find out more

Access a unique programme!
  • 56 pre recorded lesson of online content from industry experts over 7 courses
  • The best in digital insurance for practitioners and by practtioners
  • Online MCQ after each lesson
  • Join the discussion forum and make new friends
  • Certificate upon completion to show your expertise and comitment
  • 3 months to complete
  • Normal price US$1,400 Your Prime member price is US$999
  • Access to future versions included in your Prime membership!
Become a member

Prime Member: Contact Us

REach out to us. Please fill up the form below
  • Let us know how we can help. You can expect a response within 24 hours

TDI PoV: The MENA insurance industry- headed for a fall?

What is a TDI Point of View (PoV)

A TDI PoV is a mini whitepaper where industry experts present their point of view on a subject related to digital insurance.

In this PoV, Frederik discusses how the insurance industry in the MENA region will develop over the next 5-7 years, how the current insurance players are reacting to this and why this is not the right strategy. The white paper further discusses the right strategic approach to cope with the market development.

Download the article as a PDF

The insurance industry in the MENA region is waking up, realizing the vast market changes happening all around. The incumbent insurers are approaching the changes in different ways, the large majority taking a ‘wait and see’ approach, closely monitoring more active insurers to learn from their endeavors.

The more active insurers are ‘doing something’, digitizing existing processes and products, enabling customer service and sales, and offering API connectivity to partners and third parties

Very few (if any?) insurers have gone ‘all in’ in the MENA markets, redefining products, services and processes from the core, in effect recreating the company on a digital platform with a comprehensive customer focus permeating the entire organization

Before diving into the strategic reactions taken by the insurers, it’s worth understanding what is happening in the insurance markets – or in the markets in general, as the overall market development is just as much a driver for the insurance industry as the insurance industry changes are

Driven by technology and people…

Most consumer technology is imported from outside the region, often bought through global, digital marketplaces instead of local companies or online portals (

This has at least two implications; first, the customers are accustomed to the newest and best of technology and, since the tech is bought online through global marketplaces, they’re used to state-of-the-art customer journeys and digital user experiences

Second, the online trading options results in reduced demand for local, digital marketplaces, so the markets have less incentive for investing in digital solutions capable of competing with the global players

There’s a growing gap here as the technology in the hands of the users, and their digital user experiences, are advancing faster than the markets are capable of keeping up with, because the skillsets required for advanced digital development are not present to the extent required – the demand for local high-end tech competencies has up till now been low as most technology is imported.

…fueled by restrictive market access

During the last decades, the market regulations have made it complicated for new entrants to enter the markets which has given the industry players comfort and kept the focus on competition and development inside the region (Alpen Capital)This is changing now with regulators being focused and proactive in their engagement with the insurance industry and more free-zones being established, allowing for easier entrance of international players

Looking at the insurtech scene, investments have predominantly been given to price comparison players, aggregating products and services already in the markets (Magnitt Intelligence), further keeping focus on existing products and services – outside the region, investments has been more diversified, spread across all lines of products and services, with a major share of investments allocated to insurtechs focusing on insurance process optimization and support (Coverager).

Market outlook

There is a false sense of stability in the current MENA insurance market. Insurers are well aware of the worldwide development, but lack the motivation to adapt to the coming changes at the scale required to stay competitive

Because of this, the markets are not expected to see significant changes in products, services or processes over the next years – there will be more digitized solutions, but all based on what’s already there in terms of products and services

A bubble about to burst?

The pace of the markets are bound to change. Customers are becoming increasingly more tech-savvy and used to the digital experience from international platforms, and the barriers to market entry are slowly diminishing – a perfect storm is brewing; tech-savvy customers in a digitally underserved market

It is important noting that this change will not be ‘more of the same, just digital’, but a whole new range of products, services and distribution models, all which require extreme adoptions – even transformations – from the incumbent insurers if they are to keep a significant market share in the future

Understanding why the market has been reluctant to change – apart from the reasons mentioned above – is important when defining the future strategic direction as the gaps from where the insurer is today to the targeted position will be instrumental in prescribing the best implementation strategy

Many incumbent insurers in the region face the same four major organizational challenges to responding effectively to market developments and changes in customer needs and expectations:

  • “Not on my shift”; the senior management of incumbent insurers are ageing with many CEOs looking forward to retiring within the foreseeable future. This may result in CEOs postponing large change initiatives to allow their successors to design and run the projects
  • Disorientation; the market change around the insurers in the region, and the change happening with the insurers outside the region, have left incumbents disoriented with no clear idea of what to do next. The world and markets are becoming so complex that it is easy to lose oversight and set a future direction for the company
  • Lack of talent; digital talent, transformation expertise, and agile ways of working, are prerequisites for organizations to succeed now and in the future – these skillsets are difficult to find in the region, creating a competence gap with the insurers
  • A Herculean task; as an industry, insurance organizations have historically been authoritative and bureaucratic out of need, required by strict financial and regulatory requirements. This has created rigid, siloed organizations that are very resistant to process and span-of-control changes

In sum, this paints a picture of an insurance industry that may be aware of change must happen, but in general, do not possess the toolbox nor the people to create and implement the necessary strategies and plans

What’s in store for the region

As mentioned earlier, and reinforced by the four major organizational challenges, the market development over the next few years is expected to keep evolving at a slow pace, focusing on perfecting and digitizing what’s already there in terms of products, services and distribution channels (see figure 2)Operations will be digitized to reduce operating expenses and we will see an increasing number of incumbents digitizing customer journeys, from quote to claim. However, it will not be significantly redesigned processes being digitized, but merely online versions of what’s already in place

Chatbots have already been implemented amongst few insurers but still as support bots (based on menus or decision trees) with no real interaction between the user and the bot – no conversational interface based on contextual AI

The mega-platforms are coming – and with them granularity and individualization

When the Big Tech (FAANG; Facebook, Amazon, Apple, Netflix, Google) decides to leverage their massive and very granular data on corporates and individuals for insurance (and banking), the insurance industry in the region will face a new challenge altogether

Not only will the industry face distributors capable of reaching customers even before the customer has realized the need for insurance (based on searches, online behavior and purchase history), but the distributors will have much more knowledge of the customer than the insurer, allowing for much more precise underwriting

Having access to this vast amount of data will render the traditional underwriting models useless, as new entrants will be quick to leverage big data with artificial intelligence and machine learning to offer extremely individualized premiums – for both corporate and private insurance

Following this, and further building on the expectations from the new consumers, Insurance-as-a-Service (IaaS) will be introduced, offering cover only when required and only to the exact limit needed. IaaS is enabled by wider use of Internet of Things (IoT), allowing the digital insurers to automatically register events that activates or deactivates the IaaS products

Examples could be home insurance being activated when sensors register there are no-one at home or a travel insurance that is activated when a person leaves the country (registered via geolocation services)

Claims will be connected to IoT as well (FNOL), and as AI develops, the majority of claims will be settled instantly and over time through smart contracts in the blockchain – the role of the insurer will be hosting the intelligent systems with a very limited number of people for personal claims support or surveying

Outlook for the incumbents – do or die

It should follow from the above discussion that incumbent insurers in the MENA region should be prepared to do even more to align their strategies and organizations to a new, agile and uncertain normal. Following the current strategic trajectory will not be a viable option in the long run; something must be done

The table below identifies three different approaches to securing the incumbent insurers a viable place in the region, also in the future


Increase capacity


Build a digital insurer


Redefine the core

What it is Significant increase in underwriting capacity enables the insurer to expand current market reach Expand the existing business model with a pure-play standalone digital insurer, leveraging on the existing customer base A complete redesign of the capabilities of the incumbent insurer, recreating digital processes based on customer journeys
Comments Given access to capital, this is a fast and solid way to expand and solidify a stronger position in the market A pragmatic way of creating the insurer of the future, ensuring a very fast return on investment through the existing customer base Reinventing the insurer can create a new and strong breed of insurers, building on best practices from ‘both worlds’
Concerns May be regarded as a short-term solution, as the strategy does not cater to IaaS, IoT or radical digital advancements required for a future strong position When matured, the digital insurer and incumbent should merge, preserving the agility, culture, processes and structure from the digital insurer An enormous task requiring time, investments, a strong will to change as well as access to the right (digital) talent to deliver in the new setup

Table 1: High-level strategic directions for insurers to survive in the MENA region in the future

Note: the whitepaper “Detaching the digital insurer” (Frederik Bisbjerg) presents the case for creating a digital insurer based in an incumbent’s existing customer base to secure immediate return on investment

Regardless of the strategic approach chosen, the change should begin immediately – major organizational changes are required in all three scenarios, and completed changes at scale takes time, effort, dedication and a laser-tight focus on the end-result and targets

It’s a daunting task to embark on a journey of these dimensions, but staying put will not be a viable option in the future MENA insurance market – not moving fast will render the incumbent insurer a target of acquisition or simply put the company out of business

The good news is that the markets are still growing and with one of the world’s lowest insurance penetrations, the right player with the right offerings will have a significant potential for cornering the market and create a resilient insurer for the future

For a further discussion of six operational strategies insurers can pursue in the future (after one of the above three directions has been chosen), please refer to the Point of View from The Digital Insurer, “The Future of Personal lines insurance

Download the article as a PDF


Livefest 2019 Register Popup Event

Livefest 2019 Already Registered Popup Event

Livefest 2019 Join Live Logged-in Not Registered

Livefest 2019 Join Live Not Logged-in