Derek, how long have you been at Assicurazioni Generali (Generali) in the United Arab Emirates?
Over five years now, but this is my 10th year in the UAE.
What have been the highlights of the past few years?
When asked about the development of Dubai, I tell people to google ‘Dubai 1990’. The image of a desert with six medium-sized high-rise buildings in contrast to present day is alarming.
It sums up the past few years from a business perspective – exceptional growth and multiple opportunities.
The move to Generali five years ago enabled my team and I to develop those opportunities extensively.
It has been an amazing experience to be part of an expanding city and region.
Its multicultural composition makes it a fascinating place to live.
And, while it has had its challenges economically, it has faced up to these, come back stronger and offers much potential for the future.
What is the biggest challenge you have faced as director of intermediary sales in the UAE?
Proconsumersim. Historically, consumers have demonstrated a degree of apathy towards financial services but over the past decade the world has experienced a number of seismic shocks – the on-going global terrorist threat, multiple wars, earthquakes, tsunamis, continuing economic unrest, the bank crisis, national debt problems and personal debt issues.
These have had a profound impact on consumer confidence and are affecting their attitudes and approach to providing for their future.
The speculative era that existed in the early part of the century is being replaced by a much more grounded and engaged stance by consumers.
Consumers are more actively involved in the purchase decisions they make and the concept of value and what it means is rising in importance.
The term proconsumerism has been coined to describe this phenomenon.
These proconsumers are playing an increasingly active role in what, how and when they invest for their future.
Themes such as authenticity, customisation, transparency and ongoing involvement are becoming the norm.
As a result of these trends, the advocacy model that underpins our industry is evolving rapidly and having a profound impact on all elements of client engagement from adviser contact, marketing and information systems to customer service.
This is a challenge we, and many of our peers, are embracing. It provides opportunities to develop a more meaningful and productive relationship with clients.
That said, the pace and scale of change needed from industry players is not insignificant.
The recent regulatory changes have been a challenge, however we look forward to our continued relationship with the Insurance Authority and working with the licensed brokers in the UAE.
Over the past few years, there has been a shift in the regulatory landscape in the UAE, with the Insurance Authority taking a much harder line. What impact has this had on your business?
Increased regulation is not something new or unique to the UAE whether, for example, it is RDR in the UK, FAIR in Singapore or GN15 in Hong Kong, increased regulation is now commonplace.
It would be naive to say it is not having an impact on the industry in the UAE and the various segments contained within it.
The advisory sector is having to adapt its business model, increase solvency and invest in technology and education to retain market position.
From Generali’s perspective, the recent more proactive stance taken by the Insurance Authority has not caused us any issues.
In fact, in some ways it has increased the attractiveness of our firm and our products when considered against some other life company providers whose licenses are not as extensive.
Heightened regulation has become an integral part of financial services and we believe companies need to make regulation a core element of strategy.
Doing so requires a deep knowledge of the economic, social and strategic impact of regulation, an understanding of other stakeholders so that coalitions can be built to support a chosen regulatory strategy, and an organisational approach that firmly puts regulation on the agenda of senior management.
Financial advisory firms have come under increased pressure because of the stricter regulatory climate, with some commentators forecasting a significant fall in the number of firms operating in the country. What sort of impact would this have on Generali?
Generali doesn’t do business with everybody. We employ strict diligence procedures and insist on distributing through high-quality firms only.
Stronger regulation is welcomed as it provides us with the confidence to expand our distribution, knowing market participants are being held to high standards.
Does it concern you at all?
No. It is welcome.
You recently signed a bancassurance deal with The National Bank of Ras Al Khaimah, Rakbank. Why did you decide to partner with a bank?
I suppose it is stating the obvious that bancassurance is a vital element of any insurance company’s channel strategy.
Over the past decade, banks have been steadily increasing the number of mid to large-sized polices sold to a more upscale client base.
From a Generali perspective, its relevance takes on increased importance when one considers our focus on the affluent market segment.
Our products, services and brand provide an excellent platform for banks.
We felt we had not explored this sufficiently in UAE.
Why Rakbank specifically?
Our market scan prompted us to look for high-growth success stories that maintained a core focus on the customer. Rakbank is exactly in this space.
How will the deal work?
The deal will see our products distributed through the bank’s network of a number of branches and wealth managers.
What products will be available to Rakbank customers?
Initially, our regular savings product Vision UAE and our single premium unit-linked offering Choice, and we may look to develop future bespoke solutions in collaboration with the bank.
Generali is not the only insurance company to have signed a bancassurance deal in the UAE. Why are they popular in the region?
In simple terms, it comes down to the stage of market development in the region.
In stark contrast to banks in Europe, with mature bancassurancers owning between 50% and 90% share of the total life insurance sales, as a driving force it is still a relatively recent phenomenon in the UAE. Market penetration is still in single digits.
Against this backdrop, in recent years the GCC countries have sought to develop their insurance industry, introducing regulation that is facilitating its growth.
Market penetration projections are very positive due to several factors including a young population, high disposable incomes and the propensity to repatriate assets by various ethnic groups.
Should IFAs be threatened by life offices turning to banks as distribution partners?
There is always healthy competition between broker and bank channels.
However, the proposition is different and our desire is for clients to have the broadest possible choice.
Generally, what is the outlook like for the life industry in the UAE?
Very positive. Recent market data estimates the regional insurance sector will continue to expand at an annual compound growth rate of nearly 19%.
And overall insurance penetration to virtually double to 2%.
Considering the growth of the HNW population has increased by 16% since 2013, and combining that with a proactive stance taken by government bodies throughout the GCC, the outlook is a positive one.
What has Generali in the UAE got planned for 2015?
Continued growth and possibly the introduction of new and innovative products.
The presence in the region is a group one so the scope for development vis-à-vis products and markets is wide. Watch this space.
Are there plans for Generali to expand its presence in the Middle East outside of the UAE?
We are always looking to expand our presence in the region and always seeking good opportunities.
By the end of this year, is there something specifically you would like Generali to have achieved?
Yes. I would like to feel that we had demonstrated and lived our company’s values of being open, delivering on our promises, valuing our staff and being part of our local communities to provide an example to the industry.
