The insurance market for small and medium enterprises (SME) in Dubai is likely to see significant growth in the first two quarters of 2020 owing to the positive sentiment around Expo 2020 and increased economic activity, a senior insurance executive said.
Shrinking profits of SMEs have curtailed the spending power of such businesses in the past 12 to 24 months resulting in slow growth for SME insurance market, said Carol Lee, Head of Direct Sales for Retail and SME at AXA Gulf.
Speaking to Zawya on the sidelines of Smart SME MENA conference in Dubai last Wednesday, Lee said the growth opportunities in the SME insurance market is a result of strong initiatives by both Dubai and Abu Dhabi Governments.
“I am confident that by end of 2019, the increase in our UAE business will be very positive and this will further accelerate in Q1 and Q2 of next year,” she said.
She added that her firm has seen its SME insurance business growing in Oman and Bahrain too this year.
AXA Gulf has created a dedicated division to address specific needs of an SME to insure its business, she said. While AXA Gulf’s SME insurance does not cover bankruptcy protection it offers consultancy and an array of bundled products suited for the small and medium-sized businesses.As financial institutions are ramping up support for SMEs in the UAE resulting in expansion of businesses and an increase in revenues, the SME insurance market, especially in Free Zones where a majority of them are registered, will see a big boost, according to the AXA Gulf executive.
While every SME would have its own unique insurance requirements, the free zone authorities, the UAE regulators and financial institutions have identified essential SME insurance cover for public liability, workmen’s compensation and employer’s liability.
Lee said as SMEs could grow from basic coverage for two or three employees to up to 250 employees, AXA Gulf has created insurance products for every stage of their growth--from immature and fragile SMEs to mature and stable ones.
Referring to the risk premiums, Lee said SME insurance products are very simple and pre-underwritten, and premiums generally depend on the type of SMEs and the sector they operate in.
“As the SME insurance services are bundled in simple products and risks are pretty straightforward, we are prioritizing to digitalize our SME services in the next few months like we have done in case of auto insurance. We are working with Fintech Hive to digitalize our SME services,” she added.
(Reporting by Atique Naqvi; Editing by Brinda Darasha)
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© ZAWYA 2019