TBY talks to Mustafa Vazayil, Managing Director of Gargash, on compulsory health insurance, temporary workers, and trends in the industry.

How did Gargash fare over the last year?

2016 and 2017 were great years for Gargash, particularly in relation to new business and client acquisitions. The market was also beneficial as a result of the introduction of compulsory employee benefits medical insurance by the government. When we look at the underlying strength of our portfolio at in 2016, it was robust. We are dynamic and base our growth on various changing scenarios, while preparing our general capabilities to respond to and be proactive to emerging situations.

A recent study found that Indian expatriates often do not have full insurance coverage because of the temporary nature of their stay in Dubai. How does Gargash cater to Indian expatriates?

The reason why the insurance penetration levels are lower for Asian expatriates compared to the other expatriate communities is that insurance awareness is low in developing countries like India. On the other hand the European community is extremely insurance and risk aware while Asian communities have a more skeptical approach. However, there is growing awareness because of the mandatory health insurance and exposure to other risks, which results in new sectors of the population getting informed and involved with the insurance business. For many Indians in Dubai this is the first time they realize the advantages of the broad offerings of insurance companies. The life and protection insurance segment so far has especially low penetration levels because of the alleged transient nature of the expatriate population. However, over half of the expatriates here have been in Dubai for over 10 years. Most prefer to buy into pension schemes or similar products from their home country. The social security element in India is also rudimentary, unlike in Europe, where the government provides state pensions and public healthcare. In our experience the Indian attitude is still traditional; their children will look after them in their old age. However, with the globally increasing cost of healthcare and rising life expectancy, there is increasing awareness of the need for medical insurance in the Indian community, as well as need for pensions and savings.

How do you reach out to the corporate community in Dubai?

Since we cater to every business sector from construction to healthcare, hospitality, trading and manufacturing, it is clear that Gargash has to be able to adapt to the dynamics of the evolving economy in Dubai. Gargash's corporate business is increasing at a faster rate than our individual client base. Today, our corporate clients make up about 65% of our business. When we started, it was the other way around. Our exposure has increased significantly in recent years, giving us an edge in acquiring new corporate customers.

How is competition between international and local insurance intermediaries in the Dubai market is likely to develop?

There is always a place for both international and local competitors in a market like Dubai. The presence of international insurance intermediaries is required here because they handle global accounts and insurance programs. Companies like Gargash with our global networks are in a strong position to compete with them. In the end, the customer will decide who best caters to their needs on the basis of the quality of service we provide. We need to have the best expertise on the ground as a local company, while international players can fall back on their global expertise, though that comes with a delay factor. Our edge from a client point of view when we compete with these international companies is our expertise, network, and service. We are present in Dubai with a large organization and a well-established brand. Gargash is the only broker in Dubai accredited by the Chartered Insurance Institute in London as Chartered Insurance Brokers. This means we have in place a whole raft of systems, along with international compliance standards and annual audits for the benefit of our clients. We have maintained these standards for the last 11 years. This is the gold brand we carry and it makes a difference. Our bench strength of qualified people on the ground is much bigger than that of our international competitors. They have far greater resources globally, but on the ground, ours are stronger.

Does Gargash have any regional expansion plans?

We would like to be a regional player, though regional expansion is not something a company does on its own; rather, it needs great partners. It needs to know the markets it is entering. We are exploring the possibilities for this through joint ventures or other collaborations. Our potential partners need to be business community leaders on the ground in those markets that are interested in diversifying using our expertise and capabilities.

What trends and challenges do you see coming in the insurance industry in general?

From an industry point of view, I see consolidation. There are more than enough actors in the market and they find it difficult to achieve scale, whether on the individual or company side. It is inevitable for basic business reasons that the industry consolidates. I do not see many mergers and acquisitions happening; however, market forces may persuade some actors to do this. From a UAE point of view, there are huge opportunities because there are only two Emirates without mandatory health insurance now. Perhaps 2018 will see those remaining Emirates bringing in mandatory health cover. That is another growth opportunity for the market. Looking at Dubai 2020 and beyond, with the continuing growth in tourism, I am positive about the outlook for the medium to long term. In terms of the challenges that the insurance industry will face, one will be increasing profitability margins. Developing a technology platform will become inevitable for achieving profitability in the future. Plus, marketing through different channels will be important, such as through social media or online. B2B insurance services may still require face-to-face interaction, though personal lines of insurance will go through aggregators, online portals, or social media in the future. Currently only 10% of personal insurance business is transacted through these platforms, this figure will easily increase to 30% in the next three to four years. Digitalization will have a major impact on the insurance business. This is where the bigger players will have a competitive advantage in the marketplace and market forces will create some consolidation. Gargash's plan is to grow. If a company does not grow, it becomes static and complacent, and that is a downward slope. We will grow our business without compromising on our profit margins. We will have healthy growth with the right margins.