What is the Takaful Emarat concept and business model?
The word takaful means “come together" or “be responsible for each other." Insurance is actually also the same concept. Back in the day, the origins of insurance were everyone coming together to put a little money in a pot to create a fund. In case anything unforeseen happened to someone in the community, everyone was there to support each other. Nowadays, customers do not understand the jargon and have stopped trusting the industry. Insurance companies collect money from their customers to pay claims later, their profit is based on the difference between the claims and the money they collect; that surplus is where they make their profit. With takaful, we are bringing people together to pay into a fund, and simply taking a 20% fee from that. From the remaining 80% we pay out claims for sickness, accidents, and so forth. However, unlike standard insurance companies, we give back whatever we have not used. It is simply ethical insurance, based on sharia principles. While you pay into the fund, you are not only helping the community, but you are also insured in terms of risk. In the end, you might get a portion back.
What are your expansion plans inside the UAE and regionally?
We have an ambitious goal. By 2020, we want to franchise what we have here into the Middle East, including both the GCC and Egypt. Entering new markets with insurance is always difficult because we have to have a license. We might partner with insurance companies in Kuwait and Saudi Arabia, for example, through co-branding. That is organic growth for us. However, what we have done recently is inorganic growth through acquisition. Our acquisition of Al Hilal Takaful has opened up the doors for us into segments other than life and health: general insurance. We are excited about the general insurance space, there is room to grow in a segment where we can insure anything.
To what extent is Takaful Emarat embracing new technology such as blockchain?
We have two methods we plan to use. One is to create a digital platform. We would like to become the Uber of insurance; a platform where we do not need anyone working in the areas we have launched. We would like it to be scalable so that we can link up with anyone working around the world. We want to make an easy-to-use product for our insurance. It could be something like an app that notifies a customer after buying something expensive like a TV with an insurance offer. Secondly, we would like to see technology that can help us do a risk-based analysis. If there are two people with Porsches of the same color and both drivers are the same age, but one is a poor driver, how will we know which to insure? We can either put a chip in the car or an app that can tell if someone is speeding or braking too hard or not using their turn signals. Based on positive driving behavior, premiums can be lower. Lower premiums translate into lesser claims. This digital platform can actually help us determine how much to charge, but it also helps drivers think carefully about how they want to drive. With our recent new brand launch of 'tlife' for our life and health business and 'tinsure' for our general insurance business (post completion of the acquisition of Al Hilal Takaful), we are now giving our customers and partners a fresh perspective. Amusingly, our employees now refer to me as “Mr.t"! What's more, this isn't just a cosmetic update, there has been a tremendous amount of work that has gone into digitalizing our offering including launch of new websites for our existing business and the acquisition of Al Hilal Takaful, introduction of a new enhanced health product that is sold and fulfilled digitally end-to-end, introduction of Tbo, our new intelligent chat bot available across all our websites, a vibrant online community aimed at improving lifestyles, health and wellness of our members and beyond. We are also working on native mobile applications that will further add to our omni-channel customer experience and the overall digital ecosystem.
Takaful Emarat aims to be the first takaful company in the world incorporating blockchain. What does this mean for the company?
The number-one issue in the insurance industry is that customers do not trust their insurers. They do not trust them to pay a claim and they feel like it will be a hassle to get the claim paid out. Insurance companies also do not trust their customers because they are always suspicious that there is fraud going on. We believe that blockchain will solve that. It creates authenticity and trust. Additionally, there will not be paper anymore. We will get into smart contracts that will not be transferable and they speak only to the specific client's needs and do not require signatures. We will not have to manually check records anymore. Everything is going to cost a lot less as well. That is why we want to be the first to roll it out.
How will the digital revolution impact the Takaful insurance business?
We believe it is the digital component. Agents will be obsolete, and chat bots and automated call center operations are going to become the new norm. We make it an attractive product and pull people in without using agents. That is really where the difference is. We need to sell with a combination of IT, big data, analytics, blockchain, and artificial intelligence. We are in an age where we are about to see huge changes in the industry. With the appointment of Fadi Hindi as Takaful Emarat's new CEO this year, we have set the stage for something special that will completely change the way people and businesses look at insurance. Fadi brings in an ocean of knowledge and expertise from his successful appointments at DEWA, Smart Dubai and NBAD to name a few. We also recently hired a Chief Digital Officer, a full Marketing department and an IT team. We honestly believe we need data and IT specialists for the future, not financial experts. The final piece is R&D. We need someone who is always on top of what is coming next and can help us improve the next version of our company. I always push people to think about innovation. I think innovation is what has never been done before, what I will invest in, and where I will be the first. If I do not have these three things aligned, it will not be me; somebody else will do it if I do not. We want to innovate and change the mindset. There is the saying, “Uber yourself before you get Kodaked."