In conversation with Intelligent SME, Michael Rafter, EVP Non-Life, Oman Insurance Company, shares his views on Insurance in the UAE and how important it is for everyone individual and the small and the medium businesses to be insured with the right policy.
Q: Firstly, how important is insurance for SMEs?
According to Dubai SME, in terms of number of establishments, the SMEs account for 95% of enterprises in Dubai, 42% of the work force and 40% of the emirate’s nominal GDP. Such numbers are a clear indicator of the importance of this sector and the implication of its success, or failure, to the economy.
Risk is an inherent part of business and while some may cause minor business interruption, others can cause irrevocable damage. It is important that SMEs know how to identify and evaluate the ones most critical to their business and take the necessary measures to prevent or control them. Insurance can step in as a risk transfer mechanism as it is an effective tool to help reduce the impact should any untoward incident occur. It can also assist the SME with business continuity, loss control or preventive measures and post-event recovery, adding immense value to the business operations.
Q: How can we make people aware of the details of their insurance cover and benefits, using it at the right time, the right policy and premium to be paid since many neglect the fine print?
SME insurance can be a complex matter and there is no single solution that fits all, but with clarity on the risk to be covered and the right guidance from insurance experts, it need not be a staggering task.
Additionally, it is important to know your insurer, do they have a wide range of product capabilities, a broad industry capacity and effective service delivery? This is where insurance broker and consultants play a crucial role as they are knowledgeable on market conditions and available covers and can guide the SME accordingly.
Q: Why is insurance mandatory for small and medium businesses? How does it help SMEs keep their business focus?
Risk is a very intrinsic part of any business. Identifying, evaluating and managing business exposures is an extremely critical aspect of any business, as failure to do so can often impact operations and subsequently profit and growth plans. Insurance allows the SME to transfer this risk to the insurer and thus retain its business focus.
While there is a mandate for basic healthcare insurance for all business employees as of 2014, only certain Free Zones require other mandatory insurance covers.
Q: What is ‘Business 360’ policy all about? How does it benefit SMEs?
SMEs in the UAE tend to underinsure their business risks, due to the complexity of multi contract insurance relationships, which are difficult to understand and to administer. Business 360 simplifies this necessary exercise, as it brings together all the key insurance covers into a simple solution. We’ve identified certain recurring risks that afflict SMEs and built standard covers to suit them. Additionally, Business 360 fulfills mandatory insurance requirements in certain UAE Free Zones, with the ability to issue Free Zone insurance certificates across various industries.
Q: What is a Multiline, Pre-underwritten Policy? Explain in detail about Group Medical, Motor Fleet, Property All Risk, and Liability?
To elaborate on a multiline, pre-underwritten policy, we take an example of an average SME with a ten million dirhams turnover and employee strength of 50. A Business 360 policy can provide such an organization with standard medical covers for their staff, protection of their registered company vehicles, cover against property damage and even industry specific liability covers – all with one single policy certificate.
Our Group Medical cover offers practical medical insurance solutions with enhanced benefits like dental and maternity, plus the advantage of access to our wide network of healthcare providers.
A Group Motor Fleet policy protects all the company registered vehicles against physical damage and loss and also includes third party bodily injury liability.
The Property All Risk cover is designed as a comprehensive property cover, to protect physical assets like the office premises and its equipment and other contents against damage from accidents, fire and certain natural calamities.
We also cover liabilities like Public Liabilities, Workmen’s Compensation and Employer’s Liability.
Q: Can we take the SME insurance process online?
For the insurance intermediary there already exists online platforms, like what Business 360 presently offers. This allows for an online quick and smooth direct quotation and binding facility.