By Daniel Stanton
Middle East banks need a change in culture and legislation to tap into insurance market.
Insurance products could be a major source of revenue for banks in the Middle East, but only if there are changes to legislation and internal culture, industry experts said yesterday.
Bancassurance, the process by which banks sell insurance products to their customers, is still in the early stages of development in many Middle East countries, in some cases due to insufficient legislation.
Shirish Nadkarni, chief executive, Marco Inc. Management Consultants, said: "Bancassurance has the potential to bring in 50% of a bank's fee-based income."
He added: "The major stumbling block to the growth of Bancassurance in the UAE is the legal side."
Banks also need to be more proactive in selling insurance products, said Manoj Kumar, head of Bancassurance and wealth, Doha Bank.
Whereas most Middle East banks tended to bundle products together with certain accounts, or to wait for customers to enquire about them, banks would benefit from targeting potential customers with suitable schemes. This would require banks to train their staff in direct selling and commit resources to the division.
Kumar said: "The whole culture needs to be changed. It's a must."
Other speakers said that the region's insurance industry was being hampered by the lack of tax incentives for employers who offered insurance for their staff, and a perceived lack of development in the regulation of the industry.
Nadkarni and Kumar were speaking at Insurex 2007, an independent insurance conference held in Dubai.