Tell us how big the insurance market is in the UAE?
With premiums of US$30 billion and around US$2 billion of that in life insurance, it is huge considering the infrastructure you have in Dubai. A lot of premiums go to non-life sides such as property and motor. But what is happening now is this entire untapped potential life insurance market.
What drives the market?
There are two factors that drive the market – the penetration and number of players. It’s very competitive. In life insurance in Dubai, there are 60 companies doing life insurance. They serve a population of 10 million, a significant proportion of whom are under insured or not insured at all. Maybe 65 percent are not. You have a classic situation of a hyper competitive market of 60 players chasing 2 million people.
How big is the HDFC Group?
The HDFC group is India’s largest private financial conglomerate and is recognized as being the most respected financial institution in the country today. The HDFC network consists of banking, insurance (life and general), asset management, realty, real estate venture capital and education loans amongst others. The two most important listed companies of the HDFC Group (HDFC Limited and HDFC Bank) have a combined market capitalisation more than $ 100 Billion.
And HDFC Life?
The HDFC group is India’s largest private financial conglomerate and is recognized as being the most respected financial institution in the country today. The HDFC network consists of banking, insurance (life and general), asset management, realty, real estate venture capital and education loans amongst others. The two main listed companies of the HDFC Group (HDFC Limited and HDFC Bank) have a combined market capitalization more than $ 100 Billion.
How long have you been operating in Dubai?
We got our DIFC license in January 2016.
So what is your business model?
It is different. When I say 60 players, they are full-fledged insurers going out to the market selling insurance products. Once that product is sold, there is an element of risk. The investment part is taken care by the insurer themselves. But the life risk part is seeded out to somebody else – that’s us, a reinsurer. What I’m doing is building up this huge book of life risks which I manage, so the claim part of it which gets paid to the customer, a percentage is paid out by me. So how well I do depends on how well the life insurance market is penetrated. I’m not one of the 60, but I’m riding on them. In a sense, the world is my oyster. On life side there are 15 big life insurers – we are one of the most recent re insurers.
What does it take to succeed?
You need a lot of commitment, very deep pockets and someone big backing you.
Why did you locate in Dubai?
In 2000 the Indian market opened up, and many private companies were granted licenses, so we started building up the business. We realised in 2009 that we had around 6o000 NRIs on our books so about seven years ago we set up a representative office in Dubai. We started operating here just as a service office, and I was coming here a lot, but we realised that the brand name had massive resonance here. It was clearly a great market for us. Four years ago we felt there is a world outside India, so we set up here. Big insurers want to place their risk with big players not a fly by night operator.
How big is your operation here?
A lot of DIFC companies are quite small; some are just two man operations. What we bring to the table is capital, I have authorised capital of US$25 million, so I’m fully capitalised. It’s not a small operation. If I pull out US$25 million from India I am pulling out money earning 8% in India – so I am losing out. But it gives a sense to the market about how serious we are.
So why do it?
I need to make my presence felt, or nobody will take me seriously. We got our license in January 2016, and we are ten strong.
How big will you become? Will you hire more people?
Why can’t I become a massive organisation and work with a maxiumum of 20 people? That’s the kind of pressure I am putting on myself. Only if there is no way of automating tasks will I consider hiring more people. I want to become massive with 20 people. Simple as that.
What is massive?
I want to see several hundred million dollars of revenues.
Why aren’t more people buying insurance?
A lot of expats don’t have a long term view of being here, maybe 2 or 3 year perspective, so you will not take long term products. There is a lack of understanding of products, and I don’t think there are enough good products.
How do you see the market developing?
There are 60 players in the market but I think in next five years only serious players will stay. The good companies will come together in mergers for economies of scale.
How did you start out in the company?
I started as a management trainee in 1998, and I have been here ever since.
What made you take this role?
This was an opportunity to do something else, something big. I jumped at the chance. I want to create a massive company that disrupts the market with very few people.
What is your five year plan?
I want to grow this company. I see myself as the biggest disruptor in the insurance.
What advice would you give to anyone wanting to follow in your footsteps?
Be prepared to get your hands dirty and work your way up to the top. And remember there are no shortcuts. The moment you find you are in a comfortable space and start becoming indispensable, you are actually hindering your own growth. You actually need to make yourself dispensable, not indispensable. Then get out and move onto the next role. When I was starting out, I would figure out who is the best in the department I worked in. And then I would take it upon myself to beat them.
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