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How can insurtech expand insurance inclusion in the Middle East?

Insurance in the region will likely become more inclusive, offer personalized options, and provide better digital experiences for all.

How can insurtech expand insurance inclusion in the Middle East?
[Source photo: Krishna Prasad/Fast Company Middle East]

Low insurance penetration and limited awareness have traditionally kept many in the Middle East from securing their futures. But times are changing.

A new generation is emerging. One that is young, tech-savvy, and increasingly connected. And this demographic wants to prioritize its future differently than previous generations. The technological revolution that has transformed other industries has finally caught up with insurance, ushering in a new era: insurtech.

With the help of innovative digital platforms, advanced data analytics, and easy accessibility, insurtech aims to revolutionize our approach to financial well-being by democratizing access to security.

How will this shift impact the future of insurance in the Middle East?


Insurance penetration in the Middle East remains very low, according to Lara Varjabedian, Co-founder at UBQT. Apart from compulsory covers mandated by regulators, non-compulsory lines of insurance remain largely untapped. Insurtech can enhance access to insurance through digitalization, alternative distribution channels, and increased awareness, which needs improvement in the region.

Varjabedian emphasizes the opportunity presented by the region’s young demographic. “We need to speak their language,” she says, contrasting the European approach where insurers focus on older populations. The Middle East’s Gen Z and millennial population offers a prime target audience – young, healthy individuals with a long life expectancy, ideal from an insurance perspective.

Kalpesh Desai, President & CEO at Agile Financial Technologies, confirms the vast protection gap, with insurance penetration hovering between 0.7% and 4%. However, the current insurtech landscape, dominated by aggregators and digital channels offered by traditional players, focuses primarily on price comparison. While this puts pressure on insurers to refine offerings, Desai argues that it doesn’t represent true disruption. These channels cater to an existing market, offering the same products through a digital lens.

Disruption lies in increasing insurance penetration, achieved through innovative products like usage-based or pay-per-use models. These bite-sized, on-demand solutions rely on AI-powered predictive models, enabling insurers to collaborate with actuaries and reinsurers for effective risk distribution.

Digital technology empowers clients to manage their coverage dynamically. Imagine lowering your car insurance premium by pausing coverage when your car sits unused during a vacation. This tailored approach enhances affordability and accessibility, making insurance more relevant and appealing to consumers.

The Internet of Things (IoT) further fuels innovation. Per-mile auto insurance policies, dynamic pricing based on driving behavior, predictive claim management in agriculture, and health insurance rewards for healthy habits are just a few examples. However, regional insurers struggle to adopt these advancements, hindered by outdated core systems ill-equipped to handle such emerging models.

According to Johnny Kollin, Managing Director of Várri Consultancy, the insurance underwriting process in the Middle East still heavily relies on paper forms and unstructured digital documents.

For instance, business clients seeking quotes for employee health insurance or third-party liability insurance are often required to fill out Word documents and Excel spreadsheets for KYC and underwriting purposes. These forms must then be printed, signed, scanned, and emailed to their insurance broker, who subsequently contacts insurers. Similarly, the claims process can be cumbersome for consumers when clinics are outside the direct billing network and for healthcare providers seeking reimbursement from insurers.

While paper-based processes may remain profitable for insurers and distribution partners in some insurance segments, they are not sustainable in others. For example, underserved micro-insurance segments require more digitalization to be profitable. By introducing digital solutions, insurtech firms have enabled insurers and insurance brokers to penetrate new market segments efficiently, he adds.

Miro Fok, Founder and CEO at Vita Virtues, underscores insurtech’s most immediate benefit: enabling digital transformation within the insurance industry. Many companies still need to rely on traditional, paper-based processes, which lead to inefficiency and high costs. Insurtech offers a path to streamline operations and improve outcomes.


Traditional insurers in the Middle East are seeing success through collaboration with insurtech startups. Abdullah Alzakry, CEO at Eltizam, points to a significant rise in sales for insurers partnering with insurtech firms. This trend is supported by the IA 2023 report, highlighting an 83% increase in insurtech sales, contributing $2 billion to the total digital insurance sales of $2.67 billion.

Aman Pal Singh, Founder & CEO at B4E Insurtech Inc., echoes Alzakry’s sentiment. He emphasizes that traditional insurers are recognizing the transformative power of insurtech. By embracing digital transformation, insurers can enhance customer experiences, streamline processes, and maintain a competitive edge in a dynamic market.

Kollin also adds that insurance companies are increasingly running their own internal digitalization programs and partnering with innovative startups to accelerate these initiatives or replace their in-house systems with third-party solutions. As of March 2023, according to the Swiss Re Institute, 31 of the world’s 50 largest re/insurers—many of which are present in the Middle East—had invested in insurtech companies.

However, challenges remain. Frederik Bisbjerg, Deputy CEO at eData Information, highlights the stark contrast between traditional insurers and insurtech startups. Legacy systems and bureaucratic processes within established companies clash with the agile, technology-driven approach of insurtech firms. This cultural and operational gap can create tension and hinder the integration of insurtech innovation into the mainstream market.

Bisbjerg suggests that traditional insurers need to become more flexible to stay relevant. Revamping operational processes and actively engaging with insurtech are crucial steps in this direction. Collaboration between these seemingly disparate entities is key to unlocking further growth and success within the Middle Eastern insurance landscape.


The distribution of insurance is evolving. Coverage is embedded into everyday interactions, from buying a car to booking travel or renting a vehicle. Health insurance claims have already been digitized, improving efficiency. However, according to Benito Mable, Venture Lead at Standard Chartered Ventures, this is the first step in a larger transformation.

Insurtech can’t drive this change alone; collaboration with insurers and reinsurers is essential. The focus should shift towards enhancing the claims experience, simplifying product descriptions, and making certificates of insurance more user-friendly. This will ensure the average consumer clearly understands their coverage.

Alzakry adds, “Some of the inefficiencies are related to insurers’ weak digital presence for their products and services.”

Insurtech is revolutionizing the insurance landscape. It offers a trifecta of benefits: customized coverage options that cater to individual needs, user-friendly digital platforms for comparison shopping, and streamlined claim submission solutions that expedite payouts. AI is another key player, enabling insurtech to create even more tailored insurance plans.

Desai sees insurtech startups as the key to streamlining the industry. They achieve this through digital onboarding, AI-powered claims processing, and the secure transparency of blockchain technology. Big data empowers them to craft personalized products, while dynamic pricing models and enhanced digital experiences make physical branches less necessary. Embedded insurance, micro-insurance, and usage-based models cater to a broader range of customer needs. Finally, AI-driven customer service fosters stronger engagement, and advanced analytics improve risk assessment and underwriting, leading to accurate pricing and better risk management.


According to Bisbjerg, the Middle Eastern insurtech landscape is undergoing a metamorphosis driven by the gradual integration of emerging technologies like AI, blockchain, and IoT.

While AI and IoT offer immediate benefits in streamlining operations and boosting customer engagement, widespread adoption of blockchain hinges on long-term industry collaboration. Insurers who can effectively harness these technologies are poised to gain a significant edge in efficiency, cost management, and customer satisfaction.

Digitalization also enables more efficient risk management, which is fundamental to the insurance sector, says Kollin. For example, AI combined with structured data can enhance underwriting, claims management, and customer service processes. Wearable technology and the IoT can be used to price risk more accurately and assist customers with risk mitigation by regularly sharing health data with insurers instead of only once a year during policy renewal. But, insurers and insurtech companies must be mindful of how such technologies affect their risk profiles.

However, Miro Fok cautions against overemphasizing trendy solutions like AI and blockchain. He argues that the industry should prioritize improving internal system connectivity – a crucial foundation for the future integration of these advanced technologies. The insurance sector’s inherent cautiousness translates to a slow adoption rate, but once a solution gains traction, full-scale embrace typically follows.


Varjabedian believes that insurtech startups are not the enemies of traditional insurers; they are the best friends that insurers can have.

His proposal hinges on regulators in the Middle East supporting MGA licensing for insurtech startups, regardless of their business model (supporting insurers digitally or operating independently). Both models rely on insurers assuming risk, and MGA licenses would incentivize insurers to actively participate in industry disruption. Just as fintech revolutionized finance, it’s time for insurers, regulators, and insurtech startups to join forces and foster an environment that nurtures insurance innovation.

Mable reinforces this notion, suggesting that regulatory changes can propel innovation by encouraging experimentation within the industry. Minimum capital requirements or risk-based pricing could allow insurers to take calculated risks.

Desai envisions a scenario where regulators streamline the entry process for insurtech companies, attracting more players and startups. However, he acknowledges the need for a balanced approach. New entrants would face necessary compliance burdens, requiring investment in robust processes, governance, capital adequacy, and professional management.

Since insurtech deals with vast amounts of data, compliance costs must be considered to safeguard consumer and customer data. Striking a balance between fostering innovation and expansion while ensuring clear and non-restrictive regulations is crucial. Data protection laws and security regulations implemented during this time will build trust among policyholders and encourage wider adoption of insurtech solutions.


“Insurtech must collaborate with insurers,” adds Fok, “as now is the time for innovation. Technology has proven to be the only way for insurance companies to improve efficiency and profitability. Failure to recognize these needs will eventually lead to a tipping point, forcing companies to take extreme measures to improve their bottom lines, or worse, face potential collapse.”

“Collaboration with traditional insurers is not just beneficial for insurtech companies—it’s essential for survival and growth,” points out Bisbjerg.

“These partnerships allow insurtech to navigate the industry’s complex regulatory and operational landscape while enabling traditional insurers to innovate and modernize their offerings. Effective collaboration involves adjusting legacy systems and operational practices to accommodate new technologies and innovative business models brought by insurtech. Such synergies are crucial for the evolution of the insurance sector, as they blend the strengths of traditional practices with new technological advancements.”


According to Varjabedian, VC support is crucial for insurtech startups. However, this creates a classic chicken-and-egg scenario: regulations need to be simplified to attract VCs, but without insurers’ full adoption of insurtech solutions, funding and revenue for startups will dry up, threatening their survival.

Alzakry highlights the shift towards comparison websites, which reduce the need for customers to visit multiple insurers’ sites. Insurtech firms leverage embedded insurance within apps to reach clients conveniently. Startups target younger, tech-savvy demographics through social media with personalized messaging, starkly contrasting insurers’ traditional, corporate tone.

Singh emphasizes the importance of understanding local intricacies for insurtech startups to flourish in the Middle East. Cultural alignment, strong partnerships, and offerings tailored to the region’s unique needs are all key to achieving sustainable growth and positive impact.

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Karrishma Modhy is the Managing Editor at Fast Company Middle East. She enjoys all things tech and business and is fascinated with space travel. In her spare time, she's hooked to 90s retro music and enjoys video games. Previously, she was the Managing Editor at Mashable Middle East & India. More

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