SMEs in the UAE slow to take up insurance
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SMEs in the UAE slow to take up insurance

There has been a recent increase in the number of individuals in the UAE that now have health insurance. Many businesses, on the other hand, are reportedly lacking in insurance coverage that could save them from emergencies in the future. UAE Medical Insurance looks at why Small to Medium Enterprises in the UAE are not obtaining insurance, why they should be, and how they can become insured. Read on to find out more.



Insurance: It’s something that people in some emirates are now required to possess for themselves and their families. New requirements for a minimum level for health insurance to be held by Emiratis and visitors alike in some places have lead to a recent boom in sales for individual health insurers in the UAE. On the other hand, it seems the Small to Medium Enterprises (SMEs) in the UAE haven’t been so good about making sure that they are protected from potentially catastrophic events that could cause them to lose massive amounts of money. Here, we delve into this topic and discuss SMEs best options for obtaining insurance.

 

The importance of SMEs being insured

An insurance brokerage in the UAE warns that the purchase of new insurance plans by UAE based small and medium-sized enterprises is “worryingly low.” Worrying because SMEs make up such an integral part of the country’s economy. In fact, SMEs in the UAE account for 94% of all businesses, 86% of the private workforce, and 60% of overall GDP.

The problem then arises when these companies are not protected from major events that could cause them to lose money to reimbursement or litigation, even in some cases where the problem is purely an accident and not at all the fault of the business. This could be a product malfunctioning, an employee damaging a 3rd party’s property, an employee being injured on the job, or any number of other serious issues that could arise.

So far the main factors explaining why the SMEs that do have insurance have obtained it are contractual obligations and mandatory coverage. This means that it’s primarily outside sources that are leading UAE companies to purchase insurance, and not internal motivation. This would suggest that the leadership in UAE SMEs do not see why obtaining insurance is of value to their business. Commenting on this, the Head of General Insurance for the insurance brokerage said, “What we have generally observed in the UAE and the region is that many SMEs unfortunately do not recognise the importance of insurance – the focus is on what is required as opposed to what is advisable. This can be attributed to many factors, but predominantly a lack of awareness and an insufficient understanding of the significant benefits of asset protection.”

 

Obtaining coverage

What can insurers do to ensure that SMEs realize what insurance can do for them? According to the brokerage mentioned previously, it’s all about raising awareness. The speaker went on to say, “Continuous education of SMEs on the benefits of insurance and its protective role is critical to reducing the number of uninsured businesses. Educating companies should be a community-wide effort.”

The other side of this coin is that insurers themselves should being doing what they can to make their products more attractive to businesses. The brokerage themselves - in connection with AIG - has advocated a strategy or combining various types of insurance policies into a single one to reduce costs. This assumes that a single insurer would be providing the entirety of a given company’s insurance needs. However, there is also a chance that the best option for a company premium-wise is a combination of insurance policies from a number of insurers. In this scenario it is likely a good idea to obtain your insurance through a broker like UAE Medical Insurance.

This is because an insurance broker already works with a number of insurance companies, and is in the best position to provide businesses with the most insurance plans options. It is also the most cost-efficient way to get your employee health insurance, liability insurance, property insurance, worker’s compensation coverage, business interruption insurance or other industry specific insurances. Of course, if a package exists from a single insurer is in fact your best option, your broker will be able to identify this and present it as an option as well. This is a decided advantage in utilizing an insurance broker when shopping for your business’s insurances.

If your business is one that is sorely lacking in insurance coverage, you will likely want to at least explore what kinds of coverages are available to you. While many companies are so focused on the short term, it must be realized that disaster can strike at just about any time, and once it does, there is no way to retroactively protect your company from the fallout. Only by acting now and planning ahead can comprehensive insurance coverage ensure that your business is free to operate no matter what kind of problems may rear their ugly head.

For more information on insurance for your business, talk to the knowledgeable insurance professionals at UAE Medical Insurance today. Not only can they provide you with plan comparisons between policies from major insurers in the UAE, they can also provide you with a free price quote.

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