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Mar 2024

UAE: 4 in 5 low-income migrants lack access to insurance

Source: Middle East Insurance Review | Jun 2018

Nearly 79% of low income migrant workers in the UAE do not have access to proper insurance cover and suffer from other social insecurities such as job loss and fear of not being able to provide for their families, among other concerns.
 
   These are the findings in a recent report covering 762 blue collar workers – 49% Indian and 51% Filipino respondents in the UAE earning less that AED4,000 ($1,089) per month.
 
   The study, entitled ‘Lifestyle and attitude of workers within the low-income group in the UAE’, was funded by the UN and conducted by Democrance, an insurance technology start-up.
 
   Nearly 35% of migrant workers listed job loss as their foremost fear, and with it the worry about not being able to support families back home. This was followed by concern about stagnant salaries (19%) and health issues (13%). In this context, 43% of migrant workers viewed life insurance as an important investment, yet 79% remained uninsured for reasons, including lack of knowledge, inaccessibility and pricing.
 
   “Microinsurance is a vital tool to help lift entire populations out of poverty. Yet, barriers to access often seem insurmountable for low-income migrant workers, many of whom are the sole breadwinners of their households and would greatly benefit from products that can address very real existential fears,” said Mr Michele Grosso, co-founder and CEO of Democrance. 
 
Insurance channels
Examining ways to break down these barriers, the second part of the study explored channels to make insurance more accessible, with a focus on two touchpoints that connect unbanked populations with commercial transactions – traditional remittance houses and mobile phones. 
 
   In this context, 71% of respondents said they would prefer receiving insurance information through mobile channels, and well over a half would purchase insurance on their mobile phones. Regarding remittance houses, respondents who send money home through these channels (78%) said they select providers based on pricing, accessibility and rewards, with insurance deemed an interesting incentive to use a particular remittance house brand.
 
   “Financial inclusion is not just about affordability, but also about having access to the lower-income market and understanding its needs. This is where a collaboration between insurers and remittance houses can achieve wider reach of the uninsured, while offering increased differentiating value for both industries, as well as cost savings through optimised distribution,” Mr Grosso added. M 
 
AED1 = $0.27
 
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