Three Islamic insurers in Dubai have embraced distributed ledger technology, becoming among the first in the region to demonstrate a use-case for blockchain transactions for insurance.
Aman Insurance (Dubai Islamic Insurance & Reinsurance), National Takaful Company (Watania) and Noor Takaful, alongside conventional insurers Al Wathba National Insurance and Oriental Insurance, have joined insurtech firm Addenda’s integrated blockchain platform.
“The new blockchain technology is a first for the region and will enable institutions in the MENA region to collaborate more efficiently, eliminate intermediaries and speed up claims. It also has the potential to solve legacy challenges and to become the blueprint for the digital insurance technology of the future,” explained Rajesh Sethi, CEO of Noor Takaful.
With Takaful players facing compressing margins and cut-throat competition, many have identified insurtech, particularly blockchain, as the key driver to usher traditional companies into a new era where global insurtech market revenue is expected to cross the US$1 billion threshold by 2023, having hit US$533 million last year.
Apart from Aman Insurance, Watania and Noor, Emarat Takaful is also exploring blockchain technology: the operator became the first Islamic insurer in the region to join the international B3i initiative to pilot a new blockchain platform for the insurance industry back in 2017.
The keenness displayed by Emirati firms to adopt blockchain or insurtech solutions perhaps is not surprising considering the proactive position of the Dubai International Financial Centre (DIFC) lobbying to be the region’s center for digital technology. Addenda is a prime representation of the DIFC’s ambition and efforts: the start-up was recently licensed by the center after it graduated from DIFC Fintech Hive’s second acceleration cohort in late 2018; the number of applications received from insurtech firms for the 2019 cohort has since grown to over 15% of total applications. The DIFC was also chosen by global firm Charles Taylor InsureTech as its launchpad into the wider GCC region; it is banking on Takaful to fuel its growth strategy in the Middle East.
“When DIFC set out to develop its comprehensive fintech ecosystem, of which insuretech is a key component, our mission was to establish a space where the world’s leading financial institutions could engage with innovative entrepreneurs developing cutting-edge technologies,” shared Peyman Al Awadhi, the head of marketing and corporate communications at DIFC Authority. “Addenda’s latest achievement is a true testament to how this has come to life, and we look forward to supporting them as they continue to disrupt the way the regional insurance sector operates.”