“The deadline for subscribing to the job loss insurance system ended in October 2023, yet 14% of employees remain unregistered,” the MoHRE informed the media.

By November 29, 2023, over 6.7 million employees subscribed to the unemployment insurance scheme.

The Involuntary Loss of Employment Insurance (ILOE) scheme, which came into force on January 2023, has been made mandatory for all employees across the Gulf country. Even free zone and federal government workers have been instructed to sign up for the scheme.

Individuals who fail to enrol in the insurance programme will have to pay a fine of AED400 (USD 108), while those who don’t make regular payments will get a fine of AED200. Non-compliant employees may also lose the chance to renew their employment permits.

“We urge workers to pay their due fines promptly in order to avoid administrative measures that will be taken against non-compliant individuals, including being denied new work permits,” the MoHRE stated further, while adding, “the fine amount will then be deducted from the employee’s salary or end-of-service benefits.”

The scheme aims to provide public and private sector employees in the Gulf nation with a three-month compensation amount after job losses.

While the deadline for enrolling in the scheme expired on September 30, private sector employees with work permits issued after October 1, 2023, must enrol with the scheme within four months, or face a Dirhams 400 fine.

The insurance has been made available through platforms like the ILOE website and its smart application, BOTIM application (which is a UAE-based ‘Voice over Internet Protocol’ solution run by Astra Tech), bank ATMs and kiosk machines, business service centres, money exchange companies du and Etisalat, SMS and other channels that the Ministry of Human Resources specifies with the insurance service provider.

Workers who are liable to pay fines for non-compliance can settle the fees through the MoHRE’s smart application, official website or authorised business service centres.

The UAE government has also emphasised that the responsibility for the insurance enrolment lies with the employee and does not entail any additional costs for the employer.

The scheme excludes investors (business owners who own and manage their ventures), domestic workers, temporary employees, minors under the age of 18, and retirees who receive pension and have joined a new employer.

The insurance scheme is divided into two categories. The first one covers those professionals who have a basic salary of AED16,000 or below, where the insurance premium is set at AED5 per month (AED60 annually), with the maximum monthly compensation being determined at AED10,000.

The second category includes those with a salary over AED16,000, and the insurance premium in this segment is AED10 per month (AED120 annually). The monthly compensation for this category is capped at AED20,000.

The compensation will be calculated at the rate of 60% of the average basic salary in the past six months before unemployment and will be paid for a maximum of three months for each claim from the date of unemployment, provided the employee in question was not terminated for disciplinary reasons or he/she has not voluntarily resigned.

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However, some insurance companies in the UAE have expressed concerns that the six months delay might be too short and a long period is required to successfully implement the IA’s decision. 

Last year, the IA had issued new regulations regarding life insurance and family takaful insurance. It was reported that both insurances will have a commission cap of 4.5 percent on the sale of offshore bonds or portfolio bonds. Nigel Green, founder and CEO of deVere group, told the media, “We support the UAE authorities’ commitment to the country’s vital financial services sector. Their proactive stance further protects clients and makes the industry itself more robust.”

The draft pointed out that the minimum commission paid for protection products is 10 percent of the annual premium multiplied by the number of years of the insurance certificate. This is subject to not more than 160 percent of the annual premium, media reports said. 

The new regulations are known as Circular 12. They provide more clarity on the terms and conditions in various aspects of life insurance policies. These aspects include  premium, amount of insurance, charges and expenses and an annual account statement for each policy. 

Now the delay in implementation will go on until at least October 16, 2020. Strict requirements in the future will change the country’s insurance industry. 

Some fear the impact of these changes on the industry, media reports said. 

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According to the report, UAE: Dubai 2019 by Oxford Business Group, the insurance sector in the Middle Eastern city, like other growing economies, is witnessing good growth, because of a variety of factors including a growing middle-class population. With regards to the use of technology in this sector driving insurtech innovation in the UAE, the report states it could have “a potentially disruptive trend that heralds both threats to and opportunities for incumbents and newcomers alike.” It further indicates a positive environment going forward for UAE insurtech startup firms primarily because of the growing internet usage on mobile phones in the region.

Aqeed is a break out UAE insurtech startup headquartered in Dubai that has been using Microsoft tech stack and other technologies in developing modern insurance software solutions, for the benefit of insurance agents, brokers, companies, and affinity partners. The UAE insurtech startup which was founded in 2016 by CEO Hadi Radhwan was launched officially only in May recently, after it secured $18 million in series A funding.

In an exclusive interview with International Finance, Radhwan tells us about how the company intends to use the recently raised funds to fuel its future expansion across the Middle East.

International Finance: How does Aqeed plan to use the $18 million it raised in May?

Hadi Radhwan: We would use the funds in growing our team. We do not have a fixed number but it will be in double digits, hopefully. It will also be used to expand our presence into other countries, improving our Aqeed Sales and Broker tools by adding more features, adding new products, innovating and improving our core technology, and onboarding more B2B customers.

International Finance:  How does Aqeed plan to use AI?

Hadi Radhwan: We think AI continues to be a big buzz word in the region. The UAE insurance industry remains one of the least digitalised among all industries due to a lot of inherent issues including inefficiencies in the way internal business processes have been built often duplicated, bureaucratised, and remain time-consuming. Many companies dub themselves as AI friendly, which might be true, based on which level of AI they are at. Most companies are still in level one of AI, which focuses primarily on automating redundant tasks, without any actual intelligence behind it, helping cut costs and increasing productivity, but not to the potential that AI has. However, insurance companies are run by people, and many people have plenty of reasons to resist the AI expansion; the fear of unemployment and the lack of trust in cognitive systems are the leading reasons. Before we go out and bring our AI tools to the market, we are working with UAE insurance players to educate and show how these tools are constructive and will add value. Once we have a cultural shift, we can easily improve our products and embed in them the necessary AI functionalities so that we can bring them to the mainstream market.

International Finance:  Which new geographies does Aqeed plan to enter in next one to two years?

Hadi Radhwan: We are expanding our technology products to help other insurance players in Kuwait, Qatar, Saudi Arabia, and Lebanon. Our goal is to help elevate the whole insurance industry by introducing a technology that can help these insurance players both brokers and insurance companies to become more efficient, so that they can focus more on their return on investment and in enhancing the customer experience. Today, insurance remains the least likeable industry with an Net Promoter Score (NPS) of less than 40. We believe this should change, and we want to be at the forefront.

International Finance:  How does Aqeed plan to disrupt the insurance vertical? Does it have any plans to diversify into other verticals over the next one to two years?

Hadi Radhwan: As an insurtech company from the UAE our focus would be primarily insurance. However, within insurance, there is a huge value chain from distribution all the way to reinsurance. At each juncture, there are a lot of tools we can deploy to help insurance players become more valuable. Aqeed has positioned itself as a platform-as-a-service company in the insurance industry. Our goal is to help insurance players become more digital and be able to focus on what matters most for them – sales. Today the industry in the region is dominated by insurance brokers that are completely offline. We want to change that by giving them access to our platform to help them compete in a digital world demanded primarily by their customer. Our disruption would come from the fact that anyone of these players will become digital without investing a single dime in technology.

International Finance:  What is Aqeed’s primary business model?

Hadi Radhwan: We are platform-as-a-service and we charge a monthly subscription fee based on usage. The beauty of this model is that we keep releasing new features and updates to the platform without charging our customers. Coming from a product background, we believe the customer is at the centre of the product, and we listen attentively to their ever-growing pain points, and we try to incorporate their needs into the platform constantly.

International Finance:  Does your UAE insurtech startup have any plans to introduce any new products this year?

Hadi Radhwan: We continue to improve the ecosystem of our platform by improving the various modules within it. Our goal this year is to focus more on onboarding various distribution partners who wish to sell insurance to their network or customers. Using our Aqeed platform, they can power their insurance offering without investing in any technology. We are aiming to be the preferred partner in the insurance industry.

International Finance:  How does Aqeed differentiate itself from peers such as Souqalmal.com and Yallacompare.com?

Hadi Radhwan: While other digital insurance players focus primarily on distribution, and target end consumers directly, by selling limited number of insurance products, we have taken a different approach, where our focus is to provide enabling technologies, like our platform, to any insurance player in the market to become digitally relevant without investing in technology, while offering any type of insurance products to the market. Today, the market continues to be dominated by offline players. However, if those offline insurance players do not act quickly, they will lose a lot of their power to other nimbler players. Furthermore, we have seen a lot of non-insurance players who have an ever-growing network of customers, who want to bundle insurance into their offering. We believe they can benefit tremendously from our platform to go to market much faster, cheaper, and better than doing it in-house.

International Finance:  What is your vision for Aqeed and UAE insurtech in terms of future digital innovation?

Hadi Radhwan: We are firm believers and adopters of technology to help the whole insurance industry. We are continuously developing our platform, as mentioned in past press releases, we started with Aqeed Sales and Aqeed Brokers, to help insurance players focus on what matters the most, focusing on bringing more sales to their companies and providing exceptional customer service. Our aim is to help them become pure digital companies in the future. While it is a long road ahead, it is a road that will be travelled, and we want to pave the way. Our technology is available across the Middle East and we are expanding globally next year.

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