Low-income migrant workers in the UAE with an average salary of Dh4,000 view life insurance as a most vital type of social protection, and yet the majority of them lack access to this type of coverage, revealed a new report.
The study, funded by the United Nations (UN) and commissioned by Democrance, an insurance technology (InsurTech) startup, revealed that job loss, and with it the worry about being unable to support families back home, was the most frequently cited concern among the study participants, with 35 per cent identifying it as their number one worry, followed by stagnant salaries (19 per cent) and health issues (13 per cent).
In this context, 43 per cent of migrant workers viewed life insurance as an important investment, yet 79 per cent 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 Michele Grosso, Co-founder and CEO at Democrance.
The survey was based on focus groups and survey responses from 762 workers in the UAE -- Indian (49 per cent) and Filipino (51 per cent) nationals -- who earn a monthly income of up to Dh4,000 and remit money at least once every two months.
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.
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In this context, 71 per cent of respondents said they 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 per cent) reported 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 optimized distribution," Grosso added.
By Waheed Abbas
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