Italian insurance company Assicurazioni Generali pulled its contractual savings plans Vision and Choice from the UAE market, the company said on Wednesday.
The UAE Insurance Authority-licenced company confirmed to The National it has stopped taking any new business on its savings plans, Vision and Choice, "with immediate effect", which it distributes to investors via financial advisers in the country.
“We will not be accepting any new business applications for our current unit-linked saving products,” said Marco Vitiello, general manager of Generali’s Dubai branch. “There will be no impact at all to existing clients and contracts. They will continue to be serviced in the same manner as before.”
Earlier this year, the Insurance Authority issued a third draft of its proposed overhaul of the life insurance sector on its website, indicating it was pushing ahead with regulations to improve how savings, investment and life insurance policies are sold. The authority started the process in 2016, stating at the time it had received "an alarming number of complaints" from residents burnt by buying into long-term savings products that seemingly offered attractive returns, only to find early gains eaten up by commission fees, with an inability to exit plans without paying the full charges of the product.
Mr Vitiello said Generali’s decision to stop selling its Vision and Choice products in the Emirates was not linked to the new regulations.
“The decision to cease the current unit-linked policies is part of our business strategy review in UAE,” he said, adding the the company could not disclose its strategy. “Generali is not exiting the UAE market. We are here to stay.”
Generali’s decision to stop distributing its contractual savings plans in the UAE came less than a week after the company sold its entire shareholding in its unit, Generali Worldwide Insurance, to the Guernsey-based Utmost Group.
In a letter sent to independent financial advisers on March 3, the company said it would not accept any new business applications “with immediate effect”. However, any pending applications with documentation already signed will be accepted until March 21. The letter said the company’s service centre will remain active “to continue servicing existing clients”.
Sam Instone, director of fee-based financial advisory AES International, said it is "great to see insurance firms withdraw the more complex products and present an opportunity for investors to get better outcomes".
“It represents a significant shift in focus for the insurance market away from products that typically used to be popular," he said.
According to the recent Middle East Investment Panorama report by consultancy Insight Discovery, the number of advisers the financial services industry employs contracted between January 2018 and January 2019.
Nigel Sillitoe, chief executive of Insight Discovery, said the sector has shrunk dramatically with anecdotal evidence indicating a "fairly brutal culling in the number of people employed as financial advisers in the region".