‘Only 6% in UAE take out home insurance’



DUBAI // Only six per cent of UAE residents have home insurance cover compared to 76 per cent in the UK, according to a YouGov survey commissioned by an insurance company.

The survey found that 27 per cent of respondents said blazes like The Torch and the fire in 2012 at Tamweel Tower in Dubai had encouraged them to consider purchasing home contents cover.

“Over time, you accumulate thousands of dirhams worth of items – furniture, jewellery and the value of your content increases,” said Zahir Sharif, UAE manager of insurer Zurich, which commissioned the study.

“Not everyone understands the value of their contents. If they are insured, they will be paid back, depending on what their insurance is, for the value of their content.”

But the majority of residents do not follow up their concerns by taking out insurance.

The big difference between the UAE and the UK is people’s perception of insurance, Mr Sharif said.

“A lot of them feel Dubai is a safe place and they’re not here for long, or they buy furniture from Ikea, so they don’t think about how important insurance is, or the risk of theft is low. They think, why spend money on home insurance when they could spend it on something else when, in fact, insurance is as little as Dh1 a day and the cost in this market is relatively inexpensive,” he said.

Melanie Euverte, a 30-year-old French resident who lived on the 50th floor of The Torch had no insurance.

“Everything in the living room was burnt and there was water everywhere,” she said. “It was a pool when I walked in. It’s terrible.”

Although her employer has rented a hotel room for her for a month and bought her a new laptop, she has lost valuables.

“All my furniture is gone,” Ms Euverte said. “I had an amazing bookcase and there is nothing left. I only managed to save a few clothes which I have put in storage.”

She said she would contact her credit card insurance to find out whether or not she could be compensated on any of her most recently purchased items.

“I’ve taken pictures so let’s see,” she said. “In Dubai, it’s not like in France, we just don’t think about it. My sad example should serve as a lesson to everyone because it has really served as one for me.”

Almost half the survey’s respondents identified fire as the biggest threat to their homes, followed by electrical faults at 16 per cent, theft at 11 per cent and building faults and flooding at 10 per cent each.

“In Dubai, a lot of expatriates don’t have home contents insurance,” said Zoe Turner, an independent financial adviser for insurance company Global Eye. “In the UK, it’s pretty much unheard of. Almost everyone would have buildings and contents insurance put in place.”

She said the reason could be due to the transitory life most expatriates have in the UAE.

“They don’t tend to be here for long periods at a time so maybe they just don’t place value on possessions as much,” she said.

“People maybe don’t view it as their forever home but it’s something that needs to be highlighted a lot more in the UAE. Emotionally, fires already have an impact on you but at least insurance can release the financial burden.”

Ms Turner said insurance could cost as little as Dh1,000 a year for a villa.

“In apartment blocks, the risk of things like this happening is so much higher because you’re relying on other people to follow safety regulations,” she said. “People are going to be careless and I’m surprised this doesn’t happen more often.”

Mr Sharif said there tends to be a dramatic surge in home insurance after fires.

“The same is happening now but it’s a challenge because it’s not consistent,” he said. “It takes an incident for people to realise but there needs to be consistent understanding of what insurance is and what it does.”

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Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

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Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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The bio

Job: Coder, website designer and chief executive, Trinet solutions

School: Year 8 pupil at Elite English School in Abu Hail, Deira

Role Models: Mark Zuckerberg and Elon Musk

Dream City: San Francisco

Hometown: Dubai

City of birth: Thiruvilla, Kerala

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Company: Rent Your Wardrobe 

Date started: May 2021 

Founder: Mamta Arora 

Based: Dubai 

Sector: Clothes rental subscription 

Stage: Bootstrapped, self-funded 

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Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
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Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
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Number of employees: 4
Company Profile

Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million

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Favourite place in UAE: Al Rams pearling village

What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft

Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans

Best time to swim in the sea: When there is enough light to see beneath the surface

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