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Low-income migrant workers in the UAE 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 report funded by the United Nations (UN) and commissioned by Democrance, an insurance technology (InsurTech) startup that aims to make insurance accessible and affordable to all.
The study, entitled 'Lifestyle and Attitude of Workers within the Low-Income Group in the UAE', explored key concerns, remittance habits and attitudes to insurance among low-income migrant workers in the country in a bid to develop optimal solutions tailored to the needs of this population segment. Findings were based on focus groups and survey responses from 762 workers in the UAE – Indian (49 percent) and Filipino (51 percent) nationals – who earn a monthly income of up to AED4,000 and remit money at least once every two months.
Job loss, and with it the worry about being able to support families back home, was the most frequently cited concern among the study participants, with 35 percent identifying it as their number one worry, followed by stagnant salaries (19 percent) and health issues (13 percent). In this context, 43 percent of migrant workers viewed life insurance as an important investment, yet 79 percent remained uninsured for reasons including lack of knowledge, inaccessibility and pricing.
Michele Grosso, Co-founder and Chief Executive Officer at Democrance, said: "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."
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.
In this context, 71 percent 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 percent) reported they select providers based on pricing, accessibility and rewards, with insurance deemed an interesting incentive to use a particular remittance house brand.
Grosso added: "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."
Findings from the study will be incorporated into an ongoing microinsurance project led by Democrance that is part of a collaboration with the International Fund for Agricultural Development (IFAD), a specialized agency of the UN, and Luxembourg-based inclusive finance non-government organization ADA. The project aims to build synergies between remittance houses and insurers to make insurance accessible and affordable to those who need it most but can afford it least.
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