National Bonds to offer insurance product in UAE

To complement your financial safety, and financial health of its ever growing 800,000 plus investors, National Bonds plan to offer Islamic Takaful insurance in six weeks' time.

National Bonds want to cash in on the under-penetrated insurance market and aims to sell this most essential product to its 800,000 strong clients spread among 200 nationalities in the UAE.

"To complement your safety, you need to take measures to protect yourself from uncertainty, for example, death of the breadwinner and diseases, and even loss of job. We address all these concerns and we are going to introduce and tie-up strategic partners for a bundle of takaful insurance benefits. We are planning to come out with a product in six weeks' time,” Mohammed Qasim Al Ali, CEO, National Bonds told Gulf News in an interview.

Al Ali said customers will be able to pick and choose from six insurance benefits that the customer wants to avail, including situations such as death, permanent and terminal disability, terminal illness, hospital cash benefits, Second Medical opinion, critical illness and involuntary job loss cover.

"We have managed to negotiate a very good deal for third party insurance companies,” he added.

Attract:

Over the past 9 years, National Bonds managed to attract 800,000 customers from 200 different nationalities and managing Dh5.8 billion of corpus.

"The fund has been growing very well, and the number of customers have been year on year. We now have about 8 per cent of the population, which is good indication, and still it is not as per our expectations. It is a comforting trend and people have started to pay attention to saving,” he said.

National Bonds priority lies in educating the public about saving habits. "From our side, priority is to educate the public, the importance of having a financial plan, a budget and importance of knowing your medium and long term goals. People don't pay attention to their essential needs like marriage, child's education, buying an apartment and obviously retirement. Short term priority is that you should have an emergency fund,” he said.

To plug this, National Bonds has introduced several products to make savings easy for government and private employees by deducting the money from the payroll, or at the bank level. National Bonds introduced yearly plans, and the fund gives more chances to win the draw.

"This is based on how much you have in the account and more the fund that you have in your account, the more profit that the person is entitled to, and also increases the chances of winning a prize. So the reward is a combination of two aspects, one is an annual profit, and the second one is prizes that you win,” he said.

"It is difficult to get people committed on a large scale to our direct debit plan. We have tied-up with the bill payment machine and clients can top up their account from 1,000 locations across the UAE and available at gas stations, cooperative societies and even malls,” he added.

The root cause for not saving is lack of awareness. The western countries have embedded financial planning from schools.

Individuals will have to distinguish what he needs and what he desires. The needs and consumer attitude along with lifestyles also play an important role in determining financial health.

"You shouldn't spend more than what you need, for example over dependence on credit cards. The message here is very simple, people will have to think long term and not short term, otherwise you'll be in financial shambles. One cannot be selfish as you have a family around you and also your country, before you spend your money,” he added.

Neutral

"Financial advisers have to be very neutral because they cannot promote products over products otherwise they'll loose their neutrality. They'll have to understand the local culture like for example the local culture for Asians is different from UAE nationals, which is also different from American expats,” Al Ali said.

"It will also wary from other segmentations from within that group. They cannot be detached from reality on the ground, and understand root causes of the problem, and tailor make plans according to their requirements,” he added.

There has been a growing trust deficit among investors and financial planners after the global financial crises in 2008, and that deficit is far from being plugged.
Source: Gulf News