Beema builds on 'loveable' insurance model with new lines

Innovative provider of pay-per-kilometre motor coverage expands into home, travel and health products

Dubai's Burj Khalifa lit up on Beema Insurance's launch night. Image: supplied

When Beema Insurance announced its arrival two years ago by lighting up the Burj Khalifa it revealed a seemingly loftier ambition to “make insurance lovable”.

But the innovative UAE insurer appears to be fulfilling that mission, having signed thousands of drivers to its pioneering Pay-per-kilometre model.

In fact Beema - currently celebrating its second anniversary - acknowledges paying more cashback to its motoring customers than anticipated.

Surprisingly, perhaps, chief executive Nicola Garelli is pleased as it demonstrates drivers have embraced Beema’s common sense approach, to reward car owners who log less usage.

Beema is preparing to apply similar thinking at scale to insurance products for home, travel and health.

The insurtech start-up launched its wallet-rewarding motor insurance in September 2019 - and claimed 1.2 per cent UAE market share in the second year of operations.

Of 34,000 total Beema customers, 65 per cent this year were Pay-per-kilometre motorists.

Mr Garelli cites average cashback of Dh266 per person, totaling more than Dh490,000 paid out to date; 90 per cent of Pay-per-kilometre comprehensive customers were eligible for up to 25 per cent cashback on their 2020 policies.

Beema’s road to success hasn’t been without bumps, however, largely presented by the Covid-19 crisis.

Fortunately, in-house product development enabled the tech-first firm to adapt swiftly to market swings and shifting circumstances, such as motorists suddenly dropping commutes for home working.

“Normal insurance policies are not designed to take into consideration habits, which is what we’re introducing with our technology framework,” Mr Garelli explains.

“We are happy that people understood the product, and we hope an even larger share of the population will progressively understand it.”

Factoring in that cashback can deliver a much better policy price than the “majority of upfront competitors”. Certainly it has helped Beema enjoy healthy renewal rates - and an 83 per cent customer satisfaction score.

“They got a lot of money back … probably a bit more than anticipated,” confirms Mr Garelli, who reveals Beema’s model didn’t forecast scenarios where millions ceased driving for months, during pandemic movement restrictions.

“We had a super good start, then went into a lot of turmoil, but were very quick reacting.

“Our proposition, being digital, very convenient, was resonating well … we were able to tune it up to make sure it was resonating even better with people staying at home and driving less.

“Clearly, being a mobility insurer when people started not moving gives a few challenges, but the positive aspect was our product was configured to mitigate that.”

The CEO says Beema was “extremely happy” issuing cashback - in some cases Dh600 to Dh700 per customer - and foresees further generous rewards “because that will continue reinforcing our position in the market”.

While less driving reduces risk exposure, Beema has gone further by developing its behavioural model, another Middle East first trialled via selected customers, monitored on key driving traits.

“That basically means, we introduced a way of rewarding people if they drive well, based on real data,” Mr Garelli says.

“We build the driving score and use that to give an additional reward to people who are very safe drivers.

“If you are a good driver, we want to give back a portion of profit to make sure there is a more equitable and fairer distribution of premiums, depending on the actual risk profile.”

Beema plans to scale the behavioural model later this year and apply it to other insurance products, not least after the pandemic confirmed “a more balanced portfolio across complimentary products” as a route to resilience.

Amid the home working spike, increasing home ownership, and travel recovery, Beema accelerated product roll-out, introducing insurance for home and for travel in August. A health insurance proposition that rewards customers for maintaining healthier lifestyles will follow.

These too favour transparency over jargon, easy online sign-up and a ready-to-talk team, ensuring quality coverage and positive customer service; also now delivered by Beema’s mobile app.

Another landmark launch, in July, that has already been downloaded 1,000-plus times, unaided by advertising.

Another success was Beema’s 100 per cent remote working policy, which triumphed during peak pandemic restrictions, still delivering a technology-led model shaking up the region's insurance sector.

The company was one of the UAE’s first to promote innovation and advance the insurance industry in the broader GCC, by bringing “new methodologies and a new approach” to users.

Beema leverages data and technology to enable actionable insight to shape underwriting and pricing, plus agility … as the first two years demonstrated.

“2020 possibly gave a clearer boost to the transformation, adaptation, the acceptance and the search for change.

“If we didn’t pressure (ourselves) to make sure we were always better and trying to get with the trends before they were coming, we would not have been able to do what we did.”

Another challenge in year two was a ‘price war’ among providers, as premiums were slashed from August/September 2020.

Mr Garelli says as roads got busier and claim numbers and frequency increased, prices stabilised, and are rising.

“A few insurers in the country were discounting irrationally just to try to keep market share in a difficult market, not having product differentiation.

“The problem is, they brought prices down to a level where the entire insurance industry would suffer.”

Beema prevailed and has been recognised by industry experts, recently winning Best Insurtech Solution at the Leaders in Fintech Awards 2021. Mr Garelli, meanwhile, has been nominated Young Leader of the Year 2021 in the Middle East Insurance Industry Awards (results announced October 25).

Certainly, Beema is an insurance provider for our times, disrupting an often tradition-bound sector where cheap policies don’t necessarily buy great coverage.

Mr Garelli says policy benefits need to be “fully understood” by customers, so they are adequately protected, but “people are getting more aware”.

“Making insurance lovable is not easy, so we need to make sure we give people the right price, the right value, the right rewards, the right emotional engagement, the right incentives, and the right transparency, which then translates into convenience, into simplicity.

“You need to be able to follow users as they change over time, because habits change, vehicles change, so to mobility needs, travel needs, health needs.”

Mr Garelli readily admits that in insurance terms, two years is brief - but those 24 months delivered accelerated learning that prepared Beema for future years.

“The moment we reduce the pace, in terms of innovation, customer understanding, adaptation, we would have failed.

“We need to continue our relentless attention to customer needs first, and to product innovation, to continue leading in this space … to follow new trends, to be on the edge.

“Our ambition is to remain very agile, but also to offer something better to customers.”