Gulf Insurtech

Democrance’s Expansion Driving Insurtech Growth in the Gulf

The dynamic convergence of insurance and technology, often referred to as Insurtech — is reshaping the design, distribution, and consumption of insurance products worldwide. In the Gulf region, where digital transformation is rapidly accelerating, Insurtech emerges as a key industry disruptor, enabling better personalization and easier access to insurance services and products.

Democrance, a company that specializes in Insurtech innovation, serves as a prime example for this wave of transformation. Boasting a successful track record in Dubai, and armed with the necessary investment from Wa’ed Ventures to branch out into the Saudi market, the company is poised to benefit from all the possibilities of a successful expansion into the Gulf’s Insurtech landscape.

As the Kingdom moves forward with its Vision 2030 agenda, which focuses heavily on digital innovation, the opportunities within the Insurtech sector are growing by the day. The Central Bank of Saudi Arabia (SAMA) has been instrumental in this development, approving comprehensive Insurtech regulations, setting the stage for regulated activities within the domain. As such, there is no better time than now to break into this lucrative market, where new Insurtech regulations are sure to boost the sector’s growth. 

Michele Grosso, CEO and co-founder of Democrance, affirms that AstroLabs’ role in their success has been critical. “I started Democrance in 2015, and that is where I met my 2 co-founders. AstroLabs was really the birthplace of Democrance — we were one of the first startups at AstroLabs. So when we were launching in Saudi Arabia, they were obviously our first choice because, on the one hand, it makes us relive that journey of when we started, and on the other, with you [AstroLabs], it would have been a smooth process, as you have the local know-how and we knew there wouldn’t be any surprises. Also, the sense of community that I still remember from Dubai; we wanted to have the same sense of belonging in Riyadh. ”

Democrance’s path to success highlights the importance of disruptive innovation, knowledgeable local guidance, and great timing, in achieving unprecedented milestones in the scope of Insurtech. As the only B2B Insurtech company to have received SAMA approval, Democrance has cemented its status in Saudi Arabia as an accomplished expansion champion. 

Digital Transformation as a Driver of Growth

The sector is constantly reshaping itself to enhance efficiency and streamline the processes of the insurance industry. As a result, the creation, distribution, and management of insurance and Insurtech services have become incredibly seamless, with companies shifting towards hyper-automation to meet their clients’ needs while maintaining their competitive pricing.

The global Insurtech market is on track to reach $39.44 billion by 2027, with a CAGR of 30.7%. MENA’s market is growing at a 3.2% rate annually, and is projected to reach $31.1 billion in 2026.

The sector’s bright market outlook thrives on new technologies like automation, AI, and digitized claims. Emerging trends, like real-time motor claims platforms, are reshaping the market significantly. Insurtech leaders like GIG Gulf leverage these changes to introduce innovative products. Their offerings feature customer-centric claims tracking using integrated technologies, simulated digital twins for predictive health interventions, and IoT integration for broader insurance coverage.

Michele believes these innovations present both a challenge and an opportunity for the Insurtech market. He elaborates on the possibilities, “The Gulf markets are quite unique; they are young and digitally connected. What this means for our audience is that they are used to very personalized experiences, as seen in e-commerce. While this provides a challenge, it also provides an opportunity, and this is what Insurtech companies use Democrance for. In Saudi, we partnered with Tawuniya, and they launched “Tree” — a digital tracker — a fully digital insurance company completely operating through Democrance, which caters to the young uninsured population since traditional insurance companies do not meet their expectations.”

According to Grosso, Saudi Arabia presented an exciting and much-needed challenge for Democrance. “If you look at Saudi Vision 2030 insurance objectives under the Financial Sector Development Program — it’s all about insurance penetration, but at the moment, insurance is manual, offline, and paper-based. We work with some of the best companies like Tawuniya to digitize this process — Saudi is the fastest-growing market for us, and it is quickly becoming our no.1 market.”

The Insurtech industry in the Middle East is gaining traction, as evidenced by the renewed interest taken by investors and financial enablers. In fact, the MENA region saw $417M in funding across 21 deals in 2022, unlocking a whole new set of opportunities for homegrown Insurtech startups to expand their reach across the region.

Reshaping the Gulf Insurtech Landscape

Founded with the intent of making insurance available and accessible to all, Democrance has contributed to igniting an Insurtech revolution in Dubai. In just six years, Democrance was able to expand to 12 countries across the Middle East, Africa, South-East Asia, and Latin America. The next step in their bold expansion strategy is revamping the insurance industry in the Kingdom.

Reflecting on their journey in the MENA region, Michele Grosso recalls, “Insurtech in the Gulf has evolved a lot since we started in Dubai in 2015 in AstroLabs. We were the first Insurtech company in the region, I would say, and 8 years later, we have worked with 20 insurance companies in 16 markets.”

With reputable clients believing in the company’s mission, and the company aligning its goals with those of Saudi Arabia’s Monetary Authority (SAMA) and Vision 2030’s broad objectives, it is certain that Democrance’s operations will majorly impact the Saudi insurance market and noticeably increase its efficiency.

Designed to digitize the sales and distribution aspects of the insurance value chain and offer insurance to underserved markets, Democrance became a vital contributor to the Financial Sector Development Program (FSDP), and an invaluable partner in realizing many of the Vision 2030 initiatives.

During this period, insurance companies have sought better solutions to cater to digitally connected and digital-first customers, as well as low-middle income groups lacking access to insurance services. These companies were able to circumvent the issue by digitizing their core processes, which Grosso believes to be a major driver of the industry’s growth. “Fast-forward, you see a lot of specialized Insurtech B2B companies, which is the by-product of the evolution of Insurtech in the Middle East — we have seen the birth of new players as digital ventures, like QIC DVP, are now organizing the MENA Insurtech Association.”

Chasing New Opportunities in Saudi Arabia

The impact of Democrance’s new Saudi subsidiary, coupled with the establishment of their office in Riyadh with the support of Aramco, will surely reverberate on multiple levels. Economically, this strategic move indicates a devotion to investing in the Kingdom’s digital infrastructure, in an effort to enhance financial inclusion and diversify Saudi’s economy.

For global Insurtech companies, Demorance’s accomplishments serve as inspiration and evidence of the growing opportunities in MENA. It demonstrates the potential for innovative technology solutions to find fertile ground in Saudi Arabia and encourages similar ventures by other global players, as supported by reports on plans by health insurer giant Buba Arabia to invest in Healthtech and Insurtech startups. Today, the highly optimistic growth projections for the Insurtech sector in the Gulf act as both incentive and evidence of the industry’s massive potential.

Ultimately, their collaboration with AstroLabs as a market entry partner highlights the importance of strong local partnerships in successfully navigating new markets with their own intricacies and frameworks. This expansion strategy can therefore be considered a blueprint outlining the required trajectory for hopeful Insurtech ventures planning on solidifying their position in the promising MENA market.

For companies considering market entry, the time is now to explore opportunities in Saudi Arabia, leveraging the evolving digital landscape and supportive ecosystem for Insurtech ventures.

Check out how other leaders are supporting Saudi’s transformation journey