Download Zurich launches first Life Insurance proposition designed specifically

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Zurich launches first Life Insurance proposition designed specifically for Middle East SMEs
Region's SMEs particularly exposed to the loss of a key person
Dubai, United Arab Emirates, March 30, 2014: Small and medium sized enterprises (SMEs) in the
Middle East are leaving the very existence of their business at risk by failing to put in place protection
against the loss of a key person within the organization. The risk is highlighted by Zurich International
Life, which today launched a first-to-market life insurance proposition called Zurich Business Protect,
designed specifically to protect SMEs in the United Arab Emirates, Bahrain and Qatar.
While the majority of SMEs will typically have insurance to protect their assets, such as their
premises, stock and vehicles, the human asset of a business is often left uninsured, potentially
threatening the future growth of a business.
Nearly all businesses have ‘key persons’ whose skills and expertise make them difficult to replace.
Often, these people are business owners, but they could also be a Managing Director, CFO or Sales
Manager. The absence of these key persons can be the biggest single risk to the profitability and
even the very existence of a business – especially for SMEs where the relative impact will be much
greater.
SMEs, defined as businesses with less than 250 employees and an annual turnover of less than AED
250 million (USD 68 million), play a key role in the region’s economy. In the United Arab Emirates for
instance, it is estimated that they represent 95% of all registered businesses, employ 42% of the
workforce and contribute to 40% of GDP.
Zurich notes that the loss of a key person at an SME could not only have an adverse impact on
profitability, it could also impact the ability of the surviving business owners to pay out business
liabilities and sustain the life of the business.
“Life insurance products are one of the least understood and used solutions for business planning,”
said Jawed Barna, CEO of Zurich International Life MEA. “At Zurich we are committed to delivering
customer centric solutions. As a result of extensive market research, we have designed a proposition
for SMEs in the region culminating in the launch of Zurich Business Protect. It provides tailored life
insurance solutions that protect SMEs against the death or critical illness of a key person by providing
Key Person, Liability and Partner protection.”
Zurich Business Protect typically protects an SME against three scenarios:
‘Key Person’ Protection
The loss of a key person can cause a business to be hit by a loss of profit, reduced sales,
recruitment/training costs and disruption to their plans, to name but a few potential problems.
Business protection solutions provide the SME with a life insurance plan, with optional critical illness
cover, written on the life of the key person.
‘Liability’ Protection
If one of the business owners is diagnosed with a critical illness or dies, it could affect the business’
ability to repay a loan or personal guarantee that could put the business’ profitability at risk. For
instance, a bank may decide to recall a loan or take control over assets that would impact the
business' sustainability. Business protection provides liability protection that ensures the SME can
repay money owed if a key person dies or is diagnosed with a critical illness.
‘Partner’ Protection
If a business partner or major shareholder dies, the family of the deceased partner are likely to inherit
their share of the business, while the surviving partners may struggle to find the funds to buy out the
family’s share. Business protection allows the surviving partners to keep control of the business, while
providing the family of the insured key person with financial security.
Barna concluded: "While there is no doubting that the SME sector will continue to be a major driver of
business growth across the region, business owners would do well to keep an eye on the future
sustainability their business with robust business protection planning."