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Everything you wanted to know about AXA and GIG (Gulf Insurance Group) but didn’t know who to ask?

2020 was, without doubt, a huge year for sudden and unforeseen change and the insurance market, like most sectors of industry, saw some surprising announcements: with many insurance providers (insurance companies, brokers and online alike) altering the way in which they do business, or even re-thinking doing business at all. Late November saw an announcement from AXA, Europe’s second-biggest insurer, that it had agreed to sell its insurance operations in the Gulf region to Gulf Insurance Group (GIG). This deal is expected to be closed by the third quarter of 2021.

At InsuranceMarket.ae we have thousands of AXA policyholders and are conscious that many of these customers may have questions about what this announcement means for them. We therefore thought it would be a good idea to give you “our take” on the situation and answer some of the common queries we thought you might have.

Who is AXA and specifically, AXA Gulf?

AXA is one of the largest global Insurers and is headquartered in Paris, France. In the Gulf (GCC) region, it is in the top 5 insurance companies and has been trading in the region for 70 years: offering a range of products and services for all customer segments including personal lines for private individuals, small business products and large corporate insurance solutions. The most popular lines of insurance sold are Motor, Medical (Health), Life and Home.

AXA Gulf currently operates across the UAE, Oman, Bahrain and Qatar and employed over 800 employees servicing more than 1 million customers from 25 branches as well as retail shops, kiosks and online. In November 2020, it announced that it was selling its business in the region as part of a re-structuring programme and that as such it would handing over its operations to GIG (Gulf Insurance Group).

Who are Gulf Insurance Group?

Gulf Insurance Group trades under the brand name gig and was established in 1962. The largest insurance Group in Kuwait in terms of written and retained premiums has seen its operations in life and non-life as well as Takaful insurance, make it become one of the largest insurance networks in the Middle East and North Africa.

Currently operating in the GCC, Levant and North Africa, gig has actively sought investments, partnerships and merger & acquisition opportunities as part of its growth strategy and in 2020 made a number of high-profile business moves. The acquisition of AXA is just one example, but perhaps the biggest and boldest.

So, what does this all mean? Why do companies do this?

When acquisition of a company takes place, it is usually because of two key factors.

  1. Own strategy. A company may decide it no longer wishes to trade in a certain business segment, location (ie. country/region) or even trade at all. It makes this known to the relevant markets in which it operates in order to seek interested parties to either buy it or form an alliance.
  2. Strategy of others. Other companies may have identified this organisation as a good investment and/or commercially attractive and decided to try and buy it outright or merge with it. Many businesses buy their competitors in the same market to maximise their market share, boost their customer base and increase their products and services offering.

In this case, AXA Gulf was a major player in the GCC insurance market with a very large customer base, revenue from insurance and related services sales and extensive product range. However, it decided after many years that it no longer wanted to operate in the region and made this known. In contrast, gig was looking to expand its already extensive operations across the Middle East and North Africa and therefore saw AXA’s decision as a perfect opportunity to strengthen its business through acquisition. In November 2020 it therefore decided to “do a deal” and buy AXA Gulf.

OK, I understand that now. Change happens, of course.

However, I’m an AXA policyholder based in Dubai and wonder what this means for me and my policy?

When change happens it can make us feel a bit uncomfortable: especially if it is something that we feel could directly affect us. However, there is no need to worry about this particular topic. It is very commonplace for companies to merge with each other or be acquired by another and as insurance is a regulated industry, there are very stringent guidelines to follow to make sure that the interests of consumers are protected at all times. In the UAE the Insurance Authority (IA) will have been heavily involved as the Regulator of insurance locally and to ensure compliance with relevant Federal Laws too: particularly relevant for mandatory insurances like Motor (car insurance Third Party Liability minimum cover) and Medical (EBP minimum cover for all UAE residents).

Is my Car Insurance Policy with AXA cancelled when gig takes over?

Your cover is in no way affected or prejudiced because of the impending acquisition by gig. Your Policy will continue to be in force (effective) up until its renewal date unless you choose to cancel it early or in the event that you stop making any applicable installment payments. In terms of customer service, you should continue to receive the same level of service from gig as you would have enjoyed through AXA once the formal take over happens scheduled for Q3 this year.

So, what happens next? Will I get sent new Policy documentation?

As InsuranceMarket.ae are not involved in this business change, we can of course only speculate what steps will follow. However, in our experience, this is what usually happens in such situations:

  1. You should receive some form of notification advising you of the change in operations. This is usually a joint communication and could be in the form of a Notice to Policyholders, emailed letter or dedicated website post: talking about what changes you can expect to see to documentation, key contact numbers, enquiry and complaints procedural changes etc.
  2. The communication may mention brand transition: however, if it doesn’t mention this specifically, you should anyway start to see a change to logos, imagery and brand names on any correspondence you receive from the company in the future.
  3. Your policy will remain unaltered in terms of coverage provided. Terms and conditions will continue to apply since these are what you agreed and signed for when taking out or renewing the Policy. It is usual practice NOT to re-issue policy documentation in the new branding until its expiry ie. the renewal date. Your renewal invitation (the reminder you are sent that your renewal will be duly shortly) should make reference to the new brand and company name change or may even just come in the new brand itself if your renewal is in Q3 2021.

I bought my policy specifically as it was an AXA product and they are a brand I know and trust. My renewal is due soon and now I’m confused.

Should I move insurance companies now that AXA Gulf are not going to be around?

Of course, we all have our favorite brands and look to buy from “famous names” or people who have come to know and trust. And it wouldn’t be appropriate for us to advise you directly on this since everyone’s needs and preferences are different. We can say, however, that gig is an equally well-known and widely respected insurance company in the GCC region with thousands of satisfied customers and a high financial security rating. So, you should be able to have complete confidence in them, their service and their ability to provide you with high-quality cover and peace of mind.