The global insurance and reinsurance market is facing a series of unique challenges. Reinsurance insurance has always been an opaque market and its culture relies on trust built between cedent companies and their reinsurers in the framework of a long-term relationship.
Gulf insurance is currently the largest insurance group in the region in terms of written and retained premiums with operations in both life and non-life insurance segments and its activities are further supported by first class reinsurance security.
By cultivating a growing network of over 1000 insurance experts having more than 50 branches across MENA region, the group has always been recognized for its professional excellency.
GIG has created a competitive edge in its markets through the implementation of a comprehensive approach involving use of Information Technology, Product Innovation; Customer Relations Management, Enterprise Risk Management and prudent underwriting practices.
Gulf Insurance has become one of the largest insurance networks in the Middle East and North Africa with companies in Saudi Arabia, Jordan, Lebanon, Syria, Egypt, Iraq, Bahrain, Emirates and Kuwait by lending utmost professional and personalized attention to the current and future needs of its valued customers.
Isam Abdelkhaliq was appointed as the Group's Chief Operating Officer (COO) as of the above mentioned date, in addition to his current position.
Abdelkhaliq is now responsible for managing the Group's operations related to reinsurance treaties and the development of underwriting policy, technical reserves, operations of bancassurance and insurance products, noting that the group includes a number of major insurance companies in Kuwait, Bahrain, Egypt, Jordan, Iraq, Saudi Arabia, Syria and Lebanon. Besides, Abdelkhaliq was appointed as the Chairman of Fajr Al Gulf Insurance and Reinsurance Company in Lebanon - a subsidiary of the group.
It is worth mentioning Abdelkhaliq has been the CEO of Arab Orient Insurance Company since 2000, since then he contributed to the company's growth and advancement to become a leading company in the local market in terms of premiums and profits for the seventh consecutive year. The company has also earned an upgraded financial rating as B++ (Good) and credit rating as bbb+ which is considered the highest local rating.
The Group's CEO has declared that this promotion came to be one of the Group's efforts to develop its operations deployed in the countries of the region; it is part of its quest to become the leader of the insurance sector in the Arab World, with international competitive level by attracting experts and specialists in the insurance industry wherever they operate.
BL: Oil Prices fall to four-years lows, how will this decrease in oil prices impact the insurance industry and specifically the insurance rates?
Abdelkhaliq: Lower oil prices will definitely benefit the insurance industry due to the fact that people will have more disposable income and demand will increase for Insurance products such as Motor and Travel Insurance. Cheaper fuel means cheaper flights and people who use the public transport will definitely shift to using their motor vehicles.
The increase in volume of business will lead to aggressive competition amongst insurers in the marketplace which will therefore drive insurance rates down.
However, this may backfire as lower oil prices will also likely increase the number of kilometers driven by motorists which could have a favorable impact on claim frequency that may cause serious problems to companies who do not charge suitable premiums.
BL: How to ride the correction in the insurance and reinsurance markets?
Abdelkhaliq: The insurance and reinsurance market is always in a state of change, insurance and reinsurance market corrections will depend on which cycle the market is in. These cycles typically last from two to ten years and are comprised of a hard market and a soft market.
The characteristics of a soft market in the insurance industry include lower insurance premiums, broader coverage, reduced underwriting criteria, increased capacity and increased competition among insurance carriers.
On the other hand, the characteristics of a hard market include more stringent underwriting criteria, less competition among insurance carriers, higher insurance premiums and reduced capacity.
There are two diametrically opposed strategies for responding to the cycles one involves Maintaining market share no matter what the cost is by offering low premiums and wide coverage and the other involves maintaining profitability by having Insurers prepared to walk away from risks which are not charging an equitable risk based premium or terms and conditions.
BL: How do you find the present political turbulence reflection on the political violence covers in the MENA region?
Abdelkhaliq: If we take a look at the past couple of years, we can notice that the market has shifted from the terrorism and sabotage insurance policies to the more comprehensive political violence insurance policies. That being said, I do think that penetration levels across the MENA region are still considered relatively low in spite of the continuous threats that are around such as the increasing number of jihadist/Ideologists groups who are capable of targeting government/diplomatic assets and touristic sites.
BL: The World’s risks loom large in the insurance industry, how and why?
Abdelkhaliq: One can answer this question just by looking at global warming and how it is affecting the world. Ice caps are melting and temperatures/sea levels are rising all due to the increased concentration of heat-trapping gases caused by burning fossil fuels. This in the long run, if not dealt with, will firstly lead to increased hurricane peak, wind intensities and storm durations. Secondly, it will lead to an increase in Wildfire frequency and severity, intense precipitation events leading to flooding and inundation and finally the increase in hot days and heat waves will directly affect the health of people. All of which will result in huge losses to the insurance industry.
BL: Recently, Gulf Insurance announced that it is providing insurance services in Spain, what is the projected business influx from such service in Europe?
Abdelkhaliq: There has been a trend by which individuals across the region have developed an interest in acquiring properties and real estate across Spain. These individuals will require protection against fire, accidents, thefts and medical expenses. The aim of this initiative is to ease the overall process of obtaining any type of insurance, in collaboration with leading insurance providers in Spain.
BL: Knowing that Gulf Insurance Group is the largest insurance company in Kuwait in terms of written and retained premiums, with operations in both Life and Non-Life insurance, how does gig stand out among the rest of the MENA insurers?
Abdelkhaliq: There are 366 Insurance companies in the MENA region and Gulf Insurance Group at the end of 2013 was ranked number ten which is a great achievement. This has been accomplished by maintaining leadership in different markets, financial strength & credit rating, regional expansion, technological edge the group possess and clear strategic vision well communicated amongst each member of the group.
BL: What is the business link between gig Jordan, Lebanon and the rest of gig Units?
Abdelkhaliq: As of 1/02/2014 I was appointed as the Chief Operating Officer (COO) of Gulf Insurance Group's in addition to my current position as CEO of gig | Arab Orient Insurance Company as well as Chairman of Fajr Al Gulf Insurance and Reinsurance Company in Lebanon. And since group companies use the same reinsurance umbrella treaty the group's operations and the development of underwriting policy, technical reserves, operations of bancassurance and insurance products need to be effectively managed in order to maximize shareholder wealth.
BL: How do you assess gig mega expansion into the MENA region? Are you satisfied with such expansion?
Abdelkhaliq: Gulf Insurance has become one of the largest insurance networks in the Middle East and North Africa with companies in Saudi Arabia, Jordan, Lebanon, Syria, Egypt, Iraq, Bahrain, Emirates and Kuwait by lending utmost professional and personalized attention to the current and future needs of our valued customers.
BL: Does gig have the appetite for further expansion?
Abdelkhaliq: We at Gulf Insurance Group plan to continue our regional expansion strategy towards establishing ourselves as a major player in the regional insurance markets and increasing our business portfolio. We intend to do this by strengthening our presence in the regional markets and by developing a unified branding strategy.
This expansion will allow us to maximize the group’s revenue as a whole, seek the best opportunities within our strategy and Risk appetite that would give us a high return on Capital Invested and provide a presence of the group in new areas in the MENA region.
BL: What are the present challenges of Gulf Insurance Group (gig) Jordan?
Abdelkhaliq: The market in Jordan is saturated with 27 insurance companies operating in the kingdom, and in absolute terms, it is rather small. Insurance companies actively compete for business in the market thereby forcing premium rates to fall. Therefore, Insurance companies need to stick to sound underwriting discipline. Otherwise companies run the risk of impairing performance and ultimately eroding capital.
BL: What is the limit of your ambition? What are your hopes for gig’s growth?
Abdelkhaliq: There are no limits to my ambitions, as long as I am committed to reach them. As are my hopes for Gulf Insurance group to become one of the top 5 ranked companies in the MENA region within five years and to reach premiums levels of One Billion US Dollars Income.
BL: How do you distinguish Levant’s Insurance and reinsurance industry from that of the region’s?
Abdelkhaliq: In the Levant area insurance dates back to the 1940s and expanded rapidly. By the 1980s many companies were competing against one another in what are considered to be small markets. As the Levant area has seen its fair share of unrests, when economies picked up the insurance sector always experienced a boom.
BL: Is Insurance a rewarding career?
Abdelkhaliq: The most rewarding aspect of my career in insurance is the fact that I have hired and trained hundreds of employees in the last 14 years. Some of whom became top executives, general managers and CEO’s in different companies in Jordan and the Arab World as well. I cite this above all my other accomplishments because it added great value to our employees and improved their livelihood.
BL: How do you evaluate the achievements of gig, Jordan, Lebanon, Syria, Egypt, Iraq, Bahrain, United Arab Emirates and Kuwait?
Abdelkhaliq: The achievement of the group has been great, as I said we were ranked number 10 out of the 366 Insurance companies operating in the MENA region. However, our job does not end here, as in order to become one of the top 5 ranked companies in the MENA region and reaching that One Billion US Dollar target will require our full determination, passion, heart, and discipline.
BL: What do you look for from an Underwriting Officer?
Abdelkhaliq: The main features I look for in an underwriting officer are mathematical, negotiation and assessment skills, desire to learn and ability to work closely with other people.
BL: Is Jordan’s Government considering new supervisory system for insurers? What are your comments on Jordan Insurance Association?
Abdelkhaliq: On the contrary, the Jordanian government concluded a two-year debate by merging the Insurance Commission with the Ministry of Industry and Trade as part of a cost-cutting exercise, putting the insurance sector under the Insurance Directorate at the Ministry. It is still too early to comment on the performance of the new regulatory body.
BL: What are your comments on auto insurance in Jordan?
Abdelkhaliq: In general, motor coverage is a low-profit line of business. That being said, state set tariffs for compulsory third-party liability auto insurance in Jordan are set at a low level. Without being able to increase these tariffs I worry that the insurance industry will continue to be unprofitable in this line of business. Implementations of reforms have been promised many times however with nothing materializing yet. However, we at gig | Arab Orient Insurance Company are achieving great results within this specific line of business.
BL: What are your comments on health insurance in Lebanon?
Abdelkhaliq: Private health insurance is not yet well developed and covers only about 12% of total population. The rest of the population of 1.5 million do not have this kind of health insurance, but are covered up to 85% by the Ministry of Public Health for treatments in a public hospital. Therefore, market penetration is on the low side which can be capitalized upon.
BL: Being close to the end of 2014, what is your feasibility study for the year 2015?
Abdelkhaliq: Our feasibility study for the year 2015 includes the following:
Maintain our leadership position in all markets and develop our market shares.
Continue our regional expansion plan and seeking the best opportunities in MENA region and evaluate the profitable and advantageous opportunities.
Continue the development of group employees to improve and develop their technicalities and to improve their career path.
Continue the developments on using the IT technology to develop and expand our sales and company’s services.
Promote the company's competitive position.
Achieve sustainable growth in GPW consistently with economic & market conditions.
Study the customers’ requirements and produce new innovative products that cover all their needs.
Evaluate business opportunities with acceptable risk factors.
Unifying the group underwriting guidelines and carefully review the reinsurance limits and company’s capacity.
Maximize the return on investment that will satisfy the needs of our shareholders and aligned with our investment strategy.
BL: What is the collective capital of the gig Network?
Abdelkhaliq: Our consolidated assets exceeded US$ 1.0 billion, our consolidated shareholders’ equity reached amount of US$ 277 million as at Sep-14, which affirms our solid position in the MENA region.
BL: Which country is contributing the best performance and profit?
Abdelkhaliq: Kuwait is the main source of revenue and profits (thought Gulf insurance and reinsurance “gig – Kuwait” and the investments of gig parent “which is the parent of the group companies”), however, the contribution of Bahrain, Jordan and Egypt is very important to gig in terms of premiums and profits.
BL: What about gig’s retention?
Abdelkhaliq: Our retention in all classes is the highest among the Arab insurance market moreover, gig has a unique combined reinsurance program which allows the company to increase its capacity and therefore to enhance its technical profit and attract new promising opportunities.
