Insurance companies play a major role in the economy. However, the year 2014 was a challenging one for Lebanon due to the political and economic situation that impacted the entire region, and also because of the tough competition. Nevertheless, there are two positive facts that stand out.
The Lebanese insurance industry did not experience any decline, and Libano-Suisse achieved year-on-year growth of 6% in premiums, with profits also increasing. Libano-Suisse is among the top five insurance companies in Lebanon chaired by the famed politician and businessman Minister Michel Pharaon whose wise vision and continuous support contribute to the implementation of Libano-Suisse Strategies.
Lucien Letayf, Jr., Chief Executive Officer and Director General of Libano-Suisse Group, Insurance Company talks to BUSINESS LIFE about his plans, vision, strategies and views on the GCC's economy and the globe's.
Lucien Letayf Jr. leads one of the Arab’s largest corporations. Leading a team or group is a real skill that takes time, thought and dedication. Leadership makes the difference between success and failure.
His charisma and clear vision helped him in maximizing the chances of success in an increasingly-complicated, competitive and ruthless business world and thus raising Libano-Suisse Group, Insurance Company to new heights and placing it in new markets. Also, his education has allowed him to achieve his ambitions and lead a large regional insurance group. Lucien Letayf Jr. used all his knowledge and expanded the activity of the group throughout the Gulf and the Levant.
Libano-Suisse Insurance Group is a global and regional insurance company built with operations in more than 6 countries. It has over 30 branches and agencies all over the Lebanese territory, the Middle East and the Gulf. The company is involved in all classes of insurance and has over 250 employees around 14 distinct line of businesses—including general, life, and health insurance products and services to private and corporate customers in Lebanon, the Middle East, and the Gulf region. It offers its services through a network of branches, agents, brokers, and sister companies in Qatar, Kuwait, Egypt, Bahrain, Saudi Arabia, Jordan, UAE and Lebanon. The company was founded in 1959 and its head office is based in Beirut, Lebanon. Libano-Suisse Insurance Company has 56 years age today.
BL: How was the performance of Libano-Suisse?
Lucien Letayf Jr.: Generally, the year 2014 was very challenging for Lebanon and also for Libano-Suisse. We were able to increase our book of business by almost 6% and we met our profitability target for the year despite all the surrounding challenges. On the whole, we'll be keeping an eye on this year's political and security developments in Lebanon and the region hoping that the situation in 2015 will improve to make it a consolidation year and try to achieve profitable growth!
BL: What are the most remarkable achievements that should be implemented in the insurance industry?
Lucien Letayf Jr.: The industry still faces major challenges that need to be addressed. However, the insurance industry performance has improved since the adoption of new products, new achievements in upgrading policies and risk management. In addition, with the recent election of Mr. Max R. Zaccar as new president of the Lebanese Insurance Association (ACAL), we look forward to have tangible progress and dynamic changes in this sector.
As well, the new traffic law that went into play on April 1st is a good achievement but still needs awareness campaigns that aim to educate people on the various driving violations, fines and repercussions.
I hope also to see a new insurance law in Lebanon that will serve the insurance companies and push forward the level of the insurance sector; this should be achieved with the help and contribution of ACAL.
Additionally, Lebanon will hold The 31st General Arab Insurance Federation (GAIF) Conference in May 2016 in Beirut and we all hope that this will put Lebanon and its insurance sector in the frontline and reaffirms the leadership of the Lebanese insurance industry, locally, regionally and internationally. This conference will reflect positively on the Lebanese economy and we hope it will be a great success for Lebanon in general and for the insurance business in particular.
BL: How do you keep Libano-Suisse in the spotlight?
Lucien Letayf Jr.: Libano-Suisse as usual has new services and new tailor- made products which answer the needs of the Lebanese market.
We are keen to maintain our high standards and our culture and as usual, we follow our clients wherever they are in the Middle East and the whole region.
In addition, Libano-Suisse is also participating in a variety of social events in Lebanon. We are official partners of Baalbek International Festival since 2013. This year, we are partners of Beirut Art Center, a contemporary art exhibition center. We established this partnership since at Libano-Suisse, we believe in art as a fundamental element of our country’s and region’s culture. Lebanon has always been renowned for its dynamic spirit and creative energy. And through this energy, art thrives as a means of expression, dialogue is stimulated, and people are brought closer together.
We are strongly engaged with the local community, on many levels. Our activities range from supporting reforestation to classical music concerts, young theatre performers, and organizations involved in health and road safety. Libano-Suisse is also highly committed to the improvement of insurance knowledge and academic expertise in our industry. This has driven us for the past 28 years to grant the Pierre Sehnaoui Award to the top students at the regionally leading institute for insurance studies, the University of Saint Joseph’s ISSA. We are excited to provide this recognition and encouragement to young people in our industry because we see how the ISSA programs are continually improving and that educating young talents in insurance industry is a major key of success for the whole industry.
BL: What are your targets?
Lucien Letayf Jr.: We are investing a lot on quality and we are very proud to announce that this year, Libano-Suisse became ISO-certified. This provides another milestone for the company in its mission to satisfy its clients through the pursuit of excellence because we care about our services. This kind of external assessment gives us confidence that our performance indicators are reliable, accurate and pertinent and will allow us to rate Libano-Suisse in the near future.
Our aim is to maximize our client satisfaction and provide great service for our clients/partners worldwide and to assist them in their insurance needs by providing them tailor-made regional products. Our objective is to remain among the leading companies in the region. Currently, Qatar and Kuwait are developing the new insurance laws and this will give a new impulse for the insurance sector in these countries where Libano-Suisse will certainly align with these new laws and regulations.
BL: What about growth in the emerging markets?
Lucien Letayf Jr.: Growth is present in emerging markets such as Saudi Arabia and the UAE. Still Saudi Arabia is the first and the biggest insurance market in the Middle East. And we hope that our sister company Amana Cooperative Insurance will be among the leading insurance companies in the Kingdom.
BL: What are your comments on the insurance sector in KSA and UAE?
Lucien Letayf Jr.: Opportunities and growth are abundant in the emerging markets such as Saudi Arabia and the UAE. Although KSA and UAE are the biggest and most competitive and difficult markets in the Middle East, Libano-Suisse is doing well. Saudi Arabia's insurance market had premiums worth $8.1 billion in 2014, the second biggest in the GCC. Saudi Arabia was also the GCC's second-fastest growing insurance market in 2014, with an eight-year Compound Annual Growth Rate (CAGR) of 20.3%. Insurance premiums grew by more than 20% in 2014, helped by premium rate increases in the medical and motor sectors. However, Saudi Arabia's insurance penetration levels (1.1%) are still significantly below those of most advanced economies. Whereas, the UAE insurance market has seen total premiums cross the AED33-billion (US$9 billion) mark last year for the first time, compared to AED29.5 billion for 2013 , according to the director of the UAE Insurance Authority. This represents a growth of more than 10%, according to preliminary estimates of the regulator.
In Dubai, we established The Brokerage Firm and we employed young and dynamic professionals to better serve the Lebanese diaspora and local Arab groups.
BL: Would The Brokerage Firm cater only to the UAE market?
Lucien Letayf Jr.: At the present, The Brokerage Firm started with the U.A.E market and hopefully we are looking forward to enter the region and other countries in the near future.
BL: What are your expansion plans?
Lucien Letayf Jr.: Expansion is a normal evolution in business, not just an expansion tactic. Planning and preparing for new challenges is an important step in our strategies.
In accordance with our Expansion Plan which started a few years ago, Libano-Suisse has acquired in 2014 an insurance company in Egypt and the name of the new entity is Libano-Suisse Takaful Egypt. Libano-Suisse Takaful Egypt main lines of business are Health insurance and Life insurance and the company recently introduced new products in the Egyptian market. We are continuously working on improving our services and human resources. We keep our IT team focused on adding business values.
Takaful insurance remains at an embryonic stage of development; however, it has the potential to be a source of significant growth in the Egyptian insurance sector. Overall growth should be driven by Egypt’s wider economic performance and the potential for greater political stability. As such, we do not anticipate the insurance sector to establish a greater share of Egypt's GDP, with little evidence of an alteration in the market’s overall competitive landscape.
Currently, our next move is to enter the Iraqi market. This step could be done with local insurance companies or acquisition of local entities. Iraq represents for us a huge potential where we believe that there is a bright future for trade and investments. In fact, we are still under the process of studying this move depending on the overall Iraq’s situation which we hope to ameliorate. Iraq is potentially one of the world's naturally wealthiest nations and has until recently exhibited one of the fastest growing economies.
BL: What is your advice to the Lebanese insurance sector?
Lucien Letayf Jr.: The Lebanese insurance sector should be trustful, productive, professional and have high standards. Mergers, acquisitions and consolidation should take place among the existing insurance groups in order to build solid companies with big capital, sophisticated products and excellent services; in parallel with the implementation of a new and modern insurance law inspired from the regional insurance laws which will help to consolidate the markets and bestow confidence. This will definitely optimize the performance and increase the market penetration.
BL: Why is corporate governance important for the insurance companies?
Lucien Letayf Jr.: Corporate governance refers to the structures and processes for the direction and control of insurance companies. It concerns the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders. Good corporate governance helps insurance companies operate more efficiently, improve access to capital, mitigate risk and safeguard against mismanagement. It makes insurance companies more accountable and transparent to investors and gives them the tools to respond to legitimate stakeholder concerns such as sustainable environmental and social development. Corporate governance also contributes to development. Increased access to capital encourages new investments, boosts economic growth, and provides employment opportunities. We have to distinguish between good and bad corporate governance which is a crucial step in building the market’s confidence.
