Mohamed El Dishish, Chief Executive Officer of EmiratesRe, recently gave an exclusive interview to BUSINESS LIFE about the importance of reinsurers and insurers development through corporate innovation. It was the only way to tap into the mind of this reputed CEO who has made EmiratesRE stand out at a challenging period in time.
EmiratesRE is a renowned leading Retakaful Institution for regional and worldwide markets, grounded on Fiqh Al Muamalat, observing the rules and regulations of the Islamic society. The Company has set a solid foundation to develop and improve its best-in-class, fit for purpose, Risk based steering capabilities alongside the growth of the organization.
Reaching the top needs power and skilled leadership, especially if the circumstances are hard with low energy prices impacting the MENA markets. For sure, EmiratesRE has all of this. Its Chief Executive Officer, Mohamed El Dishish, possesses over 42 years of wide experience and exposure in the field of Shari’a Compliant insurance and Islamic finance. His longstanding practical experience has been in the renowned Shari’a Compliant insurance & Retakaful entities. Prior to joining EmiratesRE, Mohamed was the Chief Executive Officer of Al Fajer Re (Kuwait). Previously, El Dishish was the Chairman & Managing Director of Nile Family Takaful & Nile General Takaful.  He holds CPA from American Institute of Certified Public Accountants. El Dishish has exposure in the field of insurance and finance having practiced as a Public Accountant with Ernst & Young in Egypt and the UK for 10 years. He then held senior managerial positions for 32 years within the insurance and Shari'a Compliant insurance & reinsurance industry. EmiratesRE's Chief Executive Officer restructured and rebranded the company to be Emirates Retakaful Limited (Emirates RE) and transferred the reinsurance portfolio to the new entity . The Company is established at the Dubai International Financial Centre (DIFC), Dubai, U.A.E. with a capital of USD120million.
Insurers and reinsurers operating in the Middle East are well capitalized, although fiscal budget pressures and pockets of political instability overshadow strong balance sheets. Commercial activity is highly correlated to oil demand and the recent period of low energy prices has depressed gross domestic product (GDP) development, and consequently, investment and construction across the region. However, Middle Eastern insurers maintain strong capital levels to offset volatility.
BL: Do various reinsurers see slight rise in profits despite challenging year especially that profits boosted by rise in primary business as reinsurance book remains flat?
Mohamed El Dishish: 2016 has been a challenging year, especially in the MENA region, as the effects of low oil prices have seen the scaling back of insured projects and globally rates have continued to soften, affecting even the largest reinsurers. However, EmiratesRE has shown the value of its regional expertise and has maintained its written business.
BL: Why India attracts major global reinsurers? What is your plan in this regards? Would this step increase competition in an already soft market?
Mohamed El Dishish: We recognized from several years ago that the markets of the Indian sub-continent would be important to EmiratesRE and our Indian portfolio is growing. Changes in regulation from the Indian government and the development in the country have now attracted reinsurers faced with difficult markets elsewhere, as we noted above. We see the developments as being positive for EmiratesRE as the Indian market is widened and additional opportunities present themselves. We will apply our local expertise, as we have faced with similar competition in the MENA region, and we are confident that we will see business develop from this. We have attended recently the Indian Rendezvous in preparation for April Renewal and got the positive confirmation from our clients and targeted clients to increase our portfolio written from the market.
BL: Should the market diversify if it is to continue to grow and be sustainable in the long term?
Mohamed El Dishish: I have said for a long time that in order to properly grow and be sustainable the takaful and retakaful industry needs to expand its expertise beyond its current lines of business and be able to work on a larger scale. Locally we have examples in such areas as Energy and our airlines which are very successful. To do this the takaful industry needs to compete in terms of product and expertise as well as price. I believe this is now recognized in the industry and EmiratesRE will always be available.
BL: What are the key developments of recent years and the trends to look out for in 2017 and the near future?
Mohamed El Dishish: We have seen a continued expansion of capacity in the global reinsurance market fuelled by the policies of central banks as capital looks for returns. I see the local markets and takaful firms developing business increasingly through the use of new technology, and developments in areas such as cyber, but the effects of overcapacity will continue, certainly through 2017.
BL: How is the Market changing significantly, driven by a mixture of regulatory change - notably the long-pending implementation of Solvency II - and an increasingly tricky business environment?
Mohamed El Dishish: The impact of regulatory changes on reinsurance in particular Solvency II cannot be described as a significant one-off event. It is rather a global trend of regulators trying to fix the post-financial crisis world by way of stronger regulatory oversight as well as the risk bearing capacity of reinsurance companies. Regulators try to retain the reinsurance business within their countries (or with the economic zone respectively) and hope thereby to help their economies as well their level of control on the domestic entities. However this has a downside from the risk management perspective as of course in case of reinsurance, the impact on diversification could be negative. In summary, the bar will be raised and this is good for business.
BL: It is claimed that the sector has grown steadily in recent years and it has become increasingly innovative. What about the renewals? What are your interpretations?
Mohamed El Dishish: EmiratesRE has seen growth in the MENA region in the 2017 renewals but overall what growth there is has been outpaced by the growth in capacity. In such a market there is increased attention to terms and conditions and this has been evident, not just in January 2017 but over several years' renewals.
BL: Is it true that disruptive challenges create huge opportunities for reinsurers? How? Does this point apply to EmiratesRe?
Mohamed El Dishish: We see disruptive challenges coming from two angles – new forms of capital entering the market which we have already discussed and new forms of reinsurer who have a different business model. In EmiratesRE we have always emphasized that our local knowledge and expertise is combined with our ethical approach and whilst these disruptive influences undoubtedly pose a challenge we also see an opportunity for our own unique approach. To be successful in this we recognize that the quality of our product and the service we offer must be equal or superior to our competitors and this we strive to do.
BL: Is it true that the reinsurance industry has been worrying about cyber threats for some time? What is the solution?
Mohamed El Dishish: Reinsurers are paid to worry about emerging risks before others, this is their job and it would be surprising if it would be otherwise. When people started driving cars, it was clear that the damage caused by a car would be significantly higher than a damage caused by a horse, so the insurance industry helped in UK to draft the Road traffic act in 1930. Cyber risk is going to be similar. We have an educational learning period and the (re)insurance industry must help policy makers to take risk mitigating steps to regulate the cyberspace and define limits of insurability. Ultimately the cyberspace is an extension of the real property and liability of real and legal persons. This will make cyber insurance a natural extension of the P&C insurance world, eventually.
BL: Why the MENA's insurers need to embrace new ways of working, novel ways of interacting with customers, and alternatives to traditional products and services?
Mohamed El Dishish: We have already seen moves by takaful companies in the UAE to embrace new technologies through online sales and broaden their customer base through alliances with banks. We hope that as the market for takaful products widens we will see the benefits in the retakaful space.
BL: How are your valued efforts and contributions shaping EmiratesRe's future?
Mohamed El Dishish: My aim since joining EmiratesRE has been straightforward. A First, to give the Company a sound base which we achieved by moving the Company under the DIFC and DFSA and removing some legacy issues. Second, to develop the Company's business profile in line with widening the takaful industry as a whole. A We are only at the start of the second phase but we have already started to diversify the business and we are looking at opportunities to take the Company to the next level. We are a believer that Reinsurer should be too big to fail as it is looked at the backbone of the insurance industry. Being big and international will enable the reinsurer to provide to direct company other services and benefits other than capacity cover.
BL: What are your plans for the year 2017? Please provide us with EmiratesRe key financials (chart)?
Mohamed El Dishish: We are looking to expand the Company's facultative portfolio including the Energy business. We have restructured our underwriting department with an aim of giving more joined up service to the regions which we service. We are looking especially to develop our ties within the MENA region and with Asia and the Indian sob-continent and Africa.
BL: How do you evaluate the recent UAE insurance regulations? What are your recommendations?
Mohamed El Dishish: The UAE insurance regulation is a bold step by the Insurance Authority and a much needed one for the UAE as one of the biggest MENA insurance markets. The IA has now raised the bar for themselves as the written regulation will not change anything if the implementation and enforcement actions were not be taken seriously. The Insurance Authority needs to act consequently against non-compliance, treat the compliant entities fairly and remain independent. This will put the UAE insurance market to its rightful place within the MENA region. We have to mention that we have seen the IA takes some measures against none compliance and following up seriously on the reporting requirements.
