A BUSINESS LIFE reporter has developed this unique cover interview which gives insights into achieving winning key performance indicators. It gives a practical step-by-step methodology to rediscover critical success factors especially that the answers to his questions are coming from a successful brilliant/founder and a distinguished lady leader who tackle their day-to-day business in common synergy and harmony.
Dr. Fouad Costandi Mitri Bajjali is Chairman at Euro Arab Insurance Group PSC, Chairman at Bajjali Group and the Chairman at National Express Cards.
Dr. Bajjali was previously Vice Chairman at Hayat Pharmaceutical Industries Co. Ltd. All companies where Dr. Bajjali was involved had a successful record in stable performance and successful management. He received his undergraduate degree from the University of London and PHD in economics and business studies he is a fellow of the British institute of management and a member of the British institute of purchasing and supply. Dr. Lana Sami Bader is a recognized business leader who excelled in the insurance industry. She was honored on various occasions for her outstanding achievements and performance.
As an economist and a businessman with wide experiences. Bajjali believes that the pillars of the economy are insurance and banking. In Jordan the banking sector has been more successful because of the support it receives from the central bank of Jordan as an independent regulatory body that supervises and regulates the banks performance without the interference of the government.
In most advanced countries insurance companies grow and take over or become major shareholders in the banks this is not the case in Jordan because the government intervened in insurance regulations sometimes directly or indirectly which limited the potential for improvement on the insurance performance.
Jordan established the insurance authority in the past which was reasonably successful as an independent unit but failed to perform well because it was given a free authority in different areas which resulted in mismanagement and eventually it was added to the ministry of trade and industry as the insurance unit
The government should make a clear framework with all the controls necessary and the supervisory board to ensure the correct and professional implementation of the insurance rules and regulations.
Great priority is that the correct regulations are finalized so that it becomes the basis of the frame work within which the insurance companies can operate for safe professional performance.
After fifteen years on the board of directors of Holly land insurance company Dr. Bajjale resigned to take over as chairman of Arab insurance group for two years turning the company into profitability where Dr Lana Bader was the head of the medical insurance department at that time.
Arab insurance group was controlled by the Bahrain Company for reinsurance ARIG who decided at that time to have a direct control from Bahrain over the local subsidiary; as a result Dr Bajjale resigned. a group of investors headed by dr. Bajjale took over Amman insurance company which was originally founded in 1999 as a fully owned subsidiary of Gulf insurance company under liquidation and subsequently to the acquisition the company’s name was changed to Euro Arab Insurance Group in 2002
EURO ARAB INSURANCE GROUP has maintained sustainable growth and verified its ability to provide superior customer service Due to constant on steady hard work and conservative policies. Euro Arab insurance group has adapted a policy to work only with international reinsurance companies such as Swiss Re one of the biggest reinsures in the world and has a panel on its treaty world famous reinsurer such as R&V, Genre, Mapf Re etc… so that the company guaranties all its customers with solid reinsurance cover to pay all claims if it occurs , Euro Arab insurance group offers attractive rates and stability offering a wide spectrum of insurance covers including Motor, Marine, General, Medical and Life. In addition, the Company also offers online travel insurance services.
EURO ARAB INSURANCE GROUP is proud to enjoy the status of being the highest rated entity in Jordan BB- (stable) by S&P Global Ratings due to the proven capabilities and experience.
The underwriting performance of an insurer is usually measured in terms of its combined ratio, which is defined as the total underwriting expenses and investment losses as a percentage of premiums earned. This ratio is often also used as an indicator to measure the profitability of an insurer. A combined ratio of less than 100% indicates underwriting profitability, while anything over 100% implies a loss. The average combined ratio for the MENA region stood at less than 100%, which scored favourably when compared to the 105% average in case of a US insurer. The difference was mainly on account of higher claims due to catastrophic losses arising out of hurricanes along with other smaller incidents. However, the overall performance of a MENA insurer has been volatile due to the high level of equity and property investments. However, unlike their American counterparts, insurers in the region produced higher investment returns in recent years on account of the real estate and stock market boom.
According to estimates by Jordan’s Ministry of Health, around 78% of the population is covered by health insurance. The country has committed itself to providing universal coverage of health services with its “health for all” strategy. The government is also planning to establish a new health insurance procedures to develop and expand health insurance coverage in the country.
The government plans to come up with a mandatory health insurance law, which should spur further growth in this market.
EURO ARAB INSURANCE GROUP is one of the pioneering insurance companies in the region and support free independent market to cover health and medical insurance on a higher level to give their customers maximum attention with the best medical services available to further promote this special high level of attention to medical treatment Dr. Bajjali sent an official proposal to his excellency prime minister of Jordan Dr. Omar Al Razzaz to support medical health proposal run by the private sector insurance companies which has many advantages to give a better medical attention to the patient while saving government money and increase per capita income due to the expansion of medical network to cover all privet company employee’s , and thus reducing Jordan foreign Debts compared to per capita income.
BL: How did you develop your passion for insurance business?
Dr. Fouad Bajjali: After I graduated from London I joined my father’s commercial business of importation and distribution of high quality products as suppliers to the royal household and as we had different product imported from different countries at that time all insurance was covered by the suppliers from country of origin the operation was faced with different claims including ship sinking on the port of loading and another declaring a general average also other claims covering frozen food and dairy products .
This made me very interested to read full details of each insurance policy to insure the correct coverage; as a result we invested in the establishment of the Holy land insurance company.
BL: How do you evaluate insurance in Jordan and in the MENA region?
Dr. Fouad Bajjali: Insurance companies in Jordan went through difficult times resulting from the interference of the government in fixing the third party liability (TPL) prices for motor insurance which this business led to big losses to all motor insurance sector. This reduced in a big way the progress of the insurance companies in Jordan and this could be seen by Jordan insurance federation report on return on investment in the insurance sector, the total investment is approximately 828 million JD on a meager return of 2.2%.
BL: Is it true that MENA lags behind emerging and developed markets?
Dr. Fouad Bajjali: The legal setup for insurance laws is lagging behind international level as a result insurance companies become liable for many illegal demands it’s important that the correct legal framework covers all insurances aspects should be put in place which will immediately upgrade all the insurance companies’ results bearing in mind that insurance companies are working in a very difficult environment in the MENA region and the insurance sector in general has achieved some good successes.
BL: Are insurers immune to the crisis? Why and how?
Dr. Fouad Bajjali: Insurance company business is based on buying risks as a result the attitude of most professional insurance companies will be highly cautious and as a result more careful not to indulge in risky or difficult situations which leads to crises .
BL: How to build a successful E-commerce business in today’s digital world and how helpful is it to insurance companies?
Dr. Fouad Bajjali / L.B: e- commerce has become an important tool to reduce the use of paper and to improve efficiency however great care should be taken to control misuse and fraud.
BL: Do you believe in digital marketing and how useful is it in our MENA markets? What are your constructive remarks?
Dr. Fouad Bajjali: Digital marketing is growing in importance and there should be regulatory systems to insure benefiting from technology without allowing misuse.
BL: Is the MENA insurance industry still‐developing legal and regulatory frameworks?
Dr. Fouad Bajjali: YES it developing haphazardly and insufficient serious effort is made to remedy distortions and weaknesses in the legal framework of insurance companies’ laws and regulations.
BL: What new regulations would you suggest? Why?
Dr. Fouad Bajjali: there are many points that need to be corrected or added in the legal framework of insurance companies operating modus vivendi.
BL: Why life insurance is still a small and underdeveloped market in Jordan? What are the plans of Euro Arab Insurance Group in this regards?
Dr. Fouad Bajjali: We have group life insurance which is comparatively limited however our strategy is to try to increase all divisions expect motor which is obligatory in such a way that the other divisions growth will reduce the motor as a percentage of the total premiums this was done last year while achieving 28 million JD in premiums we increased the following divisions as follows:
Marine insurance up to 651,474 JD with 29% increase.
Medical insurance up to 10,926,928 JD with 57.6% increase.
Fire and other property up to 217,513 JD with 28% increase.
Other general lines up to 217,513 JD with 37.6 increases.
During the difficult times a well-managed and strong company will perform better and will benefit from the weakness of other companies in the sector.
BL: Why foreign insurers dominate life insurance in the entire region?
Dr. Fouad Bajjali: Foreign companies dominate life sector in the area simply because they started much earlier than local companies. My uncle Mr. ZAKI ZAHER was the founder of American life insurance in Lebanon and he also became the founder of the American life insurance company in Jordan back in the 60’s and he became member of the operating board of American life insurance in USA they had a pre prepared programs and operating systems whereby they established a large numbers of agencies and each agency has its own group of sales agents as a result American life insurance group achieved i a very large operation in our area they were helped by pre organized sales programs covering life, medical pension, endowments etc. …
BL: Why should there be a mandatory health insurance law?
Dr. Lana Bader: It’s very important to have a mandatory health insurance law privately managed by insurance companies to protect the people with fixed incomes from sudden illnesses that cost amount beyond their means as a social protective network for health but this needs detailed regulations insuring that all parties involved efficiently managed that the insurance companies are reliable and stabile financially and that they are able to pay the medical body regularly so that the service is given to their customer is a constants and reliable.
BL: Are the MENA insurance companies insuring a highly volatile future? Why and how?
Dr. Lana Bader: The insurance companies should have good underwriting and as a result they can differentiate between accepting the risk on treaty or to sell the risk on facultative.
BL: What are your dreams and what are your ambitions and what are your challenges?
Dr. Fouad Bajjali: My dream is that Jordan will improve all the laws pertaining to insurance so that there is less unnecessary money paid in the wrong compensation but to insure that the compensation is paid to the rightful insured people this will develop the insurance market in a big way and will introduce new products to the insurance markets. the government should look forward to develop this market through efficient and correct management and should help the companies bigger and faster to coop with giving the correct services to the Jordanian people and increasing their excites by bigger volumes of profitable premiums thus allowing the insurance sector to grow similar to banks by increasing employment in addition the Jordan insurance federation should establish a training permanent center to give training to the young university graduates to train in insurance specialization this could be also used to train judges that will become specialized in insurance court cases this also could be used to train insurance surveyor and insurance loss adjustors .
The government should do its best to allow this sector to improve so that it will become at least as big as the banking sector and it will become the second pillar in the economic e successes in Jordan and it should not be accepted that the whole insurance sector is unable to achieve profits of more the 2.2%.
The insurance sector if it is allowed to grow in the correct manner with correct laws as explained above it will help the sector not only in Jordan but it will become a model to be followed in the MENA region by simply adopting all the achievement that will be achieved in Jordan.
BL: How do you see Euro Arab Insurance Group in the coming five years? What if peace prevails in the region?
Dr. Fouad Bajjali - Dr. Lana Bader: Euro Arab as we constantly improving and this year we achieved the second position in cash deposits in the banks amount to JD 20 million as compared to the paid up capital of the company this was achieved by constant hard work and planed expansion in premiums which reached 28.6 million JD . With our strong base and our wholly owned head office building in the best location in Amman and with a strong efficient team we are poised to achieve constantly better results despite the difficult economy situation. Our logo is we serve to grow – grow to serve and on this track we have succeeded and we will continue to succeed in serving our growing customers in the best way possible.
