Read Full Magazine Here. The recent conflict in Israel has raised questions about its potential impact on insurance premiums, both locally and globally.
The war may lead to increased risks in shipping and trade routes, particularly in the Eastern Mediterranean, which would primarily have a negative impact in the form of increased costs due to Business Interruption.
Insurers globally are bracing for the potential knock-on effects of the Israel-Regional war. The recent conflict could trigger an economical instability and increase in insurance premiums. Companies might reassess their risk profiles and adjust insurance premiums.
It’s crucial to understand that the insurance industry is intrinsically related to socio-political realities around the world. Hence, geopolitical disturbances like warfare can have consequential effects on insurance premiums.
Cope is based in Cyprus with sister companies in Lebanon and UAE:
o Cope Insurance and Reinsurance brokers (Cope RE)
o Cope Travel Solutions (Cope TS)
Both are regulated by European Union directives for insurance intermediaries
Cope is offering complete solutions across all lines of business and has already onboarded 26 motivated and homogenous seniors, all united around our human and entrepreneurial values to shape the future of our industry together. Every team member is equipped with in-depth product knowledge along with extensive network of relationships.
Cope is an employee-centric structure with strong team work culture and ambitious objectives.
Joseph Faddoul, CEO of COPE, is a seasoned insurance specialist with over 20 years of experience and a proven track record. He is a Fellow of the Chartered Insurance Institute of London and holds an Executive MBA from ESCP Business School.
Joseph has managed to secure substantial investments for his project, demonstrating his ability to attract and gain the confidence of key investors. Furthermore, he has successfully drawn some of the best talents in the market to support his initiative, assembling a team of highly skilled professionals to drive the company’s success.
In record time, Joseph has positioned COPE as a serious regional alternative to established historical players. Under his leadership, COPE has built a robust operational framework, gained significant market traction, and earned a reputation for reliability and innovation in the insurance industry.
Fast growth is a nice problem to have—but a hard one to manage as well. In this interview, Joseph Faddoul, the CEO of Cope Reinsurance, talks about Cope Reinsurance, challenges and opportunities by offering insights drawn from his own experience. Faddoul believes in having a supportive and capable top team is also key. By implementing the below mentioned changes, Cope’s CEO aims to effectively navigate the current political landscape, safeguarding COPE’s operations while continuing to deliver value to his clients and stakeholders.
BL: What are your strategies and initiatives for the year 2024?
Joseph Faddoul: Since its establishment, COPE’s strategy has been to position itself as a serious player and a reliable alternative to existing, established competitors. This means that from the very beginning, COPE aimed to be seen as a strong and trustworthy competitor in the market, offering dependable services or products that could rival those of already well-known companies.
When starting a new company, there are typically two approaches you can take. One approach is to start small, focusing on incremental growth and gradually building up the company’s capabilities and infrastructure over time. The other approach is to invest heavily from the start, creating a fully operational business with all necessary systems and departments in place.
We chose the second option and built a structure with a full setup from accounting and finance, compliance and quality control, and claims to the IT systems supporting the front office operation. COPE invested in establishing a complete and robust organizational structure right from the beginning.
We can confidently vouch that COPE strategy is achieved and this is confirmed by the strong positive market response.
BL: Could you provide me with a brief background on your esteemed company?
Joseph Faddoul: Established in October 2023, COPE stands out in the market with its unique structure, setting new standards for success. Our journey has been marked by several key achievements:
1. Attracting Investors: COPE has garnered substantial interest and investment from prominent investors, showcasing confidence in our vision and potential.
2. Building a Veteran Team: COPE has assembled a team of seasoned professionals across all lines of business. Their extensive experience and expertise have been instrumental in driving our strategic initiatives and operational excellence.
3. Regulatory Approval: Securing regulatory approval in record time has been a testament to our robust compliance framework and the trust we have built with regulatory bodies. This swift approval process has enabled COPE to commence operations without delay.
4. Market Reaction: The market’s response has been overwhelmingly positive, with stakeholders eager to engage and transact business with COPE. This strong market reception underscores our value proposition and competitive edge.
These accomplishments highlight the success story of COPE, driven by our strategic vision, experienced team, regulatory trust, and market acceptance. We are poised to continue our growth trajectory and deliver exceptional value to all our stakeholders.
BL: How resilient is the insurance and reinsurance market nowadays?
Joseph Faddoul: Despite the fact that insurance and reinsurance are in the same industry, their resilience is not correlated. While insurance and reinsurance are intertwined in the broader financial ecosystem, their resilience is driven by different factors and dynamics. The resilience of insurers is more closely tied to local market conditions, regulatory environments, and specific risk exposures. In contrast, reinsurers benefit from diversification, international operations, and advanced risk management practices, making their resilience less directly correlated with that of insurers. This distinction underscores the importance of understanding the unique characteristics and challenges of each sector within the insurance industry.
COPE has a stringent compliance framework. We onboard Insurers / Reinsurers with sufficient liquidity, financial rating and excellent reputations to ensure the timely collection / settlement of reinsurance premiums and to ensure that all parties to the contract are fulfilling their obligations.
BL: Will Israel-Regional conflict result in higher insurance premium?
Joseph Faddoul: While the Israel-regional conflict, or any geopolitical instability, can potentially lead to higher insurance premiums for several obvious reasons, the insurance industry has always been creative and managed to find opportunities in every challenge encountered. For instance, we are seeing increased demand in the political violence line of business, coupled with an increase in premiums for the traditional lines of business.
As far as COPE is concerned, risk management is part of our DNA. The current instability we are witnessing is not isolated from the continuous and ongoing conflict we have experienced over the last few decades, despite some periods of stability. As part of COPE’s Business Continuity Plan, our Lebanese operation is well-equipped and prepared to be relocated immediately in case of any disruptive event.
BL: What are the national and regional solutions for NAT CAT Insurance? How does it affect the industry’s operations?
Joseph Faddoul: The regional insurance community needs to understand that the region is prone to NAT CAT (natural catastrophe) exposure, as evidenced by the historical track record. This exposure should be rated accordingly by local underwriters despite commercial pressure to secure the business.
Regarding reinsurance, major international events that lead to significant claims usually drive reinsurance rates upward irrespective of its geographic location. Nevertheless, the recent developments in the UAE regarding NAT CAT will impact existing treaties structures and pricing.
COPE’s team of experts has identified opportunities and managed to offer alternative solutions on existing placements.
BL: How the regulatory environment and policy considerations facilitate the adoption of Artificial Intelligence (AI) adoption?
Joseph Faddoul: While Artificial Intelligence (AI) and technology are important elements to streamline business transactions, reinsurance broking remains heavily dependent on people skills and relationships.
Even though AI enhances efficiency and accuracy, personal relationships and trust remain crucial in reinsurance broking. Building and maintaining strong relationships with insurers and reinsurers fosters trust and confidence in a broker’s expertise and integrity, aspects that technology cannot fully replicate. Effective negotiation, which is essential in reinsurance, requires understanding the nuanced needs and concerns of all parties involved, a skill best achieved through personal interaction. Managing conflicts and disputes often requires diplomatic skills and a personal touch, requirements that AI cannot replicate.
In conclusion, while AI and technology play a crucial role in enhancing the efficiency, accuracy, and scope of reinsurance broking, the industry still fundamentally relies on the human elements of trust, expertise, and personal relationships. The blend of advanced technology with skilled and experienced brokers creates a comprehensive approach that meets the complex needs of the reinsurance market.
BL: What are your comments on the sustainability and resilience of the Arab insurance sector and specifically in Lebanon, the Levant and the GCC countries?
Joseph Faddoul: The Arab insurance sector has experienced significant growth over the past 20 years, primarily driven by government expenditures in countries like the UAE, Saudi Arabia (KSA), and Qatar. This growth has been further supported by the adoption of compulsory medical insurance schemes in several countries. Additionally, increasing purchasing power and heightened awareness of insurance products have played a crucial role in expanding the sector.
In Lebanon, the insurance sector faced a dramatic decline of nearly 50% in gross written premiums following the 2019 economic crisis. Despite this downturn, the sector demonstrated remarkable resilience and has since stabilized and begun to grow. This resilience can be attributed to insurance being perceived as a fundamental necessity, especially in the wake of the banking crisis, which left many individuals without access to their funds. The growing recognition of the importance of insurance for financial security and protection has contributed to the sector’s recovery and ongoing development.
BL: How ready are the insurance and reinsurance people for the technological advancements in the region in terms of education and training? How is the situation at your esteemed company?
Joseph Faddoul: While technological advancements could impact the insurance business by increasing efficiency and streamlining process optimization, the reinsurance business will be impacted to a lesser extent since the business is heavily based on human/personal relations and on trust; this element cannot be replaced by technology. The success of technology in insurance in the region will also be dependent on the behavior of people and their readiness to trade the human relation they have with their direct broker to an automated process. Digital transformation can help insurers meet new customer expectations and needs by enhancing product development and offering channels.
BL: What are your challenges?
Joseph Faddoul: We operate in a region that presents intense and multifaceted challenges, ranging from political instability to cross-border issues and complex compliance requirements. The reinsurance business is a regulated industry, and in certain regional jurisdictions, obtaining local licenses and approvals is necessary to operate legally.
At COPE, we maintain a focused approach, targeting specific territories as outlined in our initial business plan. However, we remain vigilant and attentive to opportunities in countries where a local presence is essential. Our strategy involves balancing our targeted expansion with a readiness to adapt to the regulatory landscapes of different regions, ensuring that we can effectively and compliantly meet the needs of our clients.
BL: How was the year 2023 in terms of your financials?
Joseph Faddoul: COPE commenced its operations at the end of 2023, so the initial figures are not fully representative of our long-term potential. However, by the end of the second quarter of 2024, we have surpassed our budgeted targets and are very satisfied with our performance. This early success is a testament to our robust business model, strategic planning, and the dedication of our team. We remain optimistic about our growth prospects and are committed to maintaining this positive momentum as we continue to expand our operations and market presence.
BL: What is the current situation and developments on the ground of Cope’s expansion plans?
Joseph Faddoul: The current situation and developments in the expansion plans for COPE involve a comprehensive and strategic approach. Initially, the focus was on securing the necessary licenses and regulatory approvals to operate in targeted markets.
Building strong relationships is a priority, particularly through forming strategic partnerships with local and international insurers. We secured 24 key treaty clients, this is essential to establish a solid client base, often leveraging existing relationships and demonstrating the firm’s unique value proposition.
Recruiting top talent is critical for success. Attracting experienced professionals to build a knowledgeable team.
Integrating advanced technology systems streamlines operations, enhances data analysis, and improves client interactions is COPE unique selling proposition.
Maintaining strict compliance with local and international regulations avoids legal issues and builds a reputation for reliability and trustworthiness. Implementing robust risk management practices identifies and mitigates potential risks associated with expansion and operations.
Building brand awareness through targeted marketing campaigns and participating in industry conferences and events to expose COPE brand and establish market presence.
Continuously refining strategies based on performance data and feedback ensures sustained growth.
COPE has exceeded its budgeted targets in the early stages, indicating a strong start and promising future prospects. High levels of client satisfaction and positive feedback suggest that the firm’s offerings are well-received and valued in the market.
Overall, the expansion plans for COPE involve a multi-faceted approach that positions the firm for continued growth and success in the competitive reinsurance market.
BL: How do you rate the Cope’s spectacular event at BeitMisk and how do you rate COPE’s group attending the 46th Organisation of Eastern and Southern Africa Insurers (OESAI) Annual Conference from August 4-7 at the Elephant Hills Resort, Victoria Falls, Zimbabwe?
Joseph Faddoul: Building brand awareness through targeted marketing campaigns and participation in industry conferences and events helps establish a strong presence and network with potential clients and partners. The market’s response to COPE events, especially our recent one at Beit Misk, has been overwhelmingly positive. This strong market reception underscores our value proposition and competitive edge.
Regarding OESAI, COPE already has a diverse portfolio in Africa across various lines. Our presence at the conference highlights our commitment to exploring Africa as a strategic opportunity for growth. By actively engaging in this region, we demonstrate our dedication to expanding our reach and leveraging the unique opportunities Africa presents.
BL: What are your expectations for the forthcoming RV des Septembre and what are your comments on the various topics that will be tackled during this famous international event?
Joseph Faddoul: We have high expectations for the forthcoming RV de Septembre conference; it is a significant platform for networking, knowledge exchange, and an opportunity for showcasing COPE expertise. Our primary goal is to strengthen our relationships with existing clients and partners while exploring new business opportunities. Additionally, we aim to stay up-to-date of the latest industry trends that can drive our strategic initiatives forward.
Regarding the various topics that will be tackled during this renowned international event, we expect it to be highly informative and beneficial, offering opportunities to enhance our market position and contribute to the broader discourse on the future of reinsurance.
BL: After the recent political events, what changes did you make in your agenda?
Joseph Faddoul: COPE has made several strategic adjustments to ensure continued stability and growth. We have intensified our risk assessment to better anticipate and mitigate the impacts of political instability, including the potential effects on our operations and clients.
To ensure operational continuity, we have developed contingency plans that include remote working capabilities if necessary.
We have reinforced our compliance frameworks to ensure adherence to any new regulations or sanctions arising from the political events.
We are prioritizing transparent and regular communication with our stakeholders to keep them informed about our responses and strategies in light of the political developments.
By implementing these changes, we aim to effectively navigate the current political landscape, safeguarding COPE operations while continuing to deliver value to our clients and stakeholders.
