The best way to get the best information about the insurance and reinsurance industry was to conduct an interview with Riyad Karray. In his profound observations on Best Re, Riyad Karray, General Manager of Best Re started by shedding some light on his company’s latest projects and performance. Then he moved on to speak about Best Re operations in the region, in Lebanon, Tunis and others countries. As the United States unemployment rate inches towards double digits, more Americans are left without health insurance and are looking forward for affordable alternatives. Karray also gave his opinion on the AIG debacle, and the state of the insurance business in Dubai.
Karray started by shedding some light on his company’s latest projects and performance, saying "We closed our accounts in December 2008, which has been a very interesting year. However, we managed to make a profit of US$10 million, on a gross income of 200 million. We have been steadily growing but we are mainly focusing on our underwriting results. Last year, even though we have been affected by the crisis and its fallout on investments, we managed to limit that to a very constraint level and managed to accomplish one of the best underwriting results ever for Best Re." This means that the foundation and Best Re’s core business are fine and sound and "we will continue this strategy in the next few years." There has not been any major change in Best Re’s structure, other than opening a representative office in China. Best Re has also five other offices: Malaysia, Algeria, Senegal, Tunisia, Istanbul and Beirut and it is worth noting that Malaysia is one of the major offices generating around 60% of Best Re’s premiums and has been stable for the last five years. The Middle East market has been very competitive, especially in the UAE, with a very low margin compared to the risks involved. "But we have been witnessing a progress in the market, not a major shift though, but a good readjustment. As Best Re, we have been very conservative as the rate has not been adequate at the time, but now we could get more involved in these markets. Finally, we changed our shareholders to SALAMA Group and we are trying to streamline our logo and name with that of SALAMA Group, having the same colors, mission and vision."
Concerning the AIG debacle Riyad Karray explained that the portfolio of AIG was a good one; the problem comes from a small line of business which affected the whole company. And this small line was controlled by a small number of staff based in London and it affected the whole company. The Business model of AIG was and is still a good one.
In a move to UAE insurance market, Karray explained that the premiums have not been affected; only the investments side of business. "Now we are facing a recession and business is slowing down and we will have to be careful because in recession, insurance is less important to companies and there is a greater moral hazard. Therefore, companies will prefer to pay less and less for more services and more insurance coverage," he added.
Then Karray moved on to speak about Best Re operations in the region, In Lebanon, Tunis and others countries "So far we are quite happy of our operations in Lebanon, as we choose it for historical reasons. Our office in Lebanon covers all the Middle East and the GCC. We are currently trying to work more in Lebanon as the market is still fragmented due to the presence of many companies but its fundamentals are much better than in the GCC where market suffers from increased capacity." The markets of morocco and Algeria are very important and have a lot of potential, and Tunisia is the smallest one. Companies in those markets are becoming more creative to reach special niche and they are targeting the middle class which forms the majority of their societies, by providing motor, real estate and life insurance. Algeria witnessed a good growth but Karray believes that it could grow at a much faster pace. "We are trying to have a better position in the future in these markets because we know these market and we could help them grow. Therefore, we recently enhanced our offices in Tunis to serve the whole area, with new talented underwriters and officers that will offer better services and new products," Karray concluded.
