MENA REN­DEZVOUS TACK­LES TOUGH MAR­KET CON­DI­TIONS

Source: Asia In­surance Re­view, 21 Novem­ber 2012

Insurance - - INDUSTRY UPDATES -

Strate­gies for tough eco­nomic times in an un­der­per­form­ing re­gion were the fo­cus of speak­ers at the 1st MENA Ren­dezvous held in Dubai. Ideas put for­ward in­cluded de­vel­op­ing new rev­enue streams, im­prov­ing pro­fes­sion­al­ism, pro­mot­ing mu­tual un­der­stand­ing be­tween providers and reg­u­la­tors, and fos­ter­ing a re­li­able fi­nan­cial ser­vices sec­tor.

The Sec­re­tary Gen­eral, Emi­rates In­surance As­so­ci­a­tion (EIA), Fa­reed Lutfi ad­vised the in­dus­try to look for rev­enue streams other than rein­sur­ance com­mis­sions to boost their bot­tom lines in the face of shrink­ing profit mar­gins caused by low rates, se­vere com­pe­ti­tion and de­te­ri­o­rat­ing in­vest­ment re­turns. He also urged com­pa­nies to be­come more pro­fes­sional and to give top pri­or­ity to re­assess­ing risk ex­po­sure and risk ac­cu­mu­la­tion.

Lutfi noted that there was un­cer­tainty in the mar­ket as in­sur­ers and rein­sur­ers, and reg­u­la­tors coped with new chal­lenges. He added that op­er­a­tors have with­stood the winds of change with most mar­kets reg­is­ter­ing growth in GWP over the past cou­ple of years. How­ever, the re­gion’s GWP of US$21 bil­lion (RM64.18 bil­lion) re­mains be­low the full po­ten­tial.

Walid Ge­nadry, Pres­i­dent, Arab Fo­rum of In­surance Reg­u­la­tory Com­mis­sions (AFIRC) and Head of the In­surance Con­trol Com­mis­sion, Le­banon em­pha­sised that im­prov­ing mu­tual un­der­stand­ing be­tween providers and reg­u­la­tors is of great sig­nif­i­cance as “we are all in it.” He added that with the reg­u­la­tory regime still rel­a­tively young as it was only in the last ten years that su­per­vi­sion has started to take shape se­ri­ously in MENA, mu­tual un­der­stand­ing was nec­es­sary in or­der to “de­velop a vi­brant and solid in­surance sec­tor.”

De­spite the tough times, Kevin Bir­kett, Man­ag­ing Di­rec­tor, Busi­ness Devel­op­ment, Dubai In­ter­na­tional Fi­nan­cial Cen­tre Author­ity (DIFC), re­marked that MENA re­mains a promis­ing re­gion for the in­dus­try with its young pop­u­la­tion and avail­abil­ity of mas­sive cap­i­tal. Reg­u­la­tors in the re­gion can as­sist the in­dus­try by fos­ter­ing and pro­mot­ing a re­li­able fi­nan­cial ser­vices com­mu­nity.

USD1.00 = RM3.06

(Left) Kevin Bir­kett, Man­ag­ing Di­rec­tor, Busi­ness Devel­op­ment, Dubai In­ter­na­tional Fi­nan­cial Cen­tre Author­ity (DIFC)

Walid Ge­nadry, Pres­i­dent, Arab Fo­rum of In­surance Reg­u­la­tory Com­mis­sions (AFIRC)

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