Wadih Hardini, General Manager, Chedid Re UAE • Interview

Wadih Hardini

GENERAL MANAGER, CHEDID RE UAE

How do you intend to increase awareness about takaful products? How does Dar Al Takaful fit in this landscape?

There needs to be greater awareness about insurance in general in this part of the world, both takaful and conventional. Although some countries in the region, such as the UAE, Saudi Arabia, and Kuwait, have a high percentage of their GDP as insurance premiums, when we take out the contributions of the mega industries, such as petroleum refineries and aluminum smelters, there are hardly any other premiums. There are almost no personalized premiums here when compared with Europe or North America. In these markets, consumers set aside some money every month for retirement as well as household, car, and medical insurance. Here, people do not have savings or allocate money for insurance. General awareness about insurance has to grow, and, within that, awareness of takaful needs to increase. The concept of takaful, or the mutual sharing of risk, is the very basis that all insurance was originally built upon. Instead of a premium, takaful is based on a fixed amount we call a contribution, taken from the policyholders we pool. We then manage this money. Logically, at the end of the year, if the pool is in profit, we will give part of it back to the policyholders. Unfortunately, returns are not strong. We have to compete with the conventional insurance companies in terms of rates. There is an oversupply of insurance companies, so the rates are down. That leaves little margin for profit to be built up and returned.

What makes Dar Al Takaful stand out in this very competitive insurance landscape?

We have sought to differentiate our services by making them more personal and having an understanding of the customers’ needs. We put the customer first. In the event one of our customers has a loss, due to a fire, for instance, we try to work out what that client needs to be able to get back on their feet and start their business again. That is the approach we take. Dar Al Takaful is one of the 12 participating insurance companies allowed to offer the basic compulsory insurance for low-paid workers. Everyone is competing in the compulsory insurance lines for motor and medical because there is not much awareness. People have little disposable income left to take up other insurance products. There is little business outside of these two insurance lines for vehicles and health. Medical and motor make up more than 70% of the premiums in the personal insurance sector in Dubai today. You can look at creating a niche product, but anything new you create has a shelf life of about 24 hours. It will immediately be replicated by the rest of the insurance market. And there is little incentive to be creative, as there is not much demand. If there was enough margin, you could work with low volumes. But Dubai is different from countries like India or Malaysia, where there is a huge burgeoning middle class.

This is the same question we debated at our last board meeting. We decided to update the current vision, mission, and strategy. We are involving the entire company because we want each of our 150 employees to live and breathe our new mission and vision. Based on this new strategy, we will develop our financial predictions for the next three years.

We drill those back into KPIs that apply to all of us. Broadly speaking, we do not want to be number one in overall premiums; we want to be the go-to insurance company and takaful provider. People should come to Dar Al Takaful saying, “We have heard good things about you. You treat your customers well.” At the same time, we should produce reasonable returns for our shareholders and employees to stay happy. ✖