Despite all challenges across the insurance industry, Dana Insurance company – Iran, has been able to increase its market share through hard work and perseverance. Dr. Reza Jafari, Managing Director of the company, highlighted the multiple adversities the insurance market faced during the past year, and cyber risk, Natural catastrophes and inflation may be the most important ones. On the other hand, Dr. Reza indicated the prominent role that the digital transformation and AI are playing in the insurance sector which is heading towards new opportunities in the future.
* How do you evaluate the state of the insurance sector during the year 2023 globally, regionally and locally?
After studying and tracing various reports and statistics of the insurance industry and financial markets, we conclude that the global insurance industry has faced pressure from high inflation and cyber risk which represents a critical issue for the insurance industry where cyber-crimes are incredibly lucrative. Furthermore, social risk, insurance innovations, sales process are going to be easier and international competition will grow increasingly.
Regionally and locally, the insurance industry faces rapid digital transformation whereas insurance companies are making huge investments in IT. We expect more product differentiation, with products’ and features’ innovation to be introduced in to the market and we expect Regulatory changes to regulate companies’ solvency level. Moreover, it is predicted for premium shares, especially in the field of life insurance, to witness a high growth.
* Do you think that non-traditional insurance lines (global warming, natural disasters, cyber insurance …) have become part of general insurance in the Arab region? What is the ability of local insurance companies to provide it?
Absolutely yes, but the increased frequency and severity of natural disasters associated with climate change can make it more difficult for insurers to predict accurately the likelihood of future losses and to price appropriately insurance products. It is expected from regulators to re-assess the requirements feasibility of the requirements of the standard formula regarding natural catastrophe risk.
Cyber risk is one of the prominent issues facing businesses today, and, it is no surprise that cyber insurance is becoming one of the fastest-growing insurance products in the global market even in the Arab region. Consequently, it is expected from regulators to increase attention on systematic cyber risks in the future.
In addition, to know the possible risks, analyze previous data and design appropriate insurance products, companies should also meet their needs (financial basis, increasing analysis tools …) in order to respond promptly to customers’ needs.
* What are the reasons behind the failure of attempts to merge insurance companies in the Arab region?
Recently, the number of mergers and acquisitions attempts in the insurance industry across the Arab region has increased, yet no deal has been successfully completed. I try to state the reasons and managerial behaviors that lead to the frequent failure of M&A in the field of insurance. M&A can take place in different forms, depending on the strategies between the parties involved. This will lead to growth, synergy, managerial efficiency, market-entry, diversification, Increasing value to shareholders… Many challenges face the process of M&A such as overestimating synergies, inadequate due diligence, overpaying, targeting the wrong company, poor evaluation, unexpected costs, employee retention, lack of transparency, culture mismatch, lack of strategic plan, regulatory issues, lack of management involvement, underestimating small details, etc.
* Artificial intelligence has become one of the main features at work in the insurance industry due to its prominent role in improving customer service and increasing efficiency and productivity…
– How do you view this role?
Artificial intelligence will deliver benefits and opportunities for the insurance value chain in the near future. It will have an impact on insurance value chain including product management, marketing, sales and distribution, underwriting and risk management, policy acquisition and servicing, claims management and finance and accounts. It has a huge impact on the actuarial process, product pricing, market research and analysis, market promotion, account & contract management, risk analysis, risk monitoring, contracts and portfolio management, claims validation, claims assessments, claims adjudication, fraud management, statement preparation and remittance processing. AI is not a magic bullet that can solve all companies’ problems, yet, AI use will continue to grow and become more widespread in the industry. As its use continue to expand, insurers will be able to leverage this advanced technology to unlock further growth opportunities and meet the evolving needs of the modern marketplace.
* What about your company’s achievement for the year 2023? What are your aspirations for the year 2024?
Dana Insurance has been able to increase its market share through hard work and perseverance. Also, it has reached profitability and sharp investments’ increase, therefore we took advantage of a unique investment opportunity. The company’s solvency level has grown and we seek to increase shareholders’ profit share while maintaining profitability by tapping into new insurance methods, digitizing processes, increasing market share, changing portfolio composition and moving towards diverse economic portfolios, qualitative and quantitative development of sales network, benefit from the potential of new and overseas market, increasing the quality of customer service and designing new products. We intend to launch more cutting-edge products and services, invest in research and development and diversify insurance products for different groups, especially in Takaful insurance.
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