Joane Tabet, the Operations Manager in United Assurance co. SAL, explained how the insurance authorities and legislative bodies are helping the sector improve, develop and modernize its performance. She also emphasized on the technology role and importance, and talked about United’s most recent achievements and plans
* How can you summarize the latest changes and developments in the insurance sector globally, regionally and locally?
In 2018, the Insurance sector has witnessed many mergers and acquisitions at the global, regional and local levels across all players of the field be it reinsurers, brokers and direct companies.
Market conditions of increased competition and capital levels as well as results from large catastrophe losses suggest a continued consolidation in the insurance sector.
Many profiles have sold, bought or partnered focusing on cost efficiencies and expanding penetration as subject matter of acquisitions. Interest and activity are focused more on the Property & casualty and specialty insurance segments than on Life and health.
However, acquirers in a competitive bid run the increased risk of dilutive rather than accretive acquisitions, particularly when assessing the reserve adequacy of a target company and the potential complications in execution and efficient integration.
This consolidation trend is definitely transforming the playground of the Insurance sector. We are left to question which partnerships will be successful in this fast-changing environment.
* Do you think the official bodies, legislative authorities and regulators are playing the required role in improving, developing and modernizing the performance of the insurance sector in your country?
Official bodies, legislative authorities and regulators have been putting in place a list of requirements to Insurance companies.
The requirements in terms of reporting, the introduction of the new consumer protection measures and the penalties on reserving have all put in place a structure or guideline for insurance companies.
However, due to many factors, the implementation of these practices, especially in the legal system, remains inefficient on a country level and when taking into account the recognition of insurance companies to these new requirements.
* Technology is an essential component of strengthening, growing, developing and modernizing of the insurance sector…
– How do you keep up with its development?
The new century has given rise to different needs and purchasing behavior of younger buyers of insurance, self-driving vehicles, telematics, artificial intelligence and the internet of things.
With so many forces in play, it’s difficult to determine the exact landscape of the new insurance world. But, it’s not too early for insurers to prepare.
In Lebanon, although many colleagues are venturing into the digitization of their sales process for individual insurances and mainly for motor insurance or through the emergence of aggregators’ websites, at United Assurance we are focusing still on digitalizing our service offering to make the experience more enjoyable to our clients and to favor speed of claim settlement.
This project is in motion through several steps of implementation and fine tuning to ease the adaptation of our customer base and to route the allocated budget.
* The Earth is subjected to climatic changes reflected by devastating hurricanes and storms that led to massive losses…
– How does this new reality affect the work of the insurance sector?
2018 has been characterized by many climate catastrophes around the world such as earthquakes, hurricane, wildfires, storms, and this time in Lebanon through extensive hail damages earlier in October.
The combination of related large losses has definitely forced the industry to recalculate and consider putting a price on climate change as the occurrence is certain but the impact is still not quantified; it takes a lot of premiums and margins to account for this increased (un) certainty.
For insurers, these losses have not yet resulted in price increases; just in price adjustments in some areas, based on new modelling techniques.
The flow of capital from mergers and acquisitions, from outside buyers such as finance funds and investors as well as low interest rates have increased competition and are still pushing down property-catastrophe reinsurance prices.
Global warming is occurring but its resulting losses have still not hit the re-insurance industry as a whole.
* How does the increase in oil prices in global markets effect the insurance sector in the Arab world?
The changes in oil prices globally can affect economic growth through cost of production, consumer spending, and exchange rate that is in turn affect international trade.
The Arab World is sensitive to changes in oil prices simply because some member countries are major producers and exporters; in other words, the Arab world would benefit from these increases in prices as their revenues would increase accordingly.
This phenomena will revitalize the Arab world economy and investments which in turn will be coupled with a growth in the Insurance sector on the property and casualty section.
* What are your company's most significant achievements in 2018? And your expectations for 2019?
As a team, we are collectively still working on different internal projects including the digitalization of our service offering to meet our everlasting vision of providing specialized and tailor-made insurance products and services, on a case by case basis, to better serve our clients and to settle claims more effectively.
In this difficult Lebanese economic situation, stability and consolidation remain the main defining factors of wariness or prudence. Being risk-averse and cautious about our every steps is key in guiding our recent developments. Consequently, we benefit from overall stable results for year 2018 in respect of profitability and market share.
As for 2019, we are expecting to finalize and implement our corporate governance structure.
