Despite the latest challenging environment surrounding the insurance sector regionally and globally, Mr. Labib Nasr, the Chief Executive Officer of ADIR Insurance, confirmed that his company was able to maintain robust growth and profits.
He also discussed in details the importance of technology, the effects of the climate change and the increase in oil prices on the industry in general.
* What are your company’s most significant achievements in ٢٠١٨? And your expectations for ٢٠١٩?
Amid the challenging environment that has made our business targets harder to achieve, and the unfavorable economic atmosphere, where we had to positively adapt to new regulations, higher interest rates and limited loans disbursements, ADIR Insurance has been able to maintain its steady growth and profits.
In ٢٠١٩, ADIR Insurance will focus on:
١. Digitalizing our services to reach and interact with a wider audience, and introduce Business Intelligence models to ease our processes and get prompt and flexible insights on our production/portfolio.
٢. Cut cost by eliminating unnecessary expenses and prioritizing our activities.
٣. Improve Productivity and Process Performance with the re-enforcement of the Sales Force, introduction of new innovative products and enhancement of existing ones.
٤. Make the customer experience enjoyable, simple and convenience through Customer Centricity.
* How can you summarize the latest changes and developments in the insurance sector globally, regionally and locally?
Global Level
The new Cloud Technology is taking part in the Insurance and Banking sectors. More and more core business capabilities are likely to move into the Cloud. Insurers are already leveraging cloud applications for core operational activities.
In the US, many insurers had their claims systems fully deployed in the Cloud. Given this trend, Technology Vendors are likely to increasingly direct their investments to develop innovative Cloud-based alternatives, which should encourage more insurers to look to the Cloud first when replacing on-site systems and adding new functionalities, such a artificial intelligence.
These drivers should result in shifting core system capabilities to the Cloud in a bigger way, even if they start opting for a Cloud first strategy for new smart phones applications.
Regional Level
If we look into the Mena Region, Insurtech and Aggregators are well established in the U.A.E. and are influencing traditional insurance practices. Digitalizing the Insurance Industry is going the extra mile with full-fledged insurance solutions, digital underwriting and on-line Claims assistance.
With the help of Aggregators, Insurers are now obliged to position themselves among other competitors on-line, publish their rates, premiums and coverage while consumers can have a full view on the Insurers’ offering, select the company of their choice, and issue their insurance on-line with no need to visit or contact the insurer.
In a middle of such a new practice, Insurers are forced to interact with their clients through well-developed mobile applications while following their daily habits, consuming behavior and health activities to gain their loyalty. Moreover, Insurers are also providing consultancy and special offering for their clients through simple customized pop-up messages on the smart phones.
Local Level
We are still in the process of digitalizing the Insurance Offering and Services. Other Industries have outlasted the Insurance Sector such as Banking, Food and Beverage, Clothing… with mobile applications that can generate leads and close businesses. Insurance is now following but still needs further enhancements especially on the e-insurance level. Moreover, Cloud Technology is not fully explored yet and we need further development.
Getting most of Cloud is still under study where few Banks are adopting it, but surely such technology will likely require serious planning, management and upskilling. Not to forget that the benefits of Cloud are mainly cost savings, flexibility and speed.
* Technology is an essential component of strengthening, growing, developing and modernizing of the insurance sector… How do you keep up with its development?
Technology is essential for development; this is a true statement. But in our situation where recession is gaining ground, it is essential to remain prudent and maintain ADIR’s growth momentum by focusing on:
– Improving operational efficiency (retain clients through our call center & customer service).
– Boosting productivity (through various distribution channels: Brokers, Agents and Sales Team).
– Lowering costs with implementation of new technologies, while customizing products and services to meet the evolving demands of the emerging digital economy (especially millennials).
We need to be aware that technology should be also controlled and monitored, since we are witnessing frequent cyberattacks and Insurers are trying to build suitable coverage for such malpractice.
At ADIR, we have launched our new modernized and responsive website along with a well studied penetration on the Social Media Channels (i.e. Facebook, LinkedIn and Instagram). Our aim is to engage and interact with our followers and likers as organically as it can be.
* 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?
Unlike any other Industry, Insurance pricing practice is mainly driven by Risks Assessment and Claims Payment. Whenever the risk is high and claims are recurrent, the premium will increase consequently.
There is no doubt that in many Arab Countries, the weather has made tremendous damages (Saudi Arabia – Qatar) that led into a slight increase of insurance premiums especially for property and car insurance where Re-insurers had to bear higher risks and increased their rates, which left Insurers with no choice but to reconsider their deductibles and limitations on coverage. Anyhow, in any circumstance, Insurers must always respond to the markets’ needs and wants.
ADIR for instance, has included the Act of God on its All Risks Motor Policies as from ٢٠١٧.
* How does the increase in oil prices in global markets effect the insurance sector in the Arab world?
Yesteryear, the decrease in oil prices ($٣٠ a barrel) affected negatively the sector where Insurance became a real casualty of the oil price crash, with postponements and cancellations of energy projects forcing down premium rates and income, in a market that was very busy and crowded.
However, the increase in oil prices can bring a positive impact on the Arab Insurance Sector. Global marine insurance premiums will increase, Vessel values will be considerable where Hull market will surely flourish.
