In this interview with Al Morakeb Al Ta’mini magazine, we discussed with Mr. Philip Philip, CEO of Muscat Insurance company, the importance of the new technology trends and applying them in every company’s work. He also explained the IFRS 17 standard and the ways to implement it. And at the end of this interview he highlighted the main achievements OF MIC during 2019.
*The new accounting standard, IFRS 17, is facing the Insurance Sector globally and regionally…
Are there any specific drawbacks and observations about this new standard?
As a company, where are you from applying it?
IFRS 17 impacts financial systems and processes, as well as processes and products associated with various elements of HR’s value chain. Overarching processes such as IT, Accounting and Controlling are also affected, various points of view, interests and consequences need to be considered.
Business areas affected by IFRS 17 impacts along the entire value chain such as product management, asset management, marketing, sales/distribution, underwriting/risk management, policy administration and claims management.
MIC completed phase 1 of implementation which is evaluation stage regarding the gap analysis in respect of financial and operational impact of implementation of IFRS 17 instead of IFRS 4.
*Technology has strongly invaded the Insurance world, as well as other service and production sectors.
What are the new transformations that the technology brought into this sector?
Digital Transformation in Insurance can be wide-ranging, like, adding digital tools to improve existing processes or completely re-inventing the process to be more customer-centric, cost-efficient and operational excellence. It’s always important to see, what we want to achieve to make the most out of the digital transformation investment, be it the cost or effort.
Digital transformation has vast scope in the Robotic Process Automation (RPA) & Bigdata and predictive Analytics. RPA automates the mundane routine task of the Insurance Industry and thus reduces the workload and cost of operations and also saves time, money, and improves customer satisfaction, similarly big data and advanced analytics can help to manage, analyze, and understand data, and make forecasts.
There are many ways for insurance companies to employ digital transformation; some are building in-house capabilities by upgrading or replacing their internal core business applications and platforms. This can be very expensive and time-consuming but is ultimately the way to modernize the business technology without relying on third parties indefinitely.
*Do you think that the difficult economic conditions coupled with several financial, technological and technical challenges may lead to Mergers between Insurance companies in the region? And the withdrawal of some of the markets?
Insurance industry is not immune to any economic difficulties. Every insurance company is currently facing that situation, though it is not to the level of 2008. I will not be surprised if some mergers consolidations happens in the region
*While reinsurance companies are talking about the return of price increases and the tightening in the conditions…. The regional markets are witnessing fierce competition that leads often to a decline in prices…
What’s your opinion in this regard?
There have been catastrophic events across the world both natural and manmade and reinsurers have had exposures paying claims. This has led to increased retrocession prices for Reinsurers and adds additional cost, leading to price increase and what is known as market hardening.
The insurers have capacity to compete in SME segment businesses in the region. Due to lack of expected growth in the economy and higher expectation of portfolio growth among insurers, there has been fierce competition to retain the renewals and add new business. The Clients are price sensitive and have choice this leads to aggressive pricing by Insurance Companies.
*How do you assess the legislations, circulars and laws issued by the relevant regulatory bodies in your country? Does it serve its purpose in promoting the reality of this sector?
Oman insurance industry is well regulated. The Capital Market Authority is doing the best possible to make it more efficient and transparent, ensuring policy holder’s rights are protected.
*What are your company’s achievements in 2019 at all levels?
• Three continuous years full of activities viz. restructuring of the company by merging the two subsidiary companies (MIC & MLAC) into the parent company MNHC SAOG and changing MNHC’s articles of association to include Life & General Insurance into its activities. MNHC SAOG was subsequently renamed as MIC SAOG.
• Company’s branch network increased from 14 to 22 whereby creating more job opportunities for Omani youth. Currently we have 180 employees with 82% Omanisation rate
• Company’s rebranding was done in 2018 with new logo, brand guidelines and look, Company was awarded with Best Branding Innovation of the year by Oman Economic Review
• Company was awarded with Best Insurance Company of the year 2019 by Al Roya in coordination with Oman Chamber of Commerce
• Constructed an iconic landmark tower on the main highway and relocated company HQ into the MIC Tower
