Insurers must keep pace with technological changes

The recent unfavourable events that occurred in some Arab countries have proven that crises and challenges can only be overcome through national will, joint effort and the cooperation of all players in order to achieve Arab integration, said Mr Abdul Khaliq Raouf Khalil, secretary general of GAIF, opening the 32nd General Conference in Hammamet, Tunisia, yesterday. After these stressful times, he expects the markets to rebound, paving the way for a phase of innovation.

Mr Khalil said technology is changing how the world works and digital revolution is the challenge of the day. Nevertheless, every challenge is an opportunity for growth. But it will require insurers to organise and enhance market practices, introduce innovative products and adopt unconventional methods. Technological advancement is accelerating the pace of change, he said.

Overall, Arab insurers and reinsurers have been able to protect their businesses by revising and modernising their business strategies, benefiting from international and regional experiences, Mr Khalil said. “This has helped preserve a positive growth trend in terms of the quality and size of businesses that has kept Arab insurance markets attractive.”

(L-R): Messrs Lassaad Zarrouk, President of Fédération Tunisienne des Sociétés d’Assurances (FTUSA) and President of the Organising Committee; Max Zaccar, President of Association des Compagnies d’Assurances au Liban (The Association of Insurance Companies in Lebanon or ACAL); Mohamed Ridha Chalghoum, Minister of Finance, Tunisia; Abdul Khaliq Raouf Khalil, Secretary General, GAIF; and Mrs Lamia Ben Mahmoud, Chairperson & CEO of Tunis Re

Change or die

Mr Lassaad Zarrouk, president of FTUSA and the organising committee of the 32nd General Conference, said the theme of this year’s conference reflects the challenges Arab markets are facing.

Digital transformation, or the Fourth Industrial Revolution, is an intellectual and cultural leap. Therefore, insurers need to change their conventional modus operandi when dealing with clients, he said, urging insurers to take advantage of emerging technologies such as AI, said Mr Zarrouk.

Transformation brings about benefits, but it will require insurers to change their strategies and such changes should be implemented before it is too late. At the same time, he commended GAIF’s strength and affirmed its ability to support the industry to overcome the challenges it faces.

Outgoing GAIF president Max Zaccar said that with its 350 members, GAIF is the largest insurance federation in the world. He said GAIF is going through serious reforms and its Board has decided to gradually adopt a stronger corporate governance strategy for its managerial departments. “To implement this, we have started the process of establishing an internal audit committee which will enable us to analyse the financial capability of the Federation and the need to bring in new manpower to lead GAIF into the future.” Mr Zaccar said the 32nd term of GAIF’s presidency, headed by Tunisia, will see the forging of a future strategy after deliberation with members.

Insurance industry lagging behind

Mr Mohamed Ridha Chalghoum, Tunisia’s minister of finance said the insurance industry should learn from the experiences of other industries like banking and telecommunications as they have adapted to technological changes. These industries have used technology to reach out to greater masses, expand businesses and respond to their clients swiftly, he added, pointing out that Arab insurers lag behind when it comes to exploiting technology.

Mr Chalghoum challenged insurers to adopt new strategies, create new channels of distribution and find innovative means to settle claims and serve clients to keep pace with the technological transformation.

With its theme of “Digital Transformation and the Insurance Industry in the Arab World”, this year’s GAIF conference in Tunisia attracted over 1,400 participants from 51 countries.

Consumer behaviour driving industry transformation

Mr Jalloul Ayed

Technology has permanently changed the insurance industry over the last decade, said Mr Jalloul Ayed, chairman of VEGA Group, Tunisia, at the first conference session which touched on digitalisation transition in the world.

Customers are at the forefront of the insurance business in the digital age and the industry is expected to shift from being product-focused to being customer-focused, said the former minister of finance. Insurers can no longer compete based on price and product alone.

Consumer behaviour has changed and that is the fundamental difference between the past and the present, said Dr Winfried Heinen, chairman of Gen Re. He cited the MEcosystem, coined by Interbrand, whereby customers are at the centre of the ecosystem and everything else revolves around them. Dr Heinen said that the MEcosystem model is characterised by three things: easy access, transparency and customer-centric offering.

Dr Winfred Heinen

Reduced barriers to insurance purchase and a more efficient underwriting process will improve the customer journey, he said. When it comes to transparency, insurers should make customers understand the product and the protection it offers to gain customers’ trust.

Insurers can also leverage data and analytics to tailor products and engage customers throughout the policy period – acting as a ‘life enabler’. Dr Heinen said for insurers to adapt to the new customer environment, they will need to establish continuous contact with the customer to gain trust and give them a positive, rewarding feeling.

5th Middle East Insurance Industry Awards: Self-nominations still open

The search is on for this year's most outstanding individuals and organisations in the Middle East insurance industry. The 5th annual Middle East Insurance Industry Awards (MIIA) include two new categories: the Corporate Social Responsibility (CSR) Award and the Digital Insurer of the Year.

Organised by Middle East Insurance Review, the Awards aim to boost standards and promote greater professionalism in the market.

To encourage companies to know their own self-worth and competitive strengths, we encourage you to nominate yourself or your own company. Make your nominations by 12 July. The winners will be announced at the Awards Presentation Gala Dinner on 26 November in Dubai.

Categories

Life Insurance Company of the Year
General Insurance Company of the Year
Health Insurance Company of the Year
TPA of the Year
Takaful Company of the Year
Educational & Training Initiative of the Year
Innovation of the Year
Service Provider of the Year
Corporate Risk Manager of the Year
Law Firm of the Year
Broker of the Year
Reinsurance Broker of the Year
Retakaful Company of the Year
Reinsurance Company of the Year
Corporate Social Responsibility Award
Digital Insurer of the Year
Personality of the Year

To nominate or book tables at the gala dinner, visit MEIR Awards 2018 Website

An eye on technology

As emerging technologies become more integrated into the insurance industry globally, insurers in MENA need to understand the impact this trend could have on their business and respond accordingly. Some industry players weigh in on the topic.

Mr A R Srinivasan

AI and IoT will slowly but surely replace the traditional way of doing business, especially in underwriting, actuarial and sales. Call centre jobs are likely to be replaced by chatbots. It’s difficult to predict how soon it will affect the industry in MENA.

The region is struggling to create more jobs (for locals), especially with a very large youth population. The need to create more jobs works in opposition to loss of jobs due to AI and IoT. The need of the hour is to create new competencies to meet the new work requirements, due to the changing work and business landscape.

But what are these ‘new work competencies’?

Mr A R Srinivasan,
CEO,
Arabia Falcon Insurance Company SAOG

Mr Fateh Bekdache

The digitalisation of the insurance industry benefits both the company and the insured. Service is enhanced, availability is increased, access to information is easier and transparency is privileged.

The relationship with insurers will be more convenient and flexible and that is what today’s clients are asking for, especially the Millennials and Gen Z.

In today’s fast-paced lives where paper is almost vanishing and people are hooked on their smartphones, the industry cannot refrain from transforming. Insurers should start investing in developing their infrastructure and team up with InsurTech companies. AROPE introduced digital into our business model in 2012. Our latest innovation is TEMA, a mobile application designed for traffic experts and based on the ‘uberisation’ geolocation system.

Mr Fateh Bekdache,
Vice Chairman & General Manager,
AROPE Insurance SAL

Mr Sunnie Luthra

The rise of new technologies is inevitable and is a matter of ‘when’ and not ‘if’. Unlike Europe and the US, MENA is quite unique with different markets at different stages of evolution. Some markets will take a lead in the innovation journey, however given the speed at which innovation diffuses (mobile phones are a classic example), it will not be surprising to see the whole region embracing the technologies rapidly. At IGI, our investments in new technology have already started showing excellent returns by empowering our employees, improving efficiencies and delivering more granular and dynamic insights into the drivers of our business.

Mr Sunnie Luthra,
Risk and Capital Actuary,
International General Insurance (IGI)

Mr Ata Khatib

The MENA insurance industry is lagging behind with the application of new technologies, and we are not yet seeing the impact or change witnessed in other parts of the world such as in the US and Europe. If we consider the penetration of microinsurance in the region (0.3%) versus mobile penetration in some parts of the region (90%+), this clearly demonstrates the potential the use of new technologies can have on the MENA insurance industry.

Telenor India, a major telecom operator, adapted the idea in 2015 for a country where 93% of the population were uninsured. Within just a few months, microinsurance was adopted by 20m customers that owned smartphones but had no access to affordable insurance.

Mr Ata Khatib,
Deputy CEO,
Lockton (MENA)

Dr Frank Mayer

In the Middle East like elsewhere, technologies such as AI, machine learning and smart data are shaking up the current business models, creating shifts in the way we are transforming and remodelling the insurance industry. Like other industries, the insurance sector will change significantly over the coming years and the winners will be those who can adapt and harness these new opportunities. The insurance industry has accelerated its activities to seize the opportunities offered by new technologies. The digital imperative has been accepted since digitalisation promises additional revenue from new business fields, as well as innovative business models. However, implementation remains a challenging task.

Dr Frank Mayer,
Senior Executive Officer,
Munich Re Underwriting Agents (DIFC)

Paul Klee’s love affair with Tunisia

‘Municipal Jewel’

Swiss German artist Paul Klee visited Tunisia in 1914 and was immediately swept away by its beauty. The light of North Africa aroused in him a sense of colour. His brief sojourn in Tunis, Hammamet and Kairouan was the turning point in his life and career – nudging him on the path towards abstraction.

‘Hammamet with Its Mosque’

In the coastal town of Hammamet, Klee was dazzled by the brilliant hues that formed the backdrop of the vibrant local lifestyle. His watercolour painting of ‘Hammamet with Its Mosque’ consists of representational as well as non-representational elements – the upper part shows the mosque surrounded by two towers and gardens, while the lower area is made up of translucent colour panes.

In ‘Garden in Saint-Germain, the European Quarter of Tunis’, Klee portrayed the scenery in a grid, blending colours harmoniously.

‘Garden in Saint-Germain, the European Quarter of Tunis’

The two-week stay in Tunisia continued to inspire Klee for many years. ‘Municipal Jewel’ was probably one of the first works that Klee was able to paint while working as a clerk at the Royal Bavarian Flying School in Gersthofen, Germany during World War I. The small, translucent geometric forms in the painting, surrounded by sombre larger ones, give the effect of a big crystal shimmering in darkness.

Cocktails & Canapés

The first day of the conference rounded off with another cocktail reception, this time hosted by the Tunisian Federation of Insurance Companies (FTUSA) at the Golden Tulip Taj Sultan Hotel located by the beach.