Insurance and reinsurance brokerage Fenchurch Faris celebrates its 30th anniversary this year. Mr Rafat Faris, Chairman of the Executive Committee, traces the company’s growth and looks at what lies ahead.
Since its establishment in 1984 as a joint venture between Mr Basim Faris and Fenchurch plc (now Arthur J. Gallagher), Fenchurch Faris has been expanding steadily. From a single office in Athens, the provider of insurance and reinsurance broking and consulting services for the MENA region has added offices in Amman, Kuwait, Abu Dhabi and Riyadh.
The growth is set to continue with the company expecting to open two more offices by the end of 2014, in Dubai and Al Khobar. “In the long run, Fenchurch Faris has its sights on establishing branches in strategic Arab and non-Arab markets on the African continent,” disclosed Mr Rafat Faris.
In 2013, Fenchurch Faris handled gross written premium of US$118 million, an increase of 25% y-o-y. The majority was from life, personal accident and medical, which together comprised 27% of the total, followed by liability (19%) and engineering (16%). Shareholders’ equity stood at $3 million, a 50% jump over the preceding year.
A leader in casualty solutions
Since 2009, Fenchurch Faris has established itself as a leader in casualty insurance solutions for the MENA region. In 2013, about 20% of total gross written premium was attributed to professional indemnity, third-party liability and medical malpractice.
“Part of our success in this arena can be attributed to a very effective professional indemnity facility with Hannover Re and a general liability facility with QBE,” said Mr Faris. “The company has also made significant strides in workers’ compensation and employers’ liability covers by way of its exclusive binders at Lloyd’s of London.”
“Fenchurch Faris is also directing more emphasis and resources towards political violence insurance, where the need for customised solutions and after-sale service can be critical, and therefore an advantage for a sophisticated broking house,” he added. Political risk products currently constitutes 7% of gross written premium.
Standing out
Fenchurch Faris’ success has been driven by a number of factors, said Mr Faris, including its “unblemished reputation among both suppliers and buyers of insurance capacity”. This, he added, “can partly be attributed to the cautionary personality of the company’s founder and the corporate culture which he shaped and influenced, as well as strict adherence to the company’s corporate values.”
Fenchurch Faris also takes pride in its Lloyd’s coverholder status, robust after-sales service based on its partnership approach with clients and proactive approach in customising products across different business lines.
The company counts some of the MENA region’s most prominent companies as shareholders and partners. “This falls in line with Fenchurch Faris’ belief that long-term contractual relationships benefit the broker by guaranteeing a steady stream of captive and qualitative business, and benefit their partners by providing their businesses with specialised services, risk management expertise and premium rebates.”
Cultivating talent
With more than 100 employees, Fenchurch Faris considers its people to be its biggest single asset. “We place a strong emphasis on employee education and training, including mandatory completion of an in-house course on the major principles and practices of insurance, presided over by a Chartered Insurance Professional (CIP). This is supplemented by a company-funded programme assisting employees in their completion of the ACII programme at the Chartered Insurance Institute in London,” noted Mr Faris.
In addition, employees participate yearly at seminars in Zurich, Munich or London according to their specialisation. There is also an equity participation programme for senior managers.
“Over the next few years, our goal is to establish Fenchurch Faris as an educator of insurance talent in the region. We plan to cultivate and enhance this initiative by placing ourselves at the forefront of the educational circuit, be it by organising seminars, sponsoring major conferences or arranging debates on the most relevant insurance issues of the day,” said Mr Faris.
Corporate governance
Fenchurch Faris recently established an Executive Committee, comprising senior management. “One of its objectives is to ensure that effective and stringent internal controls are in place and that management information systems enable the company to conduct its activities both lawfully and ethically.
“The company has also put in place a Securities Committee, which has the primary task of periodically evaluating the insurance and reinsurance companies with which we do business, to ensure that they meet our own minimum requirements and the regulatory requirements of different territories in which we do business.”
Insurance broking in the future
Brokers will play a more vital role in the insurance industry going forward, said Mr Faris. “In the past, insurance brokers have helped clients make intelligent insurance decisions and contributed to increased industry transparency and the stimulation of competition in the marketplace. They have also used their bargaining power to elevate the buyer of insurance to a more symmetric footing with the seller of insurance. The importance of this role will continue into the future.
“However, the insurance broker of the future should be equipped to deal with the challenges that come with new technologies, increased political risk exposures, rising insurance penetration and an ever-expanding demand for energy insurance in the Middle East and Africa. Hence, the future of the broker, to a large degree, lies in risk management and consulting.”