The greater purpose of insurance, the dynamic use of economic capital models, the need to build and protect reputation, getting CEOs to become strategic, the impact of CEOs on the rating process, and better serving the needs of the MENA insurance market were some of the key issues discussed at the 4th Annual Strategic Seminar of the MENA Insurance CEO Club (MICC) in Istanbul last October.
The Strategic Seminar, normally restricted to MICC members, was this time open to up-and-coming executives as part of the Club’s attempts to nurture young talent. The winner of the 2nd MICC Essay Contest, Mr Cyril George of Vision Insurance, Oman also presented his findings on Climate Change and its impact on the MENA markets to the august body of CEOs.
Ms Serap Oguz Gonulal, Senior Financial Sector Specialist with the World Bank, set the tone for the seminar as keynote speaker, looking at how far insurance has come and how much further the journey is in today’s sophisticated world with increasing risks. Noting the social and noble aspirations of insurance which were irreplaceable by any industry, she stressed the need for data, without which there cannot be any premiums.
In her view, active public-private sector partnership is the way forward, with compulsory insurance and realistic pricing being real solutions in areas affecting large sectors of the economy and people. The secret lies in being efficient and responsive to claims, providing appropriate compensation for the risk assumed.
The MICC was also briefed on the dynamics of the unique Turkish Catastrophe Insurance Pool (TCIP), one of the world’s leading CAT Pools launched in 2000 after the 1999 earthquake that ravaged the city. Mr Ismet Gungor, Co-ordinator of the Pool said CAT Management does not start with commercial feasibility but out of necessity. Milli Re, which hosted the MICC at their premises, also explained their unique role in serving the Turkish market.
Dr Shaun Wang, Deputy Secretary General of The Geneva Association, the think tank of the world’s insurance industry, briefed the MICC on the Association’s role in serving the global insurance industry. He also urged the Club to actively consider cooperating with The Geneva Association on joint research of critical importance to the MENA region.
Dr Kai-Uwe Schanz, Chairman of Dr. Schanz, Alms & Company AG, noting that not a single insurer is among the world’s top 40 brands, said brand management was becoming a strategic challenge because of the increasing number of different stakeholders involved, from customers and employees to rating agencies and investors.
Mr Safder Jaffer, Managing Director, Middle East & Africa with Milliman, in explaining the growing use of the economic capital model (ECM) to optimise return on capital, said the ECM will help CEOs manage risks intelligently, noting that without risk there is no reward.
Mr Fady Khayatt, Partner with Oliver Wyman, challenged CEOs to consider if they were getting in the way of business.
Briefing the MICC members on the findings of an Oliver Wyman study, he said a clear view of which business areas and functions can be combined and delegated is critical to enable a more strategic CEO.
Mr Vasilis Katsipis, General Manager, Market Development for South & Central Asia with A.M. Best, shared insights on the ratings process, adding that if CEOs were open about companies’ weaknesses and focussed on improving these areas, this would improve long-term rating prospects.
The MICC, now into its fourth year of operations, has in this short span hosted two important conferences for the insurance professionals in the MENA region on Political Risks and Social Media, launched an annual essay competition to enhance the storehouse of knowledge and research, and sponsored training stints for young professionals. It has also held regular meetings for CEOs to debate and discuss issues of importance to them and released a joint research paper on the Future of MENA Insurance Markets with Oliver Wyman.