How’s business? Most want to say quickly: “It’s getting back to almost normal”. Some are optimistic, counting on the resilience of the marketplace, yet others fear disruption with many clients going bust and debts rising.
There are no real guides and one moves with one’s own risk appetite, capital comforts and client demands which can be met.
On the good news front, we note that despite many reinsurers purportedly leaving the DIFC, reinsurance business there hit almost $2bn in 2019, showing a healthy 17% jump. And now rates are said to be hardening.
The big question is still whether business interrupted by the COVID-19 lockdown is covered if there was no physical damage. Lloyd’s has launched a product for just that in July.
The pandemic still rages on with some becoming resigned to living with the enemy. The global death rate is seen as only 600,000 even with 12m infected, and most sent home cured. No one knows how soon the vaccine will arrive.
But on the safe side, GAIF has postponed its general conference, originally scheduled in October in Algeria, until 2021. The East Asian Insurance Congress, originally set for August in South Korea, is now rescheduled to 2022.
Even in the pandemic, the constant reminder is to save the earth. Global warming attributed to man’s use and abuse of the earth is seen by many geo-scientists as having gone past the tipping point.
The grounding of planes and lockdowns with fewer cars on the roads for a few months did show clear, blue skies and cleaner air to breathe. Can we extend this beyond the pandemic and build sustainability into the very recovery we crave and need now?
Insurance stands at a critical vantage loft to help businesses understand the huge exposures to climate risks. Can we lead the world in managing the risks? Dare we take up the challenge? Our cover story this month looks at the continuing Nat CAT exposures and makes a call for risk pooling, but this time by perils and geography.
Our country profile is on Lebanon in the midst of a fog with the pound so weak and insurers footing a hefty bill as well. Can the insurers adapt to the new realities and strike a path to just sustain their business? Who can lead the market to a recovery now? Can the players come together to eke out a viable future?
In takaful, we review the IFRS 17 debate to assess if there is a risk transfer or risk sharing solution coming forth from the accounting world.
Looking ahead, we still focus on attracting talent and nurturing the next batch of leaders in insurance.
The entries for the 7th Middle East Insurance Industry Awards do give some hope and promise of a better future. But so much needs to be done as they say man is the only species that cuts the trees to make paper, and use that very paper to publish appeals to save trees. So the future really is about internalising what we preach to others.
Stay safe. Enjoy your work, challenging and heart-wrenching though it is. And find the best way to be effective working from home.
Sivam Subramaniam
Editor-in-chief
Middle East Insurance Review