20 December 2009
With a gross written premium of more than $430 million (Dh1.5 billion) in the GCC, AXA Insurance Gulf is expanding its presence and launching new insurance products in the region. The firm, one of the key players in the region's non-life insurance sector, recently launched its online service allowing customers to buy and renew their motor insurance policies online.
It has also partnered with one of the world's largest takaful and re-takaful group, Salama - Islamic Arab Insurance Company - to offer group life solutions products. And most recently, AXA Insurance Gulf partnered with HSBC to provide cargo insurance to HSBC customers.
Its CEO, Jean-Louis Laurent Josi, believes that a positive business environment in the UAE as well as the GCC presents healthy growth prospects for the insurance sector. There is room for everyone, whether it is takaful insurance companies or conventional insurers, he said.
"While we may not see the same growth rates of the past, I am still positive about the outlook for the region. It has a young and growing population and insurance penetration is still very low," he said.
What are the current challenges and growth prospects for the insurance industry in the UAE?
I see three main challenges in the region. The first one is the way certain companies were making profits. Certain companies did not really care about the technical results and mainly relied on their financial results. Unfortunately, this is a short-term strategy and the current crisis is exacerbating this. A sound company must have profits balanced between technical and financial results so that the company will be more resilient in difficult times. The second challenge I see is related to the number of companies in the GCC. The market is very fragmented with a high number of insurers. For new entrants, there is a risk they will want to increase their market share by decreasing their prices. This could force certain companies, those with no other arguments than the price to sell, to follow them in this vicious and unprofitable circle. At AXA Gulf, we do not want to enter into this vicious circle. We strongly believe that the price is not the only way to differentiate ourselves. Other important elements have to be taken into account when a prospect is in the process of choosing an insurer, such as financial stability of the company and its ability to pay the claims on time; quality of the service; products in line with customers' needs; and risk management knowledge that will support the customers. The third challenge is attracting the right people for the right jobs. Firms are battling to retain or hire the right expertise in order to keep up with their rapidly expanding portfolios. However, this problem has eased somewhat due to more European and American professionals looking for work overseas.
Regarding growth prospects, while we may not see the same growth rates of the past, I am positive about the outlook for the region. It has a young and growing population and insurance penetration is still very low. If you compared the 'premium paid power' per capita in the region, it is five to 20 times lower than in mature countries.
At AXA, the financial crisis was positive for us because it showed the market that it is paramount to have a stable, healthy, solid insurer that is capable and willing to pay its claims.
How has been the impact of the slowdown with regards to the UAE's property sector on AXA Gulf?
In terms of our investments, we were not like certain insurers that massively invested in property to boost short-term their profits. We were, therefore, very cautious so that we did not have to book any material write-offs and impairments due to the property downturn. Regarding the property insurance business, because of the current market condition, it is more challenging than in the past. However, our UAE business is well diversified and the property business represents only a fraction of our business. In other words, the impact on our revenues is there but is limited.
So, what should be the key investment strategies for UAE's insurance companies now?
The insurance business is about the long-term protection of its customers. The investment strategy has to be aligned with that long-term goal: no short-term vision, no gambling on certain equities or markets but rather a strategy to limit the volatility of the investments with very high-quality assets.
What would be the key drivers of growth for the insurance industry in the UAE - is it life, health, motor or property insurance?
AXA Gulf has a clear multi-products approach in order to be able to cover all its customer's needs. Therefore, we will continue to focus on all these lines to maintain the highest standards everywhere.
Is it the takaful or the conventional sector that will take the lead in the country's insurance market recovery?
I do not believe the lead will be taken by either takaful or conventional companies. However, I do believe the lead will be taken by the companies which are able to understand the customers' needs, to give the right quality of service, to have engaged employees onboard and that are financially healthy and solid.
Profile: Jean-Louis Laurent Josi CEO of AXA Insurance Gulf
Josi, 38, was appointed to his present post last year.
He started his career with Assurances Groupe and then moved to Winterthur - Europe Assurances as their Head of Retail Life and Life Product Management.
In 2007,Josi became the head of multi-distribution for AXA Belgium. He has been with AXA ever since.
He studied Master's in administration and management and has a post-graduate degree in actuarial sciences from the Institut d'Aministration et de Gestion in Louvain, Belgium and an MBA from the College of Insurance, New York.
With a gross written premium of more than $430 million (Dh1.5 billion) in the GCC, AXA Insurance Gulf is expanding its presence and launching new insurance products in the region. The firm, one of the key players in the region's non-life insurance sector, recently launched its online service allowing customers to buy and renew their motor insurance policies online.
It has also partnered with one of the world's largest takaful and re-takaful group, Salama - Islamic Arab Insurance Company - to offer group life solutions products. And most recently, AXA Insurance Gulf partnered with HSBC to provide cargo insurance to HSBC customers.
Its CEO, Jean-Louis Laurent Josi, believes that a positive business environment in the UAE as well as the GCC presents healthy growth prospects for the insurance sector. There is room for everyone, whether it is takaful insurance companies or conventional insurers, he said.
"While we may not see the same growth rates of the past, I am still positive about the outlook for the region. It has a young and growing population and insurance penetration is still very low," he said.
What are the current challenges and growth prospects for the insurance industry in the UAE?
I see three main challenges in the region. The first one is the way certain companies were making profits. Certain companies did not really care about the technical results and mainly relied on their financial results. Unfortunately, this is a short-term strategy and the current crisis is exacerbating this. A sound company must have profits balanced between technical and financial results so that the company will be more resilient in difficult times. The second challenge I see is related to the number of companies in the GCC. The market is very fragmented with a high number of insurers. For new entrants, there is a risk they will want to increase their market share by decreasing their prices. This could force certain companies, those with no other arguments than the price to sell, to follow them in this vicious and unprofitable circle. At AXA Gulf, we do not want to enter into this vicious circle. We strongly believe that the price is not the only way to differentiate ourselves. Other important elements have to be taken into account when a prospect is in the process of choosing an insurer, such as financial stability of the company and its ability to pay the claims on time; quality of the service; products in line with customers' needs; and risk management knowledge that will support the customers. The third challenge is attracting the right people for the right jobs. Firms are battling to retain or hire the right expertise in order to keep up with their rapidly expanding portfolios. However, this problem has eased somewhat due to more European and American professionals looking for work overseas.
Regarding growth prospects, while we may not see the same growth rates of the past, I am positive about the outlook for the region. It has a young and growing population and insurance penetration is still very low. If you compared the 'premium paid power' per capita in the region, it is five to 20 times lower than in mature countries.
At AXA, the financial crisis was positive for us because it showed the market that it is paramount to have a stable, healthy, solid insurer that is capable and willing to pay its claims.
How has been the impact of the slowdown with regards to the UAE's property sector on AXA Gulf?
In terms of our investments, we were not like certain insurers that massively invested in property to boost short-term their profits. We were, therefore, very cautious so that we did not have to book any material write-offs and impairments due to the property downturn. Regarding the property insurance business, because of the current market condition, it is more challenging than in the past. However, our UAE business is well diversified and the property business represents only a fraction of our business. In other words, the impact on our revenues is there but is limited.
So, what should be the key investment strategies for UAE's insurance companies now?
The insurance business is about the long-term protection of its customers. The investment strategy has to be aligned with that long-term goal: no short-term vision, no gambling on certain equities or markets but rather a strategy to limit the volatility of the investments with very high-quality assets.
What would be the key drivers of growth for the insurance industry in the UAE - is it life, health, motor or property insurance?
AXA Gulf has a clear multi-products approach in order to be able to cover all its customer's needs. Therefore, we will continue to focus on all these lines to maintain the highest standards everywhere.
Is it the takaful or the conventional sector that will take the lead in the country's insurance market recovery?
I do not believe the lead will be taken by either takaful or conventional companies. However, I do believe the lead will be taken by the companies which are able to understand the customers' needs, to give the right quality of service, to have engaged employees onboard and that are financially healthy and solid.
Profile: Jean-Louis Laurent Josi CEO of AXA Insurance Gulf
Josi, 38, was appointed to his present post last year.
He started his career with Assurances Groupe and then moved to Winterthur - Europe Assurances as their Head of Retail Life and Life Product Management.
In 2007,Josi became the head of multi-distribution for AXA Belgium. He has been with AXA ever since.
He studied Master's in administration and management and has a post-graduate degree in actuarial sciences from the Institut d'Aministration et de Gestion in Louvain, Belgium and an MBA from the College of Insurance, New York.
By Sunil Kumar Singh
© Emirates Business 24/7 2009
