Policy Q1 2014

22

REVOLUTIONISED FINANCEIssues and trends in the Egyptian insurance market

28 KAMIKAZE STRATEGIESOvercoming ghosts of investments past

40 EXPO AND TRADEThe expected boom off the back of Dubai's win

| Issue 1 Q

1 20

14

FIN

AL LIFELIN

E?

THE VOICE OF MIDDLE EAST INSURANCEVolume 12 Issue 1 – Q1 2014www.policy.ae

Registered in Dubai Media City

A M

edia

ques

tCor

p Pu

blic

atio

n

Can an increase in mergers and acquisitions save the industry from business failures?

FINAL LIFELINE?

01-POL65- COVER.indd 1 1/20/14 3:56 PM

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. Products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Not all products and services are available in every jurisdiction, and insurance coverage is governed by actual policy language. Certain products and services may be provided by independent third parties. Insurance products may be distributed through affiliated or unaffiliated entities.

Excellence and Innovation in Trade Credit Insurance.

AIG is a multiple award winning trade credit insurer. We’re one of the world’s largest trade credit excess of loss insurers and have been underwriting this class of business globally for over 40 years. Our product suite goes well beyond conventional credit insurance and we offer a range of solutions for companies of various sizes.Learn more at www.aig.com

Bring on excellenceBring on innovation

C

M

Y

CM

MY

CY

CMY

K

AIG trade credit policy mag 215x280.pdf 1 8/28/13 2:33 PM

JANUARY - FEBRUARY 2014 I I 03

CONTENTS

06 Global EyeThe latest updates from the international insurance sector, from El Salvador to Italy

08 Regional NewsA keynote insurance briefing from around the region: AXA unveils major brand campaign Dubai announces mandatory health insuranceAPICORP signs deal with ICEICA. M. Best affirms rating of QIC

AXA medical provider app for smartphones New regulations for brokers in UAE

11 AppointmentsDon’t miss our look at who’s up, who’s down and who’s going where

13 London EyeThe latest round-up of news and events, from the unit sale of Direct Line to London’s shari’a-compliant reinsurance capacity

16 Cover StoryPOLICY looks at how an increase in M&A activity can be a saviour against business failures across the industry. With companies struggling in an overcrowded market, could consolidation be an answer?

© C

orbi

s

00-POL65-Contents.indd 3 1/15/14 12:14 PM

04 I I JANUARY - FEBRUARY 2014

22 Country Profile: EgyptPOLICY explores the Egyptian insurance market, and what is being done to improve the financial services of a country poisoned by instability

28 Aggressive investmentPOLICY looks back at the crash of 2008, and explores whether companies have moved away from unsustainable investment strategies of the past

34 Marketing insurancePOLICY asks what makes marketing in insurance different to other industries

40 Expo 2020A report by Euler Hermes on the impact of the recent Expo 2020 win and what it will mean for the industry

46 Qatari health insuranceClyde & Co provides a legal update on the Qatari health insurance scheme, an outlook

on what’s in place and what it means to companies

52 Mandatory health coverDubai’s new scheme is a great leap, but it comes at a cost

56 ClassifiedYour guide to the industry’s insurers, brokers and service providers

58 BogusExtraordinary statistics and the lighter side of the industry

Editorial

Acting Managing Editor Mike Byrne

Journalist Hossam Abougabal

Chief Sub Editor Elizabeth McGlynn

Sub Editor Laura Liddell

Junior Sub Editor Gitanjali Bose

Studio

Art Director Jean-Christopher Nys

Advertising

Associate Director - Product Development

Grace Maroun

[email protected] - Tel: +971 55 6078161

Business Developer

Tousif Ahmed

[email protected] - Tel: +971 55 278 7575

Printed by Gulf Printing Press L.L.C.

Published by Medialeader FZ / MediaquestCorp FZ

Europe: 18 rue de Varize, 75016 Paris, France.

Tel: (33) 01 47 66 46 00 Fax: (33) 01 43 80 73 62

GCC: Dubai Media City, Zee Tower, Office 206, Dubai, UAE.

Tel: (971) 4 391 0760 Fax: (971) 4 390 8737

Lebanon: 9th Floor, Kaline Center, Fouad Chehab boulevard, Sin

El Fil, Beirut.

Tel: (+961) 1 492 801 Fax: (+961) 1 492 801

Founder Yasser Hawari, CO-CEO Alexandre Hawari, CO-CEO Julien Hawari, Managing Director Ayman Haydar, Publisher Nathalie Bontems, Group Finance and Accounting Director Victor Chacko, General Manager – Dotmena Rosy Kachouh, Head of Interactive Media Mohamed Bitar, Creative Director Aziz Kamel, Head of Circulation Harish Raghavan, [email protected], Marketing Shane Danas, [email protected], Tel: + 971 50 32 46 140, K S A G M Walid Ramadan, wal [email protected], Tel: +966 1 41 94 061, Lebanon GM Peggy El-Zir, [email protected], Tel: +961 1 4 92 801, North Africa GM Manuel Dias, [email protected], Tel: +33 1 47 66 4600

Printed at Gulf Printing Press L.L.C.No part of this magazine may be reproduced, stored in a retrieval system or transmitted in any form except by permission. The publisher makes every effort to ensure contents are correct but cannot accept responsibility for errors or omissions. Unsolicited material is submitted to POLICY entirely at the owner’s risk; the publisher accepts no responsibility for loss or damage. With regret, competitions and promotional offers, unless otherwise stated, are not available to readers outside the Middle East. Reproduction in whole or part of any photograph, text or illustration without written permission from the publisher is prohibited. Due care is taken to ensure that the content of POLICY is fully accurate, but the publisher and printer cannot accept liability for errors and omissions.© Mediaquest Corp FZ 2014. ISSN 1990-8288

CONTENTS

00-POL65-Contents.indd 4 1/15/14 12:15 PM


GLOBAL

EYEA snapshot of developments from across the globe

A new insurance product has been launched offering Europe’s top football clubs with the opportunity to insure their players against illness or injury that can affect the clubs’ performances on the field and financial performances off it. A club could protect up to $1.67 million of revenue with the cover. The product – called MAXI – has been created by Avoca Elite Sports (AES) and specialist insurer Hiscox.

The insurance provided by MAXI covers teams against a fall in a player’s agreed transfer value, but also compensates the club for potential lost revenues caused by that player’s absence from the team. Clubs’ agreed squad transfer values are also covered, regardless of players’ age and medical history.

Until now there has been no insurance product available that covers clubs against loss of revenue due to players’ injury.

The combined value of the squads of the top 20 European football clubs is estimated to be more than $8.23 billion, but the AES and Hiscox reckon that very little of this amount is protected.

“Football clubs are among the very few businesses whose key assets – on which they rely on for their successes – are exposed to harm on a weekly basis,” says Guillaume Bonnissent, head of alternative distribution division at Hiscox. “Until now clubs haven’t had the ability to comprehensively protect these expensive assets in the same way that other businesses protect their balance sheets.”

EUROPE

01

03

02

040506

04

02I REVENUE PROTECTION FOR TOP EUROPEAN CLUBS

NIGERIA

01I OGUN STATE HEALTH INITIATIVE

The Ogun State Government, under i t s publ ic p r iva t e partnership (PPP) initiative, has secured the support of African Health Market for Equity (AHME), par tners comprising the World Bank and allies on the roll-out of the Community Based Health Insurance Scheme (CBHIS) in the state.

Commissioner for health, Dr Olaokun Soyinka, who made this known in Abeokuta after a presentation on the processes and modalities for the operation of the scheme, pointed out that the development would help the government achieve a re-defined health strategy, thereby providing an efficient healthcare system.

© C

orbi

s

06-07-POL-66-Global Eye.indd 6 1/15/14 12:18 PM


Aetna recently announced that it has agreed to acquire UK-based InterGlobal from a group led by its majority shareholder,

Alchemy Partners. InterGlobal has more than 65,000 medical members worldwide a nd specialises in international

private medical insurance for groups and individuals in the Middle East region, Asia, Africa and Europe.

The terms of the transaction, which are not material to Aetna, were not disclosed. However, the company expects to finance the acquisition from available resources, which is anticipated to close during the first half of 2014 and be neutral to Aetna’s financial results this year.

“The addition of InterGlobal to Aetna’s international business will expand our footprint in fast-growing geographies, increase our membership and enhance our international penetration with individual, small- to mid-sized business customers,” says Mark T. Bertolini, Aetna’s chairman, CEO and president.

“This acquisition will increase our presence in the marketplace for international private medical insurance, where growth is being driven by dynamics, such as the continued globalisation of companies of all sizes, the growing population of high-net-worth individuals in emerging

economies and reform efforts by governments around the world to increase access to healthcare.”

R icha rd d i Benedet to, president at Aetna International, adds: “InterGlobal is well established in the high-growth pr ivate medical insurance regions of the Middle East, Asia and Africa through a distribution model that incorporates local st rategic par tners and its own licenses. These strategic arrangements will allow us to offer our healthcare solutions locally to Aetna’s customers in at least one dozen additional countries in those regions. InterGlobal also shares our commitment to customer focus and service excellence.”

Stephen Hartigan, CEO of InterGlobal, says: “Aetna’s position in the US as a leading diversified healthcare benefits company is impressive. Its commitment to international development in the health insurance sector is shared by InterGlobal. We are looking forward to becoming part of the Aetna family.”

UK

CHINA

03I EXECUTIVE OF STATE-OWNED CHINESE INSURER UNDER INVESTIGATION

© C

orbi

sGLOBAL EYE

Chinese authorities are investigating an executive at the China Export and Credit Insurance Corporation for corruption, making him the latest target of a widening corruption crackdown. Dai Chunning, vice-president at the company, which is also called Sinosure, is “suspected of serious discipline violations”, the Central Commission for Discipline Inspection revealed on its website.

China’s president, Xi Jinping, says that endemic corruption threatens the party’s very survival and has vowed to go after high-flying “tigers”, as well as lowly “flies”. Authorities have already announced the investigation or arrest of a handful of senior officials, which includes former officials of oil giant PetroChina, in what appears to be the biggest graft probe into a state-run firm in years.

04I AETNA ACQUIRES INTERGLOBAL

06-07-POL-66-Global Eye.indd 7 1/15/14 12:19 PM


REGIONAL

NEWSIndustry updates from around the Middle East

KSA | AXA UNVEILS MAJOR BRAND CAMPAIGN

AXA Cooperative in Saudi Arabia launched its most important brand campaign in the country. It is part of its strategy to reinforce AXA’s world-class standards in the insurance sector. The TVC, outdoor and online campaign emphasises the benefits of insurance, and the need to protect and secure our families, as well as our valu-able possessions. It also supports the company’s vision and insur-ance solutions that offer more than any other traditional insurance products, coupled with its renowned customer experience.

Jérôme Droesch, chairman of AXA Cooperative, says: “With this campaign, we want to communicate what sets AXA Coopera-tive apart; from the caring service our colleagues provide to our customers, to our wide product portfolio. Through this campaign, we wish to emphasise that AXA is a powerful brand that people should trust.”

He adds: “We hope the campaign will engage the Saudi popu-lation with our international brand and communicate who we are, our positioning, ambitions and values. Overall, we aim to set us apart, with positive, compelling messages. The launch of our brand underlines our commitment to responding to what the people of the kingdom strive for – stability and protection – and supporting them throughout different stages of life and business with innova-tive products and exceptional services. Looking forward, we are well positioned to capture the ample opportunities lying ahead of us and a number of initiatives are under way to accelerate our growth as the preferred brand in the kingdom and insurance industry.”

UAE | DUBAI ANNOUNCES INTRODUCTION OF MANDATORY HEALTH INSURANCE

Authorities in Dubai have recently announced the long-awaited plans to introduce an Abu Dhabi-like compulsory health insurance scheme. The plan, which is to be rolled out in phases, is expected to be in full operation by 2015. Dubai aims to have everyone – expatriates and nationals living in the emirate – covered under a basic health insur-ance scheme. Plans have been in the pipeline for quite some time and, similar to Abu Dhabi, the responsibility will fall on employers to provide workers with adequate cover. Authorities have confirmed that they will continue to bear the responsibility of insuring nationals. Many have predicted that the new scheme will have major implica-tions on the UAE’s insurance market and, as penetration increases, it will be interesting to see how companies respond.

© a

rabi

anE

ye.c

om

08-10-POL65-Regional News.indd 8 1/15/14 12:21 PM


Arab Petroleum Investments Corporation (APICORP) has signed a credit insurance policy with the Islamic Corporation for the Insurance of Investment, which will help the former to manage r isks sur rounding letters of credit transactions and petroleum exports to ICEIC

member countries. APICORP’s CEO and general manager, Ahmad Bin Hamad Al Nuaimi, says: “Trade finance forms an important focus of our diversi-fication strategy and contributes significantly to our mandate to support the Arab region’s energy industry development.”

REGIONAL NEWS

QATAR | A.M. BEST AFFIRMS EXCELLENT RATING FOR QIC

A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of ‘A’ (excellent) and issuer credit rating of ‘a’ (excellent) for Qatar Insurance Company (QIC) and its main subsidiaries.

They reflect the firm’s excellent prospective risk-adjusted capi-talisation, supported by strong financial flexibility, robust under-writing performance and strong business diversification.

Offsetting rating factors are the QIC’s concentration in Qatari equities and the execution risk associated with the expansion of Q-Re, its wholly owned subsid-iary. The QIC strengthened its risk-adjusted capitalisation in 2013, following a successful rights issue raising shareholders’ equity by $108 million.

It has also demonstrated a robust track record of under-writing profitability, producing a

group-wide combined ratio that is below 86 per cent over the past five years.

The QIC maintains its domi-nant position in the Qatari market and is well diversified regionally, with operations in the UAE, Oman, Kuwait and Malta. Furthermore, through Q-Re, it is aiming to develop a globally diverse reinsurance portfolio.

In 2013, a rapid expansion at Q-Re increased premium

revenue by more than 33 per cent. However, the reinsurer’s perform-ance is under strain and below expectations, as reported loss ratio stood at 88 per cent in the third quarter of 2013.

The QIC’s planned expansion will require stronger risk manage-ment capabilities to manage its diverse operations. While an experienced new management team is in place at Q-Re, there remains material execution risk.

KSA | APICORP SIGNS DEAL WITH ICIEC

© C

orbi

s



MENA | LOCATE YOUR AXA MEDICAL PROVIDERS ON THE GO USING SMARTPHONES AND TABLETS

AXA Gulf has launched an upgraded online medical provider locator service in the region, making it possible for customers to locate a provider on the move using their smartphones or tablets.

Customers no longer have to depend on paper-based provider lists, with Google Maps providing the perfect geographic platform to help identify the nearest provider. They can search for providers based on various set criteria, such as country, city, type of hospi-tals/clinics, specialities and/or their names, as well as take a print copy of the same and source a specific list of providers based on the search criterion.

Alexis de Beauregard, chief officer of marketing and retail prod-ucts at AXA Gulf, says: “AXA believes in setting new standards in customer service and convenience. Last year, we announced the launch of our online medical provider locator, and this year we have upgraded to provide the same on any smart device. Customers can now access their preferred AXA medical provider from any part of the globe. The healthcare service needs of our customers are of utmost importance to us and we believe this step will go a long way in improving our customers’ healthcare needs.”

UAE | NEW REGULATIONS FOR BROKERS IN THE COUNTRY

Sultan bin Saeed Al Mansouri, chairman of the UAE Insurance Authority’s (IA) board of directors and the UAE’s economy minister, has issued new regulations for insurance brokers in the UAE.

Al Mansouri says: “The new regulatory framework is a great step towards regulating insurance brokers in the UAE and advancing the performance of the sector in line with the highest competitive standards.”

Based on the IA’s new regulations, an incorporated insurance broker licensed to operate in the UAE under the Commercial Companies Law, will have to main-tain a minimum paid-up capital of AED3 million. Also, an insurance broker that operates as a branch of a foreign company should maintain a paid-up capital of AED10m.

The new regime reportedly sets a minimum bank guarantee of AED3m for an insurance broker licensed to operate in the UAE under the Commercial Compa-nies Law and AED5m for insurance brokers oper-ating as branches of foreign companies or branches of companies established in the financial free zone of the country.

As a minimum and as per the new rules, an insur-ance broker is required to appoint a general manager or a CEO, a chief of operations, a controller and a specialised employee for each one of the broker’s licensed branches.

Reportedly, existing insurance brokers have been given one year to settle their current situations.

REGIONAL NEWS©

Cor

bis



MARKET MOVES I APPOINTMENTS

APPOINTMENTS MARKETMOVESIndustry appointments from around the Middle East

CHRISTIAN VOGELCEO.

MICHAEL GERTSCHGLOBAL HEAD OF FACULTATIVE.

Gulf Reinsurance Ltd (Gulf Re) recently announced the appointment of Christian Vogel as CEO of the company. Vogel, who served as chief underwriting officer, takes over from Michael Gertsch, the firm’s former CEO. The new appointment has been effective from December 1, 2013. The move comes as the Dubai Financial Services Authority approved reinsurance specialist continues to consolidate the strong performance it has recorded since launch.

“Vogel has been a fundamental component of Gulf Re’s consolidation process in the GCC region and its expansion into the Mena region, since he joined Gulf Re in December 2010. He was also pivotal in establishing the underwriting platform under Gertsch’s guidance” says Marc Grandisson, chairman of Gulf Re and chairman of Arch Worldwide Reinsurance Group.

Michael Gertsch has been named global head of facultative, effective from February 1. He joins Q-Re from Gulf Re where he served as CEO from March 2011 to November 2013, after working as its chief underwriting officer since its establishment in 2008.

He has been in the insurance industry for more than 25 years, holding various treaty and faculta-tive underwriting positions at General Re and Swiss Re UK, before moving to PartnerRe in 1999, where he led its facultative property portfolio.

Prior to joining Gulf Re, Gertsch held the position of deputy head of specialty lines, where he managed PartnerRe’s worldwide industrial property, energy and engineering facultative operations and treaty.

Gunther Saacke, CEO of Q-Re, says: “We are delighted to welcome Gertsch to Q-Re. He will be instrumental in establishing a broad and deep facultative footprint for Q-Re. My colleagues and I look forward to working with him, as we build Q-Re’s global franchise.”

“I am excited to join Q-Re at a very important stage of the company’s development. Based on the firm’s existing strengths and capabilities, underwritten by a team of specialists, we will build a glo-bal facultative book of business that will not only support the continued diversification of Q-Re’s portfolio, but also further enhance its brand and recognition as a global reinsurer,” says Gertsch.

GULF RE CHRISTIAN VOGEL PROMOTED TO CEO

Q-RE MICHAEL GERTSCH APPOINTED GLOBAL HEAD OF FACULTATIVE

© C

orbi

s

11-12-POL-65-Market moves.indd 11 1/15/14 12:25 PM


Lockton Mena, a unit of the world’s largest privately owned, independent insurance broker Lockton Companies, announced the appointment of Tony Saada as CEO.

He will be responsible for developing and serving Lockton’s rapidly expanding client base in the Mena region, as well as meeting the growing demand for its expertise.

Wael Khatib, executive chairman at Lockton Mena, says: “Lockton is committed to provid-ing our clients with the highest standards of service, while introducing innovative risk transfer, insurance and reinsurance solutions. Our operation in the Dubai International Financial Centre delivers that service in one of the region’s most influential financial centres and insurance market places. Saada’s appointment will deliver a breadth and depth of experience and expertise that will help us continue to build our business and deliver results for clients.”

Prior to his appointment, Saada spent 27 years at Marsh and most recently as senior executive officer at Bowring Marsh in Dubai.

Argo Group International Holdings Ltd, an international underwriter of specialty insurance and reinsurance products, has announced a new management appointment within its international specialty segment.

Glenn Burles has been appointed senior executive officer of Argo Re (DIFC). Based in Dubai, Burles will oversee the company’s reinsurance operations in the Mena region. He replaces Tony Cabot, who is returning to his role as Argo Group’s director of product development for Europe, the Middle East region and Africa.

Burles joined Argo Group in 2009, prior to which he held underwriting roles at XL Group (Europe) and Zurich Insurance. Burles will report to Nigel Mortimer, managing director of international specialty insurance.

TONY SAADACEO.

GLENN BURLES SENIOR EXECUTIVE OFFICER

LOCKTON MENA TONY SAADA NAMED CEO

ARGO RE GLENN BURLES JOINS AS SENIOR EXECUTIVE OFFICER

MARKET MOVES I APPOINTMENTS

© C

orbi

s

11-12-POL-65-Market moves.indd 12 1/15/14 12:25 PM

JANUARY - FEBRUARY 2014 I 13

LONDON

EYENews reports and trends from the world’s leading insurance market

Direct Line Insurance Group announced that it has completed the final sale of its life insurance unit to Chesnara PLC for a reported figure of £39.3 million. Chesnara PLC says that the deal was completed on November 28, 2013, and all of the conditions precedent to the completion of the acquisition of Direct Line Life Insurance Company Ltd have been fulfilled.

Chesnara PLC also reports another strong quarter with good operational profits built on strong investment market per formance. Dur ing the first nine months of the year global investment market performance has continued to have a significant influence on the group’s results.

Residential property owners in high risk flood zones in New Jersey, US, can now pu rchase pr iva t e ma rket pol icies as an a lternat ive t o F e d e r a l E m e r g e n c y Management Agency (FEMA) flood insurance. Evan Hecht, CEO of The Flood Insurance Agency, met with New Jersey’s department of banking and insu ra nce com m issioner, Ken net h E . Kobylowsk i , and many of his senior staff introduced the new programme underwritten by Lloyd’s of

London in December, 2013. The policy was first launched in Florida in November and has already had a positive impact on the real estate market. It has the same coverage as a FEMA, but requires no elevation certificate and, for some properties that have experienced dramatically increased premiums due to the new Biggert-Waters flood legislation passed in July, the Lloyd’s policy costs thousands of dollars less and provides similar cover that sufficiently protects policyholders.

PRIVATE MARKET FLOOD INSURANCE UNDERWRITTEN BY LLOYD’S OF LONDON NOW AVAILABLE AS COVERAGE ALTERNATIVE IN NEW JERSEY

© d

ream

stim

e

© C

orbi

s

© C

orbi

s

DIRECT LINE LIFE INSURANCE GROUP COMPLETES £39.3 MILLION UNIT SALE TO CHESNARA PLC

13-14-POL-65-London eye-n.indd 13 1/15/14 12:33 PM


Recent attacks on Kenya have heightened fears and many businesses in East Afr ica are starting to seek sufficient terrorism cover.

Consequently, th is shif t towards more businesses taking out such policies is also likely to have a positive impact on the London market, because as the majority of terrorism policies are under the war market they are usually reinsured into the London market.

Given the limited capacity of the African reinsurance market for large and volatile risks, A.

M. Best anticipates that any rise in demand will benefit the global reinsurance market, particularly in London, despite compulsory cessions for reinsurance risks in Kenya to Kenya Re, ZEP Re and Africa Re.

“Given the limited appetite for underwriting political risk, the low retention ratios for this line of business and the absence of a terrorism reinsurance pool in Kenya, it is thought that Lloyd’s insurers are likely to assume the majority of the risk for the Nairobi attack,” claims A. M. Best.

Speaking at the ninth World Islamic Economic Forum Cobalt Underwriting’s CEO, Richard Bishop, announced that the Cobalt is the first Shari’a-compliant underwriting agency based in London, and that the city is well placed to be an Islamic financial hub, as it is in conventional areas.

However, while much has been said about the growing role of London as an Islamic banking and investment centre, he says there is very little to boast about when it comes to shari’a-complaint underwriting.

Bishop adds: “As a newcomer to the Islamic financial space, the insurance industry has been relatively forgotten when it comes to the City of London’s Islamic offering. However, the City’s oldest institution is Lloyd’s, founded 350 years ago on a mutual basis that is not too far removed from the Islamic finance model.

“The market still sources its business from countries across the world and I would think there are few places where Lloyd’s policies do not have risks covered.”

KENYAN TERRORISM INSURANCE GROWTH TO BENEFIT LONDON MARKET

COBALT UNDERWRITING CEO TELLS BUSINESS LEADERS THAT LONDON IS ‘WELL PLACED’ TO BE ISLAMIC FINANCE HUB

© C

orbi

s

13-14-POL-65-London eye-n.indd 14 1/15/14 12:33 PM

16 I I NOVEMBER - DECEMBER 2013

COVER STORY I M&A

16-21-POL-66-Cover Story.indd 16 1/15/14 12:35 PM


Just like the grim reaper, price wars, unsustainable business models and capitalisation requirements will soon

take their victims. Although the GCC region has recovered well from the financial crisis across all industries, there seems to be a level of growth that, at least on the surface, seems much more sustainable than that of the mid ’00s. For insurance, it is slightly more complicated and, in spite of the fact that penetration levels are increasing, they are still significantly low. This is a cause for concern on a social level and, accom-panied with an increase in the number of companies, what we are often left with is oversupply and highly competitive markets that are driven by price. So, in order to mediate these trends and avoid wide-spread business failures, authorities must be hoping for an increase in M&A activity.

When making a case for an increase in M&A activity in the region, it is interesting to look at the general economic landscape. A half-baked recovery, as it is often dubbed, has been fuelled by high oil prices, healthy government finances and, of course, a youthful, educated and affluent population. The combination of these factors has created a successful remedy for recovery in the GCC region and market confidence is surely returning

to cities, such as Doha, Abu Dhabi and Dubai. With this renewed confidence, there have been more M&A deals across other industries, particularly in energy and construction. However, insurance as with many things still lags behind.

Consolidations for consolidationsʼ sakePOLICY speaks with Peter Hodgins, partner at Clyde&Co, and as he sponsors the growing need for M&A activity, we

ask him about his views on the truism that such activity serves to consolidate operations for increased efficiency and stability. He says: “The need for consolidation in the insurance sector has been a topic of discussion for many years in the region. Put simply, there are too many insurers for the premium volume currently generated in local

A LIKELY SAVIOUR

COVER STORY I M&A

Many within the industry are calling for an increase in mergers and acquisitions (M&A) to avoid business failures. Speaking with Peter Hodgins of Clyde&Co and James Portelli from United Insurance, POLICY explores the arguments for and against.By Hossam Abougabal

“The need for consolidation in the insurance sector has been a topic of discussion for many years in the region.”



COVER STORY I M&A

markets. In most GCC markets, two or three of the largest insurers dominate the market, leaving the remaining companies fighting to generate business. This has led to fierce competition and, consequently, declining premium rates across many lines. In these circumstances, consolida-tion has long been mooted as the poten-tial solution.

“The financial failure of an insurer is a subject of concern to regional regulators and there is increasing scrutiny as to the prudential requirements for insurers by the regulators. In what remains a fairly ʻyouthfulʻ market, where awareness of

insurance remains relatively low, such a failure would be damaging to the reputa-tion of the industry as a whole. For this reason, we have seen regulators, such as the Saudi Arabian Monetary Agency, actively encourage consolidation over the establishment of new insurers.”

From this, one gets a feeling that M&A activity is an industry wide concern. In a region where penetration and awareness levels are low, and public perception is not favourable, business failures of even the smallest companies can have extremely adverse affects on the market as a whole. Insurance companies are indebted to

public trust and when companies break down, the whole industry loses confi-dence. Therefore, it is not simply a matter of consolidating, but rather applying the right business models to absorb all of the markets challenges.

“Insurers should also consider whether consolidation is the best option. Consoli-dations for consolidationsʻ sake may not always be the best solution. It is necessary to consider whether there will be benefits from a consolidation. Achieving scale may be a solution, but, if it is solely combining two loss-making businesses, it does not necessarily mean the combined business will be successful. It is often the case of ensuring that the businesses are comple-mentary and that consolidation will not only create scale (and hopefully the effi-ciencies that go with scale), but also allow

© C

orbi

s

“Concerns in the industry are down to how a company prices products... and the extent of reinsurance support."



COVER STORY I M&A

for diversification. Careful consideration should be given to the management, time and effort that will be required in relation to the consolidation process, both in terms of assessing whether a transaction is achiev-able and then implementing the consolida-tion,” adds Hodgins. This view opens the door to an argument that alternatives to consolidation may include considerations of joint ventures with foreign insurers – acquisition of a foreign insurer or focusing on niche lines of business.

POLICY talks to James Portelli, general manager at United Insurance, who provides a different viewpoint on M&A activity. “I do not subscribe to the notion that the industry is in need of more M&A activity,” he says. Portelli explains that concerns in the industry are down to how a company prices products and

the extent to which it enjoys reinsurance support. Although he believes that M&A activity is likely to increase in the coming two to three years, he does not think “that there will be a direct impact of mergers or consolidation of insurance companies”.

Portelli goes on to admit that if the insurance law is passed in 2014, we may witness more consolidation and/or reduc-tion of brokers in the market, but not of insurance companies.

Outsider interestM&A activity does not necessarily have to come from within. As Hodgins mentions, the prospect of international M&A activity is something that many see as an option and a trend that seems to be gathering pace. Recently, deals have been led by international insurers looking to enter the market. In countries where licensing laws are complicated and often serve as a barrier, M&A becomes a solution for

companies looking to enter the Middle East region. We saw this with Zurich in its acquisition of the Lebanese Insur-ance Company. Slow growth in other markets has meant that the Middle East and GCC regions, in particular, now stand out as favourable markets to enter. Japan is slowly emerging as a market particularly interested in the region.

If the insurance law is passed in 2014, we may witness more consolidation... in the market... but not of insurance companies.

© C

orbi

s



COVER STORY I M&A

Hodgins says: “As regulators in key insurance markets in the GCC region, such as the UAE and Saudi Arabia, are increas-ingly reluctant to grant new licenses, there is inevitably a rise in interest in M&A by foreign insurers as a mechanism for entry into new markets.”

Therefore, regulators must recognise this international wanting of the Middle Eastern market and create a smooth legal platform to serve this interest.

Insider interestThis is not to say that all M&A activity will come from outside the region and there are different lines of business within certain regional markets that could be subjected to such consolidation activities.

For example, takaful is an area that has long been identified as one of potential growth and it will be interesting to see if takaful operators start adapting strat-egies of consolidation to further cement this potential of growth.

Hodgins adds: “The takaful market is a microcosm of the wider insurance industry and, therefore, subject to many of the same pressures. The fact that takaful, if anything, is even less devel-oped means that it has been difficult for players to achieve scale.”

This fear of not being able to achieve scale will mean that as capitalisation requirements and regulatory harmonisa-tion gain momentum, takaful operators will be forced to do something to avoid

business failures of any kind, especially when under the pressures of expected religious and financial integrity.

The problem facing the takaful market in this regard is that although Islamic investments are less volatile, they are difficult to manage and receive a signif-icantly lower return on equity, when compared with conventional businesses.

BarriersCapitalisation pressures and rising expenses in an extremely competitive and saturated market create the perfect remedy to make one assume that an increase in M&A activity is imminent. Speaking with POLICY in 2012, Ashok Sardana, managing director of Continental International Group, made it clear that the industry has for long been anticipating more deals. He says: “The cost of opera-tions is going up, salaries are rising, cost

“The cost of operations is going up, salaries are rising, cost of business is increasing, but margins are not.”

© C

orbi

s



COVER STORY I M&A

of business is increasing, but margins are not. So, it may be prudent to merge and acquire organisations for the ultimate health of the industry.”

Yet, not much has happened since. A report from Clyde&Co, published in 2013, actually shows a decline in the number of insurance deals in the region.

So, why is this not happening?The biggest problem facing M&A activity in the region, according to Hodgins, is the inability to achieve accurate valu-ations. “Unrealistic expectations on the part of the existing shareholders has been a key factor in a number of transactions that have been aborted in the region to date.”

Share values often do not reflect the actual net worth of a company and deals fall apart as a result of such discrepancies in numbers. Hodgins

goes on to affix that: “This is especially the case in the UAE and Saudi Arabia, where the fact that insurersʼ shares are listed has distorted the perceived value of the companies in question. The huge interest in such companies at the IPO stage, followed by limited subsequent trading of their shares in the market, means that share values often bear little reflection to the net worth of a company.”

Overall, it is clear that the industry is in need of something to ensure that no business failures occur in 2014. As

mentioned earlier, the debt of public trust that entrenches companies in the region means that failures of any sort will have an very negative affect on the market. Saying this, many analysts, such as Hodgins, believe that there needs to be an increase in M&A activity and companies must begin to consolidate their operations to enjoy more success.

However, there are those in the industry, such as Portelli, who claim that a lack of consolidation is not the problem, nor is it the solution. Those in favour of this view

feel that companies must first improve existing operations by ensuring pricing is appropriate and reinsurance support is sufficient. Regardless of which camp you're in, the reality is that the industry must do something to avoid business failures, and 2014 will prove to be an interesting year as the call for M&A activity grows.

“Unrealistic expectations on the part of existing shareholders has been a key factor in a number of transactions that have been aborted...”

© C

orbi

s

can we change the image to people linking arms to represent 'mergers' - thanks



© C

orbi

s

COUNTRY PROFILE I EGYPT

22-26-POL-66-Egyptian Insurance.indd 22 1/15/14 12:40 PM

NOVEMBER - DECEMBER 2013 I I 23

Political uncertainty and economic insta-bility has dominated the agendas of many decision makers in Egypt. As

loans, investments and grants from the IMF, the GCC region and other foreign countries flood the Egyptian market, less and less is clear about the financial services sector, and its plans to develop and empower internal industries, such as insurance and banking. According to a Lloyd’s of London report on Egypt, banking and finance currently sits seventh on a list of the top sectors. If this serves as any indication, regardless of opti-mistic forecasts and political turmoil, there seems to be a truism that the financial serv-ices industry lacks importance in an economy that is trying to mirror itself on modern neo-liberal standards.

The current GDP of Egypt, according to the IMF fact box 2013, is $561 billion.

With an economy that is considered emerging/developing, Egypt still falls short in corruption indexes and has actually dropped from 100 to 111 in the corruption list of the Index of Economic Freedom (2013).

It is also difficult to ignore the economic heartache that Egypt has endured in the past two years, but as waves of mass protests stretch, the rhetoric of solution from those in power has become more ambiguous than ever before. Socio-polit-ical and, to a large extent, economic poli-cies, reforms and plans are clear, but it is difficult to understand what the strategy is for financial institutions and industries, such as insurance.

POLICY specifically looks at the insur-ance market to underscore and forecast developments in the non-banking sector.

We talk to Mahesh Mistry, director of analytics at A.M. Best Company’s Middle East division, and Sherif Samy, chairman of the Egyptian Financial Supervisory Authority (EFSA), about the state of the Egyptian insurance market and what we are likely to see in the coming months. Both provide insights into the local market and although they conflict in their views on the current state of affairs, they agree that there is a need to transform and empower particular institutions to stimulate growth and good practises.

Looking at insurance, it is clear that the industry is gathering pace across the region and public awareness in general seems to be improving and, yet, Egypt stands out as a country lagging behind. Total insurance penetration currently sits at a strikingly low 0.7 per cent, according

MACRO-PROBLEMS, MICRO-SOLUTIONS


As Egypt continues to make the headlines for all the wrong reasons, POLICY explores the country’s insurance market and possible solutions for an industry that continues to struggle in the backdrop of the current economic heartache.By Hossam Abougabal




to a Swiss Re Sigma report, and even with the recent civic unrest, the demand for insurance doesn’t seem to be growing.

Moreover, it also doesn’t help that the Egyptian market is dominated by Misr Insurance, which makes up approximately 50 per cent of non-life premiums. A major issue that faces the industry in this respect is the lack of a level playing field.

“Misr Insurance dominates the market and even if you look at the Suez Canal Insurance Company, it has a very small market share. The market must be liber-alised for any real growth,” says Mistry.

There is a view that government build-ings, museums and public spaces are insured through Misr Insurance, irre-spective of price and quality. The percep-tion is that deal grabbing and corruption

is ripe in the Egyptian insurance land-scape, however, either way, it is clear that more needs to be done to distribute equal opportunities within the market for any real development to take place.

When speaking with Sherif Samy, you get a different viewpoint, as he dismisses such claims by adding that: “All compa-nies operate on purely commercial terms and [the EFSA’s] concern is to ensure that they do not breach prudent practises and remain within the boundaries of accept-able risk taking as any financial regulator would do.”

It is difficult to coin the root of the problem and although it is easy to argue that the lack of competitiveness is a result of deal grabbing, it is also crit-ical to remember previous intentions of

a state-backed merger project in 2004, which brought together four companies into a champion one in Misr Insurance. Market dominance should, therefore, not come as any surprise.

Looking forward, it will be interesting to see whether authorities will encourage competitiveness, and invite multinationals and foreign investments. As Mistry says: “After the political standstill is over, whoever is in charge will soon have to make that decision.”

Although socio-political reforms are of principal importance in Egypt, an inability to stimulate the financial serv-ices sector will leave an already heavily damaged economy dependant on tourism and manufacturing; two industries that have been brought to a standstill in the past 24 months.

Moreover, as those in power talk of building a modern Egypt, they must also develop a modern landscape for financial

“Misr Insurance dominates the market and... the Suez Canal Insurance Company has only a small market share...”




0%10%20%30%40%50%60%70%80%90%

100%

sectors, such as insurance. Mistry says: “Turmoil means that when things do settle down, there will be a boom and as people start rebuilding, confidence will grow.”

There seems to be a trend of growth relating to political risk policies. The Egyptian market has overcome previous confusions relating to the definition of civil unrest, commotion and war. “Following the mismatch of informa-tion regarding political risk cover and the willingness of international reinsurers to support the market, this line of insurance is set to grow,” says Mistry.

Although this serves as a negative social indicator, it does provide hope that some lines of insurance could develop soon. Yet, this is by no means light at the end of the tunnel and, as Mistry says: “Generally speaking, market growth is heavily linked with GDP performance and company assets have been hit hard as a result of declining stock and real estate markets.”

In order to address market-specific issues, Insurance Federation of Egypt (IFE) and the EFSA must begin to collec-tively install effective regulatory frame-works. Talking to Mistry about regulatory initiatives prior to the political crisis, he adds: “Before the crisis, regulators were on track in attempting to mirror interna-tional standards and apply them to the Egyptian market”, but goes on to admit that “recently, not much has been coming from regulators and, hence, it is difficult to understand their direction”.

The EFSA, on the other hand, seems optimistic in this regard. Samy says: “We are aggressively revising capital market executive regulation, namely the funds chapter, in addition to several changes to bonds, securitisation and capital increases. In insurance, we have been collecting feedback from the industry, with the main objective of modernising execu-tive regulation (that must be issued by the Minister of Investment).”

Yet, Samy himself concedes that all insurance laws are subject to political stability. “Insurance laws will come at a later stage, when a parliament is elected, although the EFSA has already revised a set of rules to be adopted by the financial services industry.”

He then goes on to talk about the organisation’s recent efforts to develop

specific laws to govern microinsurance – a phenomenon believed by the EFSA to be vital for social justice and financial inclusion. Although the interest of regula-tors in microfinance doesn’t mean much for the conventional insurance market, it is an important one.

Egypt is often talked about in a poetic rhetoric, referring to its geo-political and historic influence, yet it is home to one of the poorest populations in the Mena region. Literacy rates and average incomes are among the lowest in the world. It is, therefore, no surprise that penetration rates are also very low. Out of this stems the motivation of regulators to encourage companies to offer new kinds of products that are more in line with the principles of microfinance.

The definition of microinsurance is exactly the same as one might use for regular insurance, except for the clearly prescribed target market: low-income

people. The target population typically consists of people ignored by main-stream commercial and social insur-ance schemes, as well as those who have not previously had access to appropriate insurance products.

Although the Egyptian market faces many challenges and companies may be reluctant to offer such products, many are predicting a shift towards microfinance to cater to large portions of the popula-tion. Countless households in Egypt have irregular and low incomes, hence insur-ance becomes a luxury not a necessity.

Although microinsurance is yet to take off, Egypt has experimented in the past with microfinance products, such as personal loans and credit. Even though its financial benefits are limited, there is a significant social impact that not only improves the lives of many, but goes a long way in bettering insurance awareness among the population, especially with




those who would not have been exposed to conventional protection otherwise.

On pointing out the growing need for financial accessibility to large portions of the Egyptian society, Samy agrees and expresses his and the EFSA’s enthusiasm for microfinance in general.

He says: “Yes, we definitely encourage it, because we believe it is very crucial for financial inclusion. Fascinatingly, it existed in Egypt in the ̓ 60s and early ̓ 70s under the name of ʼpopular insuranceʼ, but then it faded away.

“From a regulatory point of view, we see it as a specialised section to be included in insurance laws and not part of the general microfinance laws. Yet, our view is that we would not want microfinance companies to offer both services (lending and underwriting). In that case, we are working towards a legal framework for microinsurance.”

Mistry, on the other hand, advocates a continental analysis. “Microinsurance is just a buzzword and adds no real value,” believing that in order to truly increase penetration and awareness “there needs to be an increase in income per capita”. “Microinsurance may do good for a few, but the impact is very small and does nothing for a country as large as Egypt,” he adds.

This view may be right when thinking about the impact of microinsurance on penetration and awareness levels, but it is difficult to ignore the social influence it can have on the millions of informal workers in Egypt living on less than $2 a day. With echoes of social justice still ringing in post-revolution Egypt and going by the EFSA’s interest in microfinance, one can imagine the latter gathering momentum in the months ahead, albeit fuelled by populist policies coming from govern-ment institutions. Conclusively, it is the

continued disconnection of large portions of the Egyptian society from insurance and finance in general, coupled with political instability, that is turning growth prospects into an upward battle for both authorities and regulators.

Looking forward, it is clear that growth for Egyptian industries heavily depends on an improved economic climate; one that unless the political house is put back in order is unlikely to materialise anytime soon.

Nevertheless, analysts have predicted that although general insurance is likely to continue to suffer, there is capacity for the growth of corporate insurance, even if it is too dependent on investment.

Moreover, following the ousting of the Muslim Brotherhood, investors will be monitoring progress in hope for an improved landscape. However, if Egypt can strike a balance of socio-political stability, economic opportunities for all industries may very well follow in the form of improved confidence and increased investment.

“Microinsurance is just a buzzword and adds no real value... the impact is small and it does nothing for... Egypt.”


In these turbulent times, who knows what opportunities may blow your way?Crisis in the Eurozone. Global lack of confidence. Uncertainty. Unrest. In such a volatile economic climate, many people’s first instinct is to run for shelter. But what if that meant missing out on fresh possibilities? At Swiss Re, confronting uncertainty has been our business for 150 years. And now, in today’s ever more rapidly shifting risk landscape, our task is to be ever more agile and alert. We’re here to identify emerging risks and opportunities alike, and enable our clients and brokers to look beyond the immediate challenges. At Swiss Re, risk is our raw material; what we create is opportunity. See which way the wind is blowing at www.swissre.com

PolicyMagazine_Windmill_EN_281013.indd 1 28.10.13 08:26


© C

orbi

s

FINANCE I AGGRESSIVE INVESTMENT

28-32-POL-66-Agressive Investment.indd 28 1/15/14 12:44 PM



The GCC region has reached a financial crossroad; a half-baked recovery from the crash of 2008 provides the motiva-

tion to ensure that similar mistakes are never repeated. For insurance, previous invest-ment strategies seem foolish, yet the holistic de-risking of investment portfolios is yet to sweep the industry and several companies are still in danger of allowing their profits to depend on extremely volatile stratagems. POLICY explores current investment strate-gies and looks at why some firms are failing to leave behind the ghost of investments past.

The reality of post 2008 is that invest-ment returns may not be sufficient for firms that have previously relied on the performance of financial market assets to meet their liabilities and support prof-itability targets. Companies in the GCC region usually do not have a dedicated

asset liability management strategy to mediate volatility risk to meet future and current liquidity needs. Instead, they have often applied aggressive investment strategies with exposure to local equities and property (45 per cent and 35 per cent respectively of assets under management). On the other hand, investment portfolios of leading international insurers have more diversified asset allocations, with a significant portion on fixed income securities and international assets.

In the GCC region, meanwhile, the lack of such investment strategies have nega-tively impacted business profitability from 2007 to 2011, returning a yield of only 3.3 per cent in 2011, when compared with 10.9 per cent recorded four years earlier, according to a A.T. Kearney report published in 2012.

Turning backThe crash of 2008 had a desolate affect on markets such as Dubai and Abu Dhabi, however the reality is that investment strategies that were previously adopted were proven unsustainable and damaging to the financial market as a whole. From this came a shift in approach and many in the industry claim that aggressive invest-ment strategies are no more. Moreover, companies have proven this change and we see more conservative investments from insurance companies.

POLICY speaks with Dr Hazem Al Madi, CEO of Green Crescent, about whether companies have truly moved away from aggressive stratagems. “Yes, they are shifting, but whether they are staying away is another question and one that will have to be monitored,” says Al Madi. This

With the region’s insurance industry still haunted by the crash of 2008, POLICY explores the variations in investment strategies since. Speaking with Dr Hazem Al Madi of Green Crescent and Cyril Gourp of A.T. Kearney, it is clear that attitudes have changed. However, have they transformed enough to ensure suicidal investments are a thing of the past?By Hossam Abougabal

AGGRESSIVE INVESTMENT:THE GUNSLINGERS’ FINAL SHOWDOWN




is an important question, as investment has become one of the core activities of an insurance company. “It will be down to the higher management, its vision and mission that determines the investments adopted,” adds Al Madi, before talking about the importance of implementing a balanced strategy, as investments can and often do affect technical capabilities.

Speaking with Cyril Gourp, principle at A.T. Kearney, one gets a slightly less opti-mistic view. He says: “One of the things highlighted by the crash is that compa-nies were investing without thinking about their obligations to policyholders.” He then goes on to admit that although diversification of portfolios is gaining momentum, there are still gaps and the

UAE market is much more aggressive than other developed ones. He adds: “The year 2008 was a wake-up call for many in the region and some have really learned that aggressive strategies are just not adequate to meet direct liabilities.” Yet, according to Gourp, the industry still hasn’t reached the point of wholly de-risking portfolios to international standards and this takes us back to Al Madi’s previous comments regarding the importance of monitoring whether companies, in fact, do keep their backs turned to past strategies.

Liquid lunchesThe argument for more liquid portfo-lios is simple. It enables an insurance company to meet expense requirements

quicker and set a firm path for a better interactive financial rating.

Following investment catastrophes of the past six years, to the outside world, it seems almost alien to be avoiding liquid portfolios. Al Madi explains how new regulation mandates companies to split their portfolios proportionately. He says: “For example, companies can invest up to 25 per cent on real estate and ten per cent to 15 per cent in the stock market, with the rest on convertible bonds and fixed deposits.” Gourp, meanwhile, suggests: “Investment strategies should be split up across different business lines, for example medical portfolios should have different strategies as capital require-ments are different.” Although regu-lators have attempted to mandate the make-up of a company’s portfolio, more needs to be done to educate the market on investment risks. There needs to be

“One of the things highlighted by the crash is that companies were investing without thinking about their obligations to policyholders.”

© C

orbi

s




0%10%20%30%40%50%60%70%80%90%

100%

enough will from the market to develop and apply what Gourp labels “region-specific models that work for everyone” and, more importantly, the market.

Moreover, one wonders what role regulators play in relation to investment. Previously, companies were not required to have specialist investment commit-tees, as the senior management made all of the decisions, since regulators made efforts to try and manage companies that are adopting suicidal strategies. Putting in place portfolio requirements allowed regulators to split investments into three pools – real estate, the stock market, and fixed deposits and convertible bonds. Al Madi explains the impor-tance in recognising the significance of proportionality. “Real estate has proven to be extremely volatile and, similarly, the stock market, which was hit the hardest during the recession, made it

clear more so than ever that investment in fixed deposits and convertible bonds are more appropriate.” It seems that convertible bonds and fixed deposits, in fact, promote a culture of longevity and sustainability that the industry so desper-ately needs.

Forever blowing bubbles When the late American TV personality Steve Allen coined the phrase, “Tragedy plus time equals comedy”, he might as well have been talking about Dubai.

The result of tragedy and time is usually awareness, but many feel that with Dubai’s real estate market seeming to be forming another bubble, lessons have not been learned. Property prices have risen by 40 per cent in the past 12 months and recent efforts to play down the prospects of a bubble seem more desperate than sure. Although tighter regulation, stricter rules on property sales and a perception that this time the demand is justified suggest that authorities have a grip on the market.

Even though this may undoubtedly be the case, the market continues to be determined by perception, rather than fundamental factors, which means it is by no means safe from another bubble. This is not to say that a bubble is forming, but as Masood Ahmed, IMF’s director for the Mena region, warns: “When you begin to see rapid increases in asset prices, you just need

Property prices have risen by 40 per cent in the past 12 months and... the prospect of a bubble seem more desperate than sure.




to be prepared to act.” Ahmed uses the example of Singapore, where buyers need to pay a one-time tax of 15 per cent if they resell a property within six months, as a measure that could be implemented in Dubai.

Regulators can now control and limit the percentage of a company’s portfolio being invested in real estate and that, in itself, works as a deterrent against real estate dependency. Although this may be the case and regulators have, in fact, come a long way in having control over investment strategies, the fact remains that even if companies are limited to 20 per cent to 25 per cent for real estate investment, if the remainder is used for long-term prod-ucts, they would still be vulnerable – albeit at a reduced rate. POLICY asks

Al Madi whether he feels a real estate rebound will entice companies to go back to property investment and he says: “Companies behave based on past experiences and those that were previ-ously affected will, of course, be more conservative. And those that weren’t may decide to take the risk.”

Al Madi then goes on to add that although the real estate boom may tempt some companies, more will be attracted by the prospects of potential projects coming out of the recent expo win. “Companies will be more inter-ested in securing deals and growing their portfolios through their core activities.”

Final showdownAny sort of conclusion would rest within the enclaves of future developments. It

is, therefore, difficult to be certain that companies have truly stepped away from kamikaze investment strategies and, at the same time, one cannot be blind to the nightmares of the 2008 crash that still haunt insurance compa-nies today. As Gourp says: “Hopefully, the crash has worked as a wake-up call. Without doubt, the coming years will see further development in adapting low-risk investment profiles. For the short term, however, we are more likely to continue seeing companies depending on volatile returns, but in order for the industry to grow and progress, we are bound to see an investment shift towards fixed-income products.”

Conclusively, the reality is that many companies are still licking their wounds from the recession and with the aid of regulatory requirements, it seems that the gunslingers of the insurance world have retired their weapons for law and order, in favour of the financial markets.

“Companies behave based on past experiences and those that were previously affected will, of course, be more conservative.”

© C

orbi

s



FEATURE I MARKETING INSURANCE

© C

orbi

s

34-38-POL-66-Marketing Insurance.indd 34 1/15/14 12:46 PM


Fuelled by legal requirements on certain segments, such as motor and medical, the Middle East region is starting to

conceptualise and accept the necessity of insurance better. The industry is fast growing, albeit it’s saturated and extremely price-driven. The products that insurance compa-nies sell are personal investments, best viewed as contractual promises than conven-tional products. For this reason, marketing and advertising strategies are fundamen-tally different to other sectors. Industry experts agree that firms must ensure that they are emotionally interacting more with consumers when attempting to increase market shares. So, what should insur-ance marketers do that will be different and, more importantly, why?

Insurance, as it should be, is a personal investment, something that

is thought about and researched before purchasing. Therefore, theoretically, decisions are made based on independent circumstances and, hence, choices should be dictated by suitability and not price.

It is for this reason that many insurance marketers are left wondering about how to efficiently and successfully advertise and promote their brands, especially with huge disparities in consumers’ needs,

affinities and decisions. When talking about marketing in any industry, it is difficult to not first look at how tech-nology and digital interaction are being utilised. We have come to a stage where it is extremely difficult for most industries to ignore the importance of social and digital media. Insurance is no different, especially general and medical insurers whose market share is made up of the general population.

Many industries have already noticed the importance of social media and have found that they are reaping the rewards. Although insurance lags behind, the beauty of the digital age means that it is never too late.

Ben Elliott-Yates of Allianz Global Assistance, who recently gave a pres-entation at the annual Insurex Confer-

It seems that regional companies are continuously failing to truly connect with their customers. POLICY looks at the different dynamics surrounding advertising and promoting insurance as a product. By Hossam Abougabal

MARKETING INSURANCE: STANDING AT THE CROSSROADS


Marketers are left wondering how to efficiently promote their brands, especially with huge disparities in consumers’ needs, affinities and decisions.




ence, talks about the undeniable benefits of the digital world. He highlights that some social networks have memberships greater than most countries in the world, however harbouring the ability to reach millions of people based on gender, age, occupation, hobbies and interests via a click of a button, without sophisticated market research tools or with nothing more than a computer or even a cheap smartphone is essential.

For the purpose of trying to under-stand existing strategies in the industry, POLICY speaks with Caroline Pain,

head of international marketing at Aetna, an international insurer that primarily focuses on medical insurance.

Although Pain would not disclose the actual amount of money spent on marketing in the region, she does share that money is spent according to global budgets and different segments. She says: “[Our] business in the region is heavily intermediated and a lot of our direction is on talking to brokers and connecting in the right places.” Aetna, therefore, seems to have a strategy focused on dialogue and expression.

Considering the idea that insurance companies, more so than other industries, must ensure a level of emotional interac-tion with customers, Aetna seems to be in line with this philosophy. “We focus on editorial, targeted print, conference and seminar presence, and ensuring that we comment in the right places,” adds Pain.

The question of digital media was posed to Pain and although her response was not as detailed, she says: “ We, of course, also consider the online world. A lot of care is taken while positioning our ads on digital media.” Looking at two of the most popular social networks, Aetna International unfortunately has extremely limited activity and visibility on both Facebook and Twitter.

“Social media has become a great way to build personalised relationships with customers.”




0%10%20%30%40%50%60%70%80%90%

100%

As Elliot-Yates points out: “Social media has become a great way to build personalised relationships with customers,” and, in all fairness, Aetna is not the only one in the market that is failing to utilise social media.

Moving on, another issue for marketing in insurance that many multinationals face is understanding the local market and essentially localising strategies successfully. Having said that, Aetna claims that a strategy that encom-passes international principles must be executed in the local way. “Although we currently have a contract with Ogilvy, we use specialised, niche and, more importantly, local agencies to execute plans,” says Pain.

Overall, it is clear from the failures of some and accomplishments of others that a remedy for success in the region must comprise internationally innovative strat-egies that are executed in a local manner, although one is left wondering when the industry will start to seriously invest in social and digital media.

The reality is that the insurance industry

has not yet modernised marketing strate-gies and as non-life insurance penetra-tion in the UAE sits at a shocking 2.2 per cent, it is no surprise that companies are perceived to have fallen short. From this arises an interesting question: Should marketing and advertising campaigns focus on brand building and familiarity or should they serve the public duty of raising public

awareness of insurance in general? Tarun Khanna, executive director

at Nexus insurance, says: “At Nexus, we adopt a combination of elements when thinking about advertising and marketing. We look at two aspects; helping to raise public awareness about insurance and its different lines. We also look at enhancing Nexus as a brand. The

One is left wondering when the industry will start to seriously invest in social media. The reality is that it has not yet modernised strategies...

© C

orbi

s




key, we feel, is coining a balance between these two things.”

So, is the industry achieving this balance? It is difficult to agree and it seems that there is an awareness gap in the region and the UAE, in particular.

Andy McClure, a strategic marketing leader with extensive experience in the Middle East insurance industry shares a similar view. “If one company invests heavily in awareness campaigns, in essence, it will be doing the same for the whole industry,” as there is this idea that everyone will get a free ride and this is making companies more reluctant to invest in raising public awareness. He adds: “Most companies invest in brand awareness and because the market is not growing to its full capacity, we end up with a volatile market, dictated by price

and not quality. Moreover, the industry needs to act as one.”

Because of the sensitive nature of insur-ance, marketing cannot and should not be blind to the reality that is a lack of public awareness and, therefore, marketers find themselves with a moral dilemma, forced to try and strike a balance between their strategies.

In addition, insurance is an inter-dependent industry and hence, dialogue is key. Another major issue is that insur-ance companies are often perceived as untrustworthy and, as McClure says: “You can’t advertise your way out of this,” with recent studies showing that only 14 per cent of consumers either trust or believe in advertising. “Marketing in the region is still seen as ads on Sheik Zayed road,” he adds.

Many companies will soon start to realise

that the best form of marketing is improving customer experience. The actuality of the underlying tensions between customers and insurers is based on bad experiences and shortcomings in customer service.

So, what does the future hold for marketing in insurance? The long-awaited digital shift is on its way, since many companies are beginning to realise that a move away from billboards and bus stops to digital and emotional interactions with customers are key. However, without an improvement in customer experience, all marketing and advertising strate-gies will fall short. Generally speaking, there is an increasing vitality to ensure that a localised and personal relationship is built with customers. As mentioned earlier, companies cannot shy away from the fact that insurance is a promise and the more they distance themselves away from the local community, the more they will isolate their businesses and damage their market shares.

“If one company invests heavily in awareness campaigns, in essence, it will be doing the same for everyone...”

© C

orbi

s


visit our website: www.fleminggulf.com

organised by

4th AnnuAl Middle eAst & AfricA

insurAnce suMMit20 –21 January 2014 | dusit thani, dubai, u.a.e.

• Over 8 CEOs

• Intriguing Panels

• Relevant Case-studies

• Participation from industry leaders

• Networking Sessions

• Over 20 presentations

• Over 150 delegates

Mohor Mukherjee

t +971 4609 1570

f +971 4609 1589

e [email protected]

CONTACT US NOW!

Gold SponSor ExhibitorSrEGulatory and adviSory partnEr

MEdia partnEr


SPECIAL REPORT I EXPO 2020

© C

orbi

s

40-44-POL-66-UAE Expo.indd 40 1/15/14 12:54 PM


Dubai will host the World Expo 2020 under the theme ‘Connecting Minds, Creating the Future’, with three sub

themes – mobility, sustainability and oppor-tunity – which represent the key drivers of global development. As with any industry, insurance is also set to reap the benefits that the event will bring. However, during difficult economic periods, such as the present time, how can companies benefit from having a good credit insurance policy?Euler Hermes, a subsidiary of Allianz Group and world leader in credit insur-ance, facilitates trade and exports. Getting paid on time and access to required finance are two major prob-lems that traders are facing today. Practical and reliable tools linked to the actual economy are, therefore, needed to tackle these situations.

Trade credit insurance is one of these tools, as it protects companies against payment defaults and provides them with a powerful, long-term solution to assess new prospects.

By evaluating and constantly moni-toring risks, credit insurance will be able to direct businesses of insured companies towards reliable markets and clients that allow them to achieve stable, long-lasting growth.

Credit insurance policies also enable insured companies to obtain credit lines and related cost-effective facilities from banks and financial institutions, which improve a company’s creditworthi-ness. Euler Hermes’ AA- rating by S&P serves as a guarantee to a credit insti-tution providing adequate facilities for working out capital requirements for its policyholders.

The GCC region’s credit insurance market is poised for growthThe credit insurance market of the GCC region reached record levels in 2012 in terms of earned premiums ($56 million), recording a growth rate of 38 per cent, when compared with the previous year.

Euler Hermes is a market leader

By Massimo Falcioni, CEO of the GCC region at Euler Hermes

CREDIT INSURANCE TO GROW EN ROUTE TO EXPO 2020


Credit insurance policies enable insured companies to obtain credit lines and cost-effective facilities from banks...




with a share of 49 per cent and on the basis of data collected in Q3 2013, it expects the market to continue growing at the same rate in 2014.

Saudi Arabia and the UAE will drive the development of credit insur-ance together with Qatar, which will play a fundamental role because of its numerous economic development initi-atives undertaken through exporting oil-based products all over the world.

The winning of the World Expo 2020 bid reflects positively on the UAE’s overall economy, but the most significant

impact will be felt in the infrastructure, tourism, transport, technology, finance and property sectors. The tourism and travel industry will also see significant developments in the second half of the current decade, which will transform the country into a global tourist destination.

For the first time in the history of the event, visitors from abroad during the World Expo 2020 will constitute between 70 per cent to 75 per cent. Dubai will attract further investments in all sectors, including public trans-port services, restaurants, retail trade,

transport and telecommunications, and a footfall of 25 million visitors, including 19 million from outside, throughout the six months of events and activities.

The three sub themes of the event – mobility, sustainability and opportunity – symbolise all that Dubai stands for. As individuals, professionals and corpo-rate entities, our role is to strengthen the bond and help realise the goals and commitments of all those who are dreaming big about building the future.

Euler Hermes GCC will be supporting entrepreneurs, SMEs and large multina-tional corporations conducting their busi-nesses wisely and expanding into new markets using world-leading trade credit insurance solutions. Expo 2020 will not

The credit insurance market of the GCC region reached record levels in 2012 in terms of earned premiums...

© C

orbi

s




0%10%20%30%40%50%60%70%80%90%

100%

only bring advancement in infrastruc-ture development and further economic growth, but awareness about the expo is also bringing about an enormous sense of pride to the UAE as a nation and the GCC region in general. The country will gain international exposure and an oppor-tunity to further its reach to the world.

Sustainability is one of the three core themes of Expo 2020, which is set to play a key part in the infrastructure of the Dubai event site. According to the planners, it will use at least 50 per cent of the energy that it will be generating, which will include photovoltaic tech-nology, whereby electrical currents will be produced using solar energy. In line with Dubai’s expo transport policy, it

will also be a zero emissions site. Although the UAE is currently one of the world’s biggest carbon emitters, an emphasis that will be placed on sustainability over the next seven years in the lead-up to the 2020 event, which will, no doubt, promote this fundamental issue within the UAE and help communicate the need for a sustain-able lifestyle on a global platform as well.

After the event, the site is to be recy-cled to be used as a research centre and university based around the study of the aims related to the expo, which includes sustainability. This development, in particular, could help many generations benefit in the quest for sustainability.

Perhaps the biggest person set to gain from Expo 2020 is ‘you’, the resident of

Dubai. With a focus on sustainable development and transport infrastruc-ture that will boost the local finan-cial market, the long-term benefits of hosting the expo will, undoubtedly, be felt by those living in the city.

The UAE is set to succeed in its growth path, as shown to the

Euler Hermes expects economic growth of the UAE to continue showing a positive trend in 2014.




world for the past 42 years, due to the strong, visionary leadership of its rulersThe globalisation of commercial trade is growing at a faster rate every year, representing the true driving force behind world economic growth.

In fact, world trade increased by 4.1 per cent in real terms last year (GDP rose by 2.5 per cent) and is set to rise by 5.9 per cent in 2014 (with an expected GDP growth of +3.2 per cent). However, the global economic climate remains uncertain and risky.

Euler Hermes predicts that corporate insolvency index, which increased by eight per cent in 2013, will reach two per cent in 2014. The datum is affected by the weak financial situation in southern European economies, where the insol-

vency index rose by 33 per cent in 2013. Within this context, short-term commer-cial credit management is becoming an increasingly important strategic lever in business management, as credit insur-ance cover can provide protection against payment defaults.

The UAE: A global hubThe UAE stands out as a unique leader in world trade. However, a weakened Eurozone, the Arab Spring and interna-tional sanctions on Syria and Iran have led to a redistribution of trade dynamics.

The UAE was the first country to benefit from these events, acquiring the most out of trade, due to its political stability and openness towards inter-national trade with the neighbouring continents, Africa and Asia.

Euler Hermes expects that economic growth will continue to show a positive trend in 2014, which recorded a growth of +4 per cent last year, after a +4.4 per cent increase in 2012.

Moreover, GDP growth will also be supported not only by the production and exportation of oil, but also by the non-oil sectors, such as consumer electronics, chemicals, pharmaceutical, cosmetics, automotive, tourism, food and financial services. The excellent leadership and strong vision of the UAE’s rulers is one of the main reasons for its economic development and diversification from the traditional oil sector.

Moreover, the strategic geographic location in proximity with two rapidly developing continents, cheap labour and energy costs, low taxation and increased investments in infrastructure projects, such as airports, ports, industrial areas, make this country a natural hub for the economic growth of any business.

The globalisation of commercial trade is growing at a faster rate every year...

© C

orbi

s



SPECIAL REPORT I QATAR NATIONAL HEALTH INSURANCE

© C

orbi

s

46-50-POL-66-Qatar Health Insurance.indd 46 1/15/14 12:55 PM

Qatar National Vision 2030 sets out the government’s goal of improving the health of the country’s population,

by developing a world-class and integrated healthcare system. In furtherance to this goal, a national health insurance scheme – accessible to all citizens, residents and visi-tors – is in the process of being implemented in five phases. Phase one of the health insur-ance scheme was launched in July 2013. Its introduction follows the implementation of compulsory health insurance regimes in Saudi Arabia (2004) and Abu Dhabi (2006), with Dubai in the process of executing its delayed regime. While the lawmakers and regulators involved may have common aims, the nature of the schemes established to date means that the impact on the private health insurance market in each jurisdiction differs. We look at what the Qatari health insurance

regime is likely to mean for its private health insurance market.

As the population of Qatar is expected to rise to four million by the end of the decade, the government has clearly indi-cated that expanding health coverage in the country is necessary to achieve the following fundamental pillars of its health insurance scheme:1. Giving the whole population access to first-class healthcare2. Increasing the quality and range of healthcare services3. Introducing increased competition from private healthcare providers, thereby rising the choices available to patients.

The health insurance regime was enacted through the issuance of law no. 7 of 2013, concerning the social health insurance scheme. The health insurance

law was published in the official gazette issue no. 10, dated June 16, 2013.

Article 5 of the health insurance law tasks the Supreme Council of Health (SCH) with the responsibility, supervision and development of the health insurance scheme. Separately, article 19 of the health insurance law tasks the National Health Insurance Company (NHIC) with the “actual implementation and management” of the national health insurance scheme.

The NHIC is a fully owned govern-ment entity, with a board of directors comprising representatives of the SCH, Ministry of Finance, Ministry of Labour, Ministry of Interior, Central Municipality Council and two members from the private business sector. Its powers are described in more detail in article 20 of the health insurance law.

By Wayne Jones, partner at Clyde&Co

LEGAL UPDATE: QATAR NATIONAL HEALTH INSURANCE






Minister of public health and secre-tary-general of the SCH is tasked with issuing the ‘executive regulations’ of the health insurance law pursuant to article 29. The executive regulations were issued in the official gazette issue no. 16, dated October 28, 2013. As such, these shall be the subject of our forthcoming article to be published in the next issue.

The publication of the executive regu-lation will enable healthcare providers and health insurance firms to determine how best to participate in the national health insurance scheme. The health insurance law envisages a package of prescribed basic healthcare services requiring mandatory insurance cover, which will fall under the SCH’s regula-tory mandate.

The NHIC has appointed Al Khaleej Takaful as its third-party administrator to handle essential administrative proc-esses and support building its capabili-ties. Aetna and GlobeMed have been

appointed as exclusive sub-contractors of the third-party administrator.

Aetna, a US-based international health insurance company, will provide the NHIC with a range of health management services, including clinical management and disease management.

Meanwhile, GlobeMed, a leading healthcare benefits management firm in the Gulf region, will organise enrolment, claims administration and the NHIC’s call centre capabilities, among other functions.

ImplementationThe health insurance scheme is to be rolled out in five phases up to 2015, as per Table 1.

The SCH has indicated that expatriates (non-national residents) will be enrolled in the health insurance scheme upon the renewal of their residence permits through the payment of premiums, which is to be covered by their employers or sponsors. Beneficiaries of the health insurance scheme will be able to obtain services

from both public and private healthcare providers.

The following seven healthcare providers are currently participating in the scheme, as of the date of this update:1. HMC Women’s Hospital2. Al Emadi Hospital3. Doha Clinic Hospital4. Al Ahli Hospital5. Al Wakra Hospital6. The Cuban Hospital 7. Al Khor Hospital

The SCH has indicated that nearly 5,000 Qatari women have made use of the health insurance scheme as of July 2013. As each new category of benefi-ciaries is eligible to enter the scheme, presentation of one’s Qatari ID card will suffice to allow citizens and residents to obtain healthcare services.

Health insurance premiumsArticle 13 of the health insurance law states that the Qatari government shall be responsible for paying health insur-ance premiums for nationals. It is also more likely that it will cover the health insurance premiums of Gulf Cooperation

Beneficiaries of the health insurance scheme will be able to obtain services from both public and private providers.




0%10%20%30%40%50%60%70%80%90%

100%

Council (GCC) nationals as well, however there is no indication of this in the health insurance law.

Stakeholders will also be interested to know that employers and sponsors are responsible for paying health insurance premiums for their employees (and their families) and sponsored persons respec-tively. Visitors are responsible for paying their own premiums for the duration of their stay in the country, which will be payable prior to the issuance or upon renewal of their visas pursuant to article 15. Article 18 prohibits employers and sponsors from recovering any health insurance premiums from employees (and their families) or sponsored persons respectively. Employers and sponsors are eagerly awaiting further guidance on the amount of health insur-ance premiums payable under the health insurance scheme.

There will also be a period between the launch of phase one and phase four, whereby it will work concurrently with private health insurance. The SCH has indicated that: “This period is designed to allow employers the time to reconcile the coverage of employees between their existing health insurance plans and national health insurance scheme. By removing the elements of double coverage, they can recover the portion of fees paid for their existing plans.”

The amount of health insurance premiums shall be based on “generally accepted actuarial principles” to be paid in accordance with the ratios and meas-ures prescribed in the executive regula-tions pursuant to article 12. It would appear that the SCH is responsible for setting the amount of health insurance premiums, as per article 14.

In order to avoid potential increases in prices of healthcare services during the implementation phase of the health insur-ance scheme, the SCH has instituted a moratorium on price increases for health-care services offered by private healthcare providers until the health insurance scheme is fully implemented.

According to SCH circular no. 7 of 2013, it has indicated that: “All private health-care facilities in Qatar should comply with the price list approved by the department of healthcare quality and patient safety. Furthermore, the department will not accept any price increase requests for health serv-

ices provided by all health institutions in the country, until the completion of the appli-cation of the heath insurance system. The only exception to this decision is adding new medical services after getting the approvals required by the department.”

Two types: Basic and additional health insurance servicesArticle 1 of the health insurance law distinguishes between ‘basic health serv-ices’ and ‘additional health services’.

Basic health services are defined as “a range of healthcare services that shall be provided to the beneficiaries in accordance with the provisions of this law”. Addi-tional health services are described as “a

range of healthcare services that may be provided, in addition to the basic health services, to the beneficiaries in accord-ance with the provisions of this law”.

Insurance cover for basic health serv-ices will be mandatory for all Qatari nationals, GCC nationals, residents and visitors pursuant to Article 2 of the health insurance law. According to the executive regulations, which are yet to be published in the official gazette, basic health serv-ices include preventative, therapeutic and rehabilitative services and medical tests, as per Table 2.

Under the law, it appears that insurance cover for all basic health services will be provided by the NHIC alone. Accredited

PHASEDATE OF IMPLEMENTATION

GROUPS COVERED SERVICE COVEREDPROVIDERS IN THE NETWORK

1 July 2013 QATARI WOMEN AGED 12+ GYNAECOLOGY, OBSTETRICS, MATERNITY AND RELATED WOMEN'S HEALTH CONDITIONS

HMC WOMEN'S HOSPITAL, AL EMADI HOSPITAL, DOHA CLINIC HOSPITAL, AL AHLI HOSPITAL AL WAKRA HOSPITAL, THE CUBAN HOSPITAL, AL KHOR HOSPITAL

2 Q1 2014 ALL QATARI NATIONALS ALL SERVICES SELECT HMC AND PRIVATE PROVIDERS

3 Q3 2014 ALL QATARI NATIONALS ALL SERVICES SELECT HMC AND PRIVATE PROVIDERS

4 Q1 2015 ALL QATARI NATIONALS, WHITE -COLLAR EXPATRIATES AND VISITORS

ALL SERVICES SELECT HMC AND PRIVATE PROVIDERS

5 TBD 2015 ALL QATARI NATIONALS, WHITE -COLLAR AND BLUE COLLAR EXPATRIATES AND VISITORS

ALL SERVICES SELECT HMC AND EXPANDED PRIVATE PROVIDERS + 3 DESIGNATED PURPOSE BUILT SINGLE MALE LABOURERS' HOSPITALS

QATARI NATIONALS RESIDENTS (NON-NATIONAL) VISITORS

GENERAL MEDICINE SERVICES GENERAL MEDICINE SERVICES ACCIDENT AND EMERGENCY SERVICES

PREVENTATIVE HEALTH CARE SERVICES PREVENTATIVE HEALTH CARE SERVICES

ACCIDENT AND EMERGENCY SERVICES ACCIDENT AND EMERGENCY SERVICES

INPATIENT AND OUTPATIENT SERVICES, INPATIENT AND OUTPATIENT SERVICES,

LABORATORY RADIOLOGY AND MEDICAL EXAMINATION SERVICES

LABORATORY RADIOLOGY AND MEDICAL EXAMINATION SERVICES

PHARMACY SERVICES PHARMACY SERVICES

BASIC DENTAL AND VISION SERVICES, BASIC DENTAL AND VISION SERVICES,

MATERNITY AND DELIVERY SERVICES MATERNITY AND DELIVERY SERVICES

TREATMENT OF NEUROLOGICAL DISORDERS AND DISEASES

TREATMENT OF NEUROLOGICAL DISORDERS AND DISEASES

HOME HEALTH CARE AND PRIVATE NURSING

HOME HEALTH CARE AND PRIVATE NURSING

SPEECH DISORDERS OCCUPATIONAL DISEASES AND PALIATIVE CARE

SPEECH DISORDERS OCCUPATIONAL DISEASES AND PALIATIVE CARE

ORGAN TRANSPLANTATION

DEATH AGONY CARE

DURABLE MEDICAL DEVICES

INFERTILITY TREATMENT AND FAMILY PLANNING

TABLE 2

TABLE 1




health insurance companies will be enti-tled to offer insurance cover for additional health services (ie the private insurance market will not be entitled to offer cover for basic health services).

To participate in the health insurance scheme, healthcare providers will be required to obtain the SCH’s approval to offer some or all of the basic health services. The executive regulations, pursuant to Article 9, shall specify the conditions and controls for healthcare providers to subscribe to the health insurance scheme. General-secretariat of the SCH is tasked with making recommendations to the minister and the SCH on the amount of any co-payments that may be payable for basic health services.

Article 10 indicates that employers and

sponsors may provide their employees and sponsored persons respectively with additional health services through private medical insurance, in accordance with the ‘controls’ to be set forth in the executive regulations.

Article 11, meanwhile, reveals that the SCH shall issue licences to health insurance providers to market and sell insurance policies with respect to additional health services, which is in accordance with the licencing condi-tions set for the executive regulations.

Limited access for private insurersThe health insurance scheme is clearly a significant step by the Qatari govern-ment to overhaul healthcare funding in the country. The system put forward by the health insurance law contemplates

an employer- funded fee-for-service proposal, with the government bearing the costs for Qatari nationals. In this sense, it is similar to the schemes insti-tuted in Abu Dhabi and Saudi Arabia.

However, opportunities for private healthcare insurance providers (and service providers, such as brokers and TPAs) will be restricted solely to offering cover for additional health-care services. Since NHIC will be the mandatory provider of health insurance with respect to basic health services, opportunities for the private sector are likely to be extremely limited.

This means that the introduction of compulsory health insurance in Qatar will not produce a steep increase in private sector insurance premium, which was the result following the introduction of the Abu Dhabi and Saudi Arabian schemes, and thus, the prospects for new opportunities and growth in this area will be significantly less.

The issuance of the executive regu-lations will assist all stakeholders in understanding how the health insur-ance scheme will be implemented and the effect it will have.

Employers and sponsors will be inter-ested in knowing the costs that they will incur and the coverage available. Health-care providers will, similarly, be eager to know the types of coverage and fees they can charge under the new regime.

Health insurance providers should also prepare for fundamental changes in the manner in which the Qatari healthcare industry operates and they will be keen to know the prices of healthcare serv-ices, premiums payable, types of prod-ucts they may offer and market under the new scheme. Unfortunately, given the dominant role of the new NHIC in being the only provider of insurance cover for basic health services, the knock-on effect for Qatar’s private insurance sector is likely to be extremely limited.

Note: All Qatari laws quoted in this article are issued in Arabic and there are no official translations. For the purposes of drafting this feature, Clyde & Co formulated its own translation and interpreted the same in the context of Qatari laws, regulations and current market practises.

The issuance of the executive regulations will assist all stakeholders in understanding how the scheme will work...


10th Anniversary

10 & 11 February 2014, The Gulf Hotel, Kingdom of Bahrain

Strengthening the Regional Insurance Industry:Overcoming Intensifying Competition & Capturing Profitable Growth

Strategic Partner

re-inSurance Partner

conference Luncheon hoSt Day 2

goLD Strategic Partner& gaLa Dinner hoSt

aSSociate Partner

the inSurance Society Partner

SuPPorteD By

MeDia aSSociate

unDerwriting Partner

inforMation Partner

conSuLting Partner

caPtive inSurance Partner

MEIF: For 10 Years the Region’s Largest and Most Influential Annual Gathering of Insurance Industry Leaders

ratingS Partner

MEIF is a MEGA BrandMEGA Brands. MEGA Clients. Market Leaders. Shaping the Future of the Middle East Finance Industry Since 1993

SiLver Strategic PartnerS

goLD Strategic PartnerS

PLatinuM Strategic PartnerS

to participate in this prestigious event, please contact: [email protected]:+971 4 343 1200 • f:+971 4 343 6003 • middleeastinsurance.megaevents.net

MEIF2014_eBROCHURE_ad.indd 1 12/30/2013 5:02:49 PM


When Aneurin Bevan oversaw the crea-tion of the British National Health Service after the Second World War,

his aim was to ensure that the whole popula-tion had access to healthcare. Although the recent announcement by the Dubai Health Authority (DHA) regarding mandatory health insurance does not share the same socialist rhetoric, the aim is mutual; healthcare for all. Such developments can only bestow as a positive illustration of Dubai’s intentions in the years to come. The truism that health-care is the backbone of society is by no means a cliché and as Dubai follows in the footsteps of its shoreline neighbour, it will be interesting to see the impact it will have on both consumers and the industry.

Specific details of the new legislation are yet to be confirmed or communi-cated, but we do know that it will be

rolled out in phases, aiming to be in full swing by 2015 to 2016. Although the new system means even low-paid employees will have access to healthcare, fears of price wars, medical inflation and capacity pressures threaten the industry.

In an attempt to underscore the affect of this scheme from both brokers’ and insurers’ perspectives, POLICY speaks with AXA Gulf’s CEO, Jérôme Droesch, and Earnest Insurance Brokers’ managing

director, Samuel Thakkar. We ask the following questions: Are smaller players going to get overwhelmed in an already demanding market? Are regulators going to struggle to contain medical inflation within reasonable limits? More impor-tantly, will compulsory health insurance stimulate awareness and allow other lines of the insurance business to grow?

Droesch expresses his views on the subject by saying: “We have had two

regional evolutions in Abu Dhabi and Saudi Arabia, and because health is the most important line of busi-ness, this is very good news. It is also great news for citizens, regardless of how the system will be implemented. Moreover, it is the direction we need to be going in preparation for the Expo 2020. Most international companies

The recently announced scheme is another step in the right direction for the emirate, but drastic changes, such as this, do not come without a cost. POLICY explores the effects – good or bad – it will have on the insurance industry.By Hossam Abougabal

ENGINE OF SOCIAL JUSTICE: MANDATORY HEALTH INSURANCE IN DUBAI


“We have had two regional evolutions in Abu Dhabi and Saudi Arabia, and because health insurance is the most important line of business, this is very good news.”




are already insured, but for many other local, SME and individual firms, there will be an impact and we will see growth from these groups, as well as other blue-collar workers.” He also talks about his admiration for the new legislation, and almost dismisses the details of pricing and healthcare capacity by sharing his excitement about Dubai putting in place a system that ensures everyone is insured.

Thakkar, on the other hand, talks about his qualms with the idea of phasing in the legislation over three years, feeling that it could have been completed quicker in order to assist those who may need it sooner. “Only the third phase will affect small companies,” he says. Concerned

with the timing of everything, Thakkar makes a point that blue-collar workers are the ones who need this law the most. Droesch agrees with Thakkar and adds: “Often people who could not afford medical insurance were waiting until they could go back to their home coun-tries to get the right treatment and this will now change.”

Either way, it is difficult to argue about any negative affects on consumers, even if prices do inflate as a result of increased demand. “Although prices may go up, this will be linked to general inflation, which will not just be in the medical sector or the insurance industry. Also, innovation in medicine costs money, which is good,

but it does come at a cost. And insurance companies will try to neutralise these costs,” says Droesch.

Therefore, it seems that any increase in price will, in essence, be coming out of an improving healthcare landscape, rather than companies poaching for more profits. That being said, Droesch does recognise the need for regulators to keep an eye on medical inflation to ensure that it doesn’t become damaging for insurers and customers.

Further to medical inflation, Thakkar points out his concerns regarding Dubai’s healthcare capacity in general. “Insurance for all will mean treatment for all and I am not sure whether Dubai is equipped. But, of course, this will develop over the years, but, right now, we need more hospitals,” says Thakkar. Even Droesch, who is extremely optimistic with the new

“Although prices may go up, this will be linked to general inflation, which will not just be in the medical sector...”

© C

orbi

s




0%10%20%30%40%50%60%70%80%90%

100%

plan, is concerned with “the question of whether medical providers will have the capacity to deliver”.

Moreover, there is a question of whether smaller companies will have the ability to keep up with the increased demand. “For sure, all of the players will try to get their slices. The biggest players will have enough to be prepared, but, on the other side, smaller players may struggle, particularly with IT. They will either try to do it themselves or through third parties,” adds Droesch. It will, there-fore, be interesting to see whether smaller companies get enticed by the increase in demand in the market and, as a result, fail due to their inabilities to facilitate such large volumes.

With living costs spiralling out of control in the city, the question of pricing has become extremely relevant

for both companies and consumers. The basic cover for each person has been placed at a minimum of AED500 to AED700. Although this seems afford-able for consumers, as Thakkar points out, low prices can have adverse affects on the quality of service and treatment received. “Low prices have a shorter life cycle,” says Thakkar. It is, there-fore, extremely important to strike a balance between cost effectiveness and the quality of service.

In conclusion, it seems that even with the fears of pricing, medical inflation and capacity, the new legislation is exactly what Dubai needs to place itself on the world stage of developed cities. There are, of course, problems that regulators must begin to face, particu-larly relating to healthcare providers. Ensuring that medical inflation is kept within reasonable limit and that the industry works together with medical providers to achieve low prices, it’s

important to make certain that basic covers do not undermine the quality of treatment. That said, the legislation is not flawless and many in the industry are sure that with time, the scheme will develop into exactly what the city needs to move forward and continue to be a magnet for best professionals from around the world.

It is, of course, extremely important to strike a balance between cost effectiveness and the quality of treatment.


INDUSTRY DIRECTORY I CLASSIFIEDS


CONTINENTAL GROUPContact Person: Akshay SardanaAddress: P.O. Box: 26588, Dubai, UAETel.: +971 4 335 3433Fax: +971 4 335 2553Email: [email protected]: www.continental-intl.comThe Continental Group is a leading insur-ance intermediary and financial services solutions provider in the region. Licensed by the Central Bank of UAE and the UAE Ministry of Economy, we repre-sent reputed multinational and local insurance and financial institutions.

At Continental, we realise that financial solutions are as diverse as your needs, and no one solution can serve everyone. Driven by the philosophy of building long-term, mutually beneficial relationships with our customers, we specialise in providing personalised solutions through a qualified and experienced team of consultants.

With more than 14 years’ experi-ence in the UAE and a large client base, we stand proud as one of the leading players in the financial services arena.

EXPAT SERVICES GMBH DUBAI BRANCHContact Person: Roula FinkbeinerAddress: P.O. Box: 112354, Dubai, UAE Tel: +971 4 453 4749Fax: +971 4 453 4746Email: [email protected]: www.esdb.ae Expat Services GmbH, located in Hamburg, Germany, provides unique insurance products for companies and employees.

ESDB offers unique insurance products for individuals and companies. A health insurance portfolio is available called the Expat Series. These products are insured through Emirates Insurance Company, while HanseMerkur Reiseversicherung (Hamburg, Germany) as reinsurer carries 100% of the risk. Administration is carried out by ESDB. Claims are handled by a locally designated TPA.

NEXUS INSURANCEBROKERS LLCContact Person: Tarun Khanna,Deputy Chief ExecutiveNexus Group Address: P.O. Box 124422, EmaarSquare, Building No. 1, Fourth Floor,Office No. 402, Dubai, United Arab Emirates.

Tel: +971 4 323 1111Fax: +971 4 323 1112Email: [email protected]: www.nexusadvice.comNexus, with a world class pedigree that goes back over 20 years, is one of the largest independent financial advisory busi-nesses in the GCC region, with offices in Abu Dhabi, Dubai, Bahrain, Qatar, Lebanon and Kuwait. Nexus employs over 345 highly trained authorized Financial Consultants, providing bespoke “One stop shop” insur-ance and financial planning solutions to individuals and businesses of all sizes, meeting their specific needs. Nexus is committed to ‘Best Practice’ maintaining the highest levels of professional stand-ards which is achieved through continuous training and development of all Nexus consultants within the framework of the Chartered Insurance Institute (CII). Nexus continues to develop its business through organic growth and geographical expan-sion addressing the insurance needs of its clients by creating and deepening a relation-ship of professional trust and improving its range of products and services.

INSURANCEGENERAL

AIG MEA LIMITED Contact Person: Richard SchofieldAddress:The Gate Building, West Wing, 11th Floor, DIFC, Dubai, UAETel: +971 4 362 1700 Fax: +971 4 362 0841Email: [email protected]: www.aig.com AIG is a global insurer with 88 million customers in over 90 countries around the world. The businesses that make up AIG are leaders in their markets: property casualty insurance, life insurance and retirement services, mortgage insurance and aircraft leasing. They are focused, responsive, innovative, and committed to delivering on AIG’s promises to our clients.

AXA INSURANCE GULFContact Person: Alexis de BeauregardChief Officer - Marketing and RetailProduct OfferingAddress: P.O Box 5862, Dubai, UAEFloor 39, Churchill Executive Tower, Business BayTel: +971 4 447 6111Fax: +971 4 429 1380Email: [email protected]: www.axa-gulf.com

About AXA in the GulfWith a workforce of over 700 employees, 12 offices region-wide, more than 500,000 customers and a gross written premium of over US$ 500 million, AXA is the largest inter national non-life player in the GCC offering a wide range of insurance products and services for corpo rate, SMEs and indi-vidual customers. AXA Gulf was recently awarded Insurer of the Year 2011 at the MENA Insurance Awards and Best Motor Insurance provider at the Car Awards 2010. About the AXA Group AXA Group is a worldwide leader in insur-ance and asset management, with 216,000 employees serving 93 million clients. In 2010, IFRS revenues amounted to Euro 91 billion and IFRS under lying earn-ings to Euro 3.9 billion. AXA had Euro 1,104 billion in assets under manage-ment as of December 31, 2010.

GREEN CRESCENT INSURANCE COMPANYContact Person: Zienah HakimAddress: Abu Dhabi P.O. Box: 63323Tel: +971 2 408 4700Fax: +971 2 445 8717 DHCC, DubaiP.O. Box: 505152Tel: +971 4 439 1400Fax: +971 4 439 1411Toll Free: 800 MY GCIC (800 69 4242)Email: [email protected]: www.green-crescent.comGreen Crescent Insurance Company was founded in 2008 as a PJSC funded by a paid-up capital of AED 250 million. Green Crescent currently operates in the UAE, providing tailor-made health and life insurance solutions to groups and corporate clients. What we offer is a commitment to providing our clients world-class healthcare on a global basis by using product innovations, technology, and a network of leading healthcare providers.

ZURICH INSURANCE MIDDLE EAST S.A.LTel: +971 800 ZURICH (987 424)Website: www.zurich.com/middleeastZurich is one of the world’s largest insur-ance groups. Our mission is to help our customers understand and protect themselves from risk. With over 60,000 employees serving customers in more than 170 countries, we aspire to become the best global insurer as measured by our customers, employees and shareholders.

Zurich has served the insurance needs of customers in the Middle East for over twenty five years. Our customers are at

the heart of all we do, and we take the time to understand their needs so we can develop products that are right for them and protect their most valuable assets.

In the Middle East, Zurich’s busi-ness is split into two segments: Life Insurance and General Insurance.

Zurich’s Life Insurance business provides individual customers with solu-tions to their international protection, investment, retirement and savings needs, and supports corporate customers with their organisational protection, savings and retirement needs. We have offices in the United Arab Emirates, Bahrain and Qatar.

Zurich’s General Insurance business provides motor, home and travel insur-ance to personal customers, as well as motor fleet, property, casualty, profes-sional indemnity, marine, financial lines, energy and engineering insurance to small and medium-sized businesses in addition to large corporate customers. Our General Insurance business has offices in the United Arab Emirates, Lebanon, Oman, Kuwait and Bahrain.

IT SUPPORTSOLUTIONS

AGILE FINANCIALTECHNOLOGIESContact Person: Shefali KheraAddress: PO Box: 503007, 808-A, Business Central Towers, Tecom, Dubai Internet City, Dubai, UAETel: +971 4 433 1825Fax: +971 4 435 5709Email: [email protected]: www.agile-ft.comAgile Financial Technologies is a leading technology solution provider that offers software, technology services, busi-ness and knowledge process outsourcing services. Agile FT’s portfolio of software products cover Policy Administration/Underwriting, Claims, Re-insurance, Accounting and Investment Management for General & Life Insurance, Takaful, Health Insurance, Insurance Brokers and Bancassurance divisions of banks.

NEST INNOVATIVE SOLUTIONS PVT. LTDContact Person: Arindam SahaAddress: 4th Floor, NP-222, Sector-V, Salt Lake City, Kolkata- 700102, West Bengal, IndiaTel.: +91 33 65348884, +91 33 23671119Mob: +91 9830657459Email: [email protected]

BROKERS

56-57-POL65-Classified ok.indd 56 1/15/14 1:00 PM

Nest Innovative Solutions offers Business Solutions to the Insurers in the areas of distribution, customer relationship manage-ment and claims management. Insurers can use these product-based Business Solutions in their initiatives around easy growth, improvement of productivity and improvement of customer satisfaction.

Macaw, the product suite from Nest Innovative Solutions has comprehensive capability across different channels (e.g. direct, agency and bancassurance), across different devices (e.g. mobile phones, tablets, kiosks and web portals) as well as across different lines of business (e.g. motor, travel, home, fire and engineering).

Using a state-of-the-art architecture that combines new and emerging technolo-gies, these Business Solutions can deliver appreciable improvements of key ratios within quick time and affordable budgets.

REINSURANCE

GULF REGULF REINSURANCE LIMITEDContact person: Lucy Southworth,Office ManagerAddress: Dubai International Financial Centre, Level 6, Currency Tower, P.O.Box 506766, Dubai, UAETel.: +971 4 382 5712Fax: +971 4 382 5777e-mail: [email protected]: www.gulfre.comGulf Re has just reported a 15% growth in Gross Written Premium compared to the previous year and a Combined Ratio of 96.9% for financial year 2011. A very selective underwriting approach and a conservative invest-ment strategy has ensured the company was not affected by any of the major natural catastrophes of 2011, nor was it impacted by the Eurozone crisis.

In 2011 Gulf Re added marine and offshore energy as well as terrorism to its existing facultative classes of busi-ness and will announce further prod-ucts during the course of this year. As of 1 January 2012 the company also expanded its geographic reach for facul-tative business into the broader MENA region. This is in line with plans to grow the company, both in terms of product offerings as well as geographic scope. With a strong capital base, exceptional technical capabilities among staff and an exclusive focus on the Arab world, Gulf

Re is a stable and reliable partner to existing and new clients across the region as they endeavor to grow their business

Gulf Re is a privately held company based in the DIFC and regulated by the DFSA, equally owned by Gulf Investment Corporation (GIC) in Kuwait and Arch Capital Group (ACGL) in Bermuda and is rated A- by AM Best.

SAUDI RE Address: King Fahd Road, Bahrain Tower, P.O. Box 300259, Riyadh 11372, Saudi ArabiaTel: +966 1 201 9798Fax: +966 1 201 9787Website: www.saudi-re.comSaudi Re is a full-fledged coopera tive reinsurance company established in Saudi Arabia. With a BBB+ rating from S&P and a capital base of 1 billion Saudi Riyals (USD 267 million), Saudi Re is considered among the finan cially strongest reinsurers in the MENA region. Saudi Re offers comprehen sive reinsurance solutions to clients throughout the MENA region and beyond in facul tative and treaty both on propor tional and non-proportional basis.

ZURICH INSURANCE COMPANY LTD (DIFC BRANCH)Tel: +971 4 364 7325Website: www.zurich.com/middleeastZurich’s reinsurance business in the Middle East operates out of the DIFC and is regulated by the Dubai Financial Services Authority.

Zurich provides specialty products and solutions to large corporate customers and their local insurers through its Global Corporate division. The Global Corporate team is active in multiple lines of business including: Energy, Construction, Property, Professional Indemnity, Casualty, Marine, Management Liability and Financial Institutions.

Zurich underwriters and risk engineers work in partnership with our customers to understand their business and provide meaningful risk insight based on our industry experience and expertise. This allows us to create a best fit solution for our customers based on their needs in key areas such as operational and construc-tion risks, people risks and strategic risks.

As a testament to the hard work and commitment of our regional Global Corporate team, Zurich was named as Newcomer of the Year at the 2011 MENA Insurance Review Awards, and as Reinsurer of the Year at the 2011 Insurex Awards.

TAKAFULCOMPANIES

TAKAFUL EMARAT – INSURANCE (P.S.C)Contact Person: Mr. GhassanMarrouche, General Manager Address : Office No. 701-708, 7th floor, New Century City Tower,Port Saeed, Deira, Dubai P.O. Box 64341 – Dubai Tel: +971 4 230 9300Fax: +971 4 230 9333Email: [email protected] Website: www.takafulemarat.com Takaful Emarat is the first dedicated Shariah-compliant Life & Health Takaful insurance Company with head office in Dubai and branches in Abu Dhabi and Sharjah. The company offers takaful products to cater individual as well as corporate needs.

Takaful Emarat has a unique blend of regional and international insurance experience of its founders ‘Al Buhairah National Insurance Company’ one of the local insurance leaders and ‘UNIQA Group Austria’ a leading European insurance group.All products are verified for their Shariah compliance by the internationally known Shariah Scholars.

THIRD-PARTYADMINISTRATORS

MEDNET UAE FZ LLCContact Person: Dr SukumaraPrakash - General ManagerAddress: P.O. Box: 500259 Dubai Internet City, Dubai, UAETel: +971 4 390 0710Fax: +971 4 390 8600Email: [email protected]: www.mednet-uae.comMedNet has over a decade of local and International expertise in health insurance and managed care.

Our services to insurance companies include medical underwriting, network

management, claims and cost manage-ment, data management, product design and pricing ensuring high performance standards. We provide specialised healthcare services through free access plans and direct billing arrangements to our cardholders. MedNet means “Challenge for Better Healthcare”.

NEXTCARE AGHS LLCContact Person: Andre Daoud, Chief Business OfficerTel: +971 4 209 5200Tel: +971 4 2095303Email: [email protected]: www.NEXtCAREhealth.comNEXtCARE AGHS LLC is the leading “Third Party Administrator” (TPA) for the insurance industry in the GCC & MENA region. Since its establishment in 1999, the company special-izes in providing complete health insurance management and administration services to insurers and other healthcare payers providing the perfect balance between best customer service, maximum cost optimi-zation and compliance with regulators.

NEXtCARE operates the region’s first 24/7 medical and multilingual call center for a direct and partner network encom-passing over 7,000 credentialed and contracted provider facilities allowing cash-less access across various countries.

With more than 1.5 million members under management, the company admin-isters an annual portfolio of over USD 550 million claims in value and 4 million in claims in volume for more than 80 clients including insurance compa-nies and self-funded schemes. Being a member of the renowned Allianz Group, NEXtCARE creates and tailors health insurance management programs covering Customer Service, Risk Assessment Solutions, Managed Care Services, Software Solutions and Added Services. NEXtCARE employs around 700 employees, 90% of which are medical professionals located in its offices in UAE, Lebanon, ksKSA, Egypt, Bahrain, Oman, Qatar, Kuwait and Morocco.

TRAINING

To ensure your company’s details appear in this section please email: [email protected]

INDUSTRY DIRECTORY I CLASSIFIEDS

Get on the listTo ensure your company’s details appear please contact: Grace MarounSenior Business Development Manager - Direct Line: +971 55 607 8161 Fax Line: +971 4 390 8737 - email: [email protected] Price: US$1,950 per annum (six issues) which includes complete contact information and 50-60 words on your business activities

56-57-POL65-Classified ok.indd 57 1/16/14 5:06 PM

Random statistics and a look at the lighter side of the news


WHAT WERE THE CHANCES OF THAT HAPPENING?

A man who claimed for a holiday cancellation when he was refused entry on a flight was turned down when it emerged that his flight wasn’t from Manchester in the north west of England, but Manchester, New Hampshire in the US.

ANIMALS AND FOOD SEEM TO BE A PROBLEM

Freak incidents involving animals tops the list of the most bizarre claims made to insurer Norwich Union, with food-related prangs in second place. One unlucky driver claimed to be unable to slow down because a potato was lodged behind the brake pedal, while another stated that a passing vehicle was damaged by a frozen kebab that flew out of the open car door.

Sally Leeman of Norwich Union says: “We see a lot of strange claims, but we were surprised at how many involved animals and food, of all things.” SOURCES: INTERNATIONAL INSURANCE NEWS, DAILY MAIL, MSN, MEDIA

2012 Honda Accord

tops list of most stolen cars in

the US.

was the price of Sarah Outen’s cover to canoe

across the world.

$51Insurance contributes

approximately

for every person living in the US.

$2m

MAKE A RUN FOR IT

Mr Bloggs was driving home after Christmas shopping when, at a bend, he saw a car coming from the opposite side with a large Christmas tree insecurely attached to its roof.

He says: “The man was driving too fast and I saw the tree lift off and fly straight at me. Its trunk made a great dent on my bonnet and caused me to run off the road and into a hedge. The chap didn’t stop and never came back for his tree, so the police said we might as well take it. It wasn’t funny at the time, but looking back it was like a comedy sketch.”

WHAT ABOUT THE SHEEP?

A man named Carlton told his claims handler that he was driving home from the pub when a sheep landed on the bonnet of the car. “It had come from a lorry that had overturned on the bypass and, in fright, it jumped over the parapet,” Carlton said to her. He also kept insisting that he hadn’t been drinking.

The car was, of course, a write-off, but we just can’t stop wondering about what happened to the sheep.

58-POL-66-Bogus.indd 58 1/15/14 12:58 PM

Untitled-1 2 12/17/13 2:14 PM

Policy Q1 2014

Documents

Transcript of Policy Q1 2014