Saad Mered is the Middle East chief executive officer of Zurich Insurance Company and now holds the reigns at Compagnie Libanaise D’Assurances (CLA), after Zurich Insurance completed the acquisition in the fourth quarter of 2010. He recently gave EXECUTIVE his thoughts on the local market and why Zurich Insurance is breaking into the Middle East.
Why did you feel that Lebanon was the next country to add to your Middle East presence?
Compagnie LibanaiseD’Assurances is headquartered in Lebanon and has branch operations in the United Arab Emirates, Oman and Kuwait. So, for us, the acquisition is much more than adding another country to our Middle East presence. Our strategic aim is to be the leading multinational insurer in the Middle East; the acquisition of CLA is a key stepping-stone towards realizing this goal.
What is your assessment of the maturity of the Lebanese insurance sector and market?
Lebanon has one of the highest insurance density and penetration rates in the region. In Middle Eastern terms, its insurance industry is well established and Lebanon has long been recognized as a pool for insurance talent — this is reflected in the fact that there are a disproportionate number of insurance executives in the region that are of Lebanese origin. We hope to leverage and add to this talent pool.
What are the biggest challenges facing the Lebanese insurance sector?
With the heightened regulatory scrutiny that the Lebanese regulator has recently shown, the local market will need to adapt to a new environment, which we believe would benefit the sector overall. As in many markets the main challenge is also one of awareness: getting people and businesses to understand why insurance is, or rather should be, so important to them. For example, if a family was to suffer a fire or flood, the financial consequences could be devastating. People think about the big things like houses and cars and overlook the costs of replacing the small things such as clothes, children’s toys and other household contents.
The Lebanese insurance sector is known to be one of the least transparent sectors of the local economy. Do you feel that this is a hindrance to its success?
Whilst we can’t comment on behalf of the Lebanese regulator or the local insurance association, the Middle East insurance market in general is developing rapidly, and we fully support the need for a transparent and accountable sector as it continues to grow and mature.
What was your impression of the relevant regulatory bodies during your acquisition? Which regulators did you work with in this transaction?
We worked with the Lebanese regulator and also the regulatory bodies in Oman, the UAE and Kuwait. We maintain a good and positive relationship with them.