“The insurance industry has shown its resilience, because it is growing. When we drill down, we see that we have some very good professional companies that have good returns on equity and others that are losing a lot of money. On a strategic level, we have to consider recent acquisitions of [two Lebanese insurers by international companies.] So the industry is still attractive to outside players and Lebanon is attractive to be used as a jumping board into the rest of the region. This definitely shows how the insurance industry in Lebanon remains very resilient despite all the [country’s] problems.”
“Competition is one of the factors that have increased among insurers in the region, but instead of competing by offering good services, competition is focused on dropping prices with no justification. Unless there are mergers and acquisitions and incentives to consolidate, I don’t see a very bright future in the next three years for the regional industry and this includes Lebanon. Lebanon has a very large number of insurers and although the country has high insurance penetration and density when compared with the regional average, it is very low when compared with Western averages. We still have a long way to go and many brokers and insurance companies still have to learn how to do the business in an ethical and professional way.”
“The biggest worries that everybody has -— the rich and the not so rich — are to guarantee schooling for their kids, care in case of hospitalization and a decent retirement. This important segment of insurance demand is covered by the personal lines and this is the space where we are trying to do something. We have already been working for a while with education and retirement personal plans. These products are doing quite fine, with very acceptable results and I see the future here and with other personal plans.”
“Marine insurance in Lebanon is developing in step with the economy, based on imports and exports. It is not a good sign for the market that one is not able to insure business in Syria. For Lebanese cargo insurers the problem of sanctions against Syria, Iran and other countries is that it is not a clear-cut situation. You can insure many shipments while there is no claim. But it is not enough to [have an exclusionary clause in the policy and] say ‘under my policy I don’t pay a claim to a sanctioned party.’ It is also not sufficient to say ‘I will use Lebanese pounds to price a policy in insuring cargo to Iran’ because the US dollar cannot be used.”
“The Motor Risk Center is a good idea as it makes it possible to block the bad risks and drivers with bad profiles, like in other countries where high frequencies and severities of claims by certain drivers result in a malus. Having such a database in which all sector companies in Lebanon bring together the relevant information will help insurers to select proper risks and penalize bad ones through additional premiums or deductibles. I have urged my colleagues in the local insurance sector to join the Motor Risk Center by submitting their data.”
“There is a need to further develop professional insurance education in Lebanon. The overall level of insurance qualification is still quite poor, although it is better than in other countries of the region. There is a framework from the (United Kingdom-based) Chartered Insurance Institute and it is internationally recognized. We have been offering CII qualification programs with sponsorship from the Lebanese insurance association for three years and what has happened so far in this professional qualification has been quite fine. The number of companies who sent their employees has increased and the number of CII graduates has more than doubled since 2010. One can estimate that each insurance company has on average at least 10 persons working in middle management and senior staff positions where CII qualification offers a great advantage. If we multiply this number by 50 insurance companies, there is space for something like 500 people to qualify. We now have about 8 to 10 percent of these [who have enrolled in professional education] and there is still a big need.”
