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اقتصاد عربي وعالمي
منتى الاقتصاد العالمي - WEF الاردن
MARTIN SENN (GROUP CEO - ZURICH):
Insurance plays an important economic and
social role in risk pooling and risk management
Al Bayan Magazine met the Group CEO of Zurich Insurance Group, Martin
Senn, who talked about the purpose behind their participation in the World
Economic Forum. He also discussed, with our correspondent, his thoughts on
how the Middle East & North Africa region can attain sustainable economic
growth and stability, generate youth unemployment and diversify their
economies. Senn also talked about how the insurance industry can play a key role
in helping the MENA region to achieve these social and economic objectives.
Below is the account of the interview.
* What is the purpose behind your participation
in WEF?
- It is important to be here to get in-depth
insights into the region’s economic, political
and social issues and challenges, as well as a
deeper understanding of the region’s potential
and opportunities. In my function as a co-chair,
I will support the WEF in its activities by participating
in different forums where we bring
together opinion leaders, business leaders,
political leaders and social leaders to discuss
the challenges and opportunities – and also
how we can overcome these challenges and
realize the region’s potential . In addition, in
my personal participation as a Swiss national
based in Zurich, I will also provide an outsider’s
view of the region in the various forums
and panel debates that I will be speaking and
debating in.
* In your opinion, what is needed in the Arab World to create the conditions
required for economic growth and stability?
- First of all, the Arab World and the MENA region are not homogeneous. They are
very heterogeneous; a one-size-fits all approach would not work here. One of the
biggest challenges facing the region is how to create more economic dynamism and
diversification to generate greater employment opportunities, especially for the
youth of the region. This can be achieved by promoting and supporting new sectors
such as renewable energy, or invigorating existing sectors like tourism or manufacturing.
The region should also look at improving the skills of the workforce to meet
the needs of these industries. Not just educational training, but vocational training
too – like the successful apprenticeship programs in Germany, for instance. I would
like to see women given greater opportunities in the job market as they are an
underdeveloped resource across the region. More women in the workforce would
also boost economic growth. In addition, there should be a common understanding
and support between the rule of law, regulations, and a more positive interaction
between the private and public sectors.
* What is the role of insurance in the Middle East?
- The role of insurance in emerging economies is often not well understood and
underestimated. Insurance can promote economic development, create jobs and
boost trade across the MENA region. Insurance can help to transform the MENA
economies to address many of the economic and social challenges facing the
region, including helping nations to diversify and modernize their economies to create
sufficient employment opportunities for the young.
For fast growing countries in MENA, insurance supports the pace of economic
development and protects quality of life. It safeguards and rebuilds the foundations
of economic activity after unexpected loss, like in the wake of natural catastrophes.
Insurance can also play an important part in funding retirement solutions. It not only
provides long-term savings vehicles, but also addresses risks that might affect the
ability to save (i.e. disability) or living longer than expected (i.e. longevity risk) on
one’s savings. In addition, given the long-term nature of their liabilities, insurers are
ideally suited to provide finance for growth enhancing long-term investments.”
* Why do you think insurance is under penetrated?
- Despite the potential benefits of insurance, the industry is still in its infancy and
both penetration and density are low in the region compared to other global emerging
markets. This can partly be explained by cultural and religious factors that influence
insurance-buying behavior. Beyond that, trust in insurance is lacking, and
there is only a rather limited awareness of the benefits it offers. Furthermore, for
large segments of the population, insurance is often unaffordable. In addition significant
regulatory and public-related hurdles have hindered the development of a
strong and competitive insurance segment.
* What is your strategy in the MENA region?
From Right: Martin Senn, Emile Zakhour,
Saad Mered & Sean Mcallister
- We are looking to expand our footprint and
grow our business base globally. Diversification
is one of the key principles in any sort of risk
management approach. This region has 350
million people and positive economic and demographic
dynamics, which provides a great
opportunity for Zurich to build exciting new businesses
and diversify. This part of the world is still
growing, may be slower than before, but it is still
in a period of growth and so it remains an attractive
region for Zurich – alongside other emerging
markets such as Latin America, South Africa,
North East Asia and South East Asia. In the
MENA region we have a presence in Morocco
and six Middle Eastern countries – Bahrain,
Kuwait, Lebanon, Oman, Qatar and the United
Arab Emirates. We are growing our businesses
in each of these markets. We currently have no
presence in Saudi Arabia, but we are assessing
our options in this important regional economy.
* What is the added value that Zurich gave to the MENA region?
- The MENA region is growing and maturing and its markets our undergoing dynamic
changes, which require sophisticated insurance solutions. We feel Zurich’s
expertise and experience is key to providing these insurance solutions. Our aim is
to provide meaningful solutions to complex risk management demands of our customers
worldwide. We help them understand the risks that their businesses face,
and help them manage and mitigate those risks to ensure their business can continue
operation in the event of any adverse incident.
As a global insurer, we offer a broad portfolio of products, capabilities and relevant
solutions for our customers, offering expertise in many industries that is not widely
available in the region. There is also a strong need from companies in the MENA
region for an insurer that can provide greater capabilities, resources and expertise.
As a global insurer, we are in a unique position to fulfill these underserved needs
and exploit our strengths in the market.
* It is true that you are dumping prices to take market share away from competitors?
- We have a very disciplined approach in the way we write business. If we are gaining
market share it is on the back of our technical pricing and not because we are
trying to undercut the competition. Companies that only compete on price do not
have a sustainable business model, because when you dump price - you buy risk.
If you lower your prices to unacceptable levels then in the future you will not be able
to cover any losses due to an accident or natural catastrophe - let alone make a
profit. At Zurich, we do not compete on price. Our strategy is defined by who we are,
what we do, and how we do it. We want to increase our core insurance business by
providing excellent customer service and products.
* Are you satisfied with your results in the MENA?
- We have a very strong general insurance business in Morocco that for many years has
been growing at a pace faster than the market rate, yet continues to produce attractive
returns. In the Middle East, our general insurance business is still very young and it is
growing at an incredible rate. We still plan to continue to expand our distribution network,
product portfolio and service capabilities in the region, but I am very pleased with the
progress of the business. And, of course, we have a very mature life business in the
Middle East – covering the UAE, Qatar and Bahrain. It has been in the region for over 25
years and is the strongest life insurance brand in the region.
* Any last message?
- MENA is a region of potential and opportunity. Of course, it faces some tough political,
social and economic issues and challenges – as most emerging regions do.
But I prefer to focus on the positive aspects of the region and this is why Zurich
chose to invest in MENA. I also believe Zurich, and the entire insurance industry,
can play a role to help the region fulfill its potential by promoting economic development,
creating jobs and boosting trade.
٦١ AL BAYAN ECONOMIC MAG - ISSUE 500 - AUGUST 2013