26 CLIENT PERSPECTIVE: ASIA INSURANCE

this is normal, but flexibility is a requirement as the market is still new to insurance. It is therefore tak-ing us considerable time to advise clients on risk im-provement compatible with the required reinsurance coverage. Two years ago for example, for a risk you would see more than 20 or 30 participants who are willing to offer capacity. Now you just see 10 instead of 30, so the number of reinsurers who show ap-petite is very limited. The gap between information required and the standards of the market is massive. MIR: How has Asia Insurance handled these chal-lenges?JA: As a result of instability, companies have mini-mised their operations as their revenues have dropped drastically. Part of this includes cutting their insurance costs to a minimum. Significantly, many are unable to afford political violence premi-ums these days. What this means for us is focusing our efforts on international companies with ‘stand-ard’ products, basic insurance requirements they cannot do without, such as health and motor insur-ance. Through this, we have been able to withstand the instability in the political and economic climate. In Insurance, best practices with a balanced portfolio is great but sometimes they will not be suitable.

In addition, Asia Insurance Company is trying to come up with new products in order to limit its expo-sure in terms of large mega-risks. Another method by which we have withstood recent challenges has been through our approach to small- to medium- size enterprises (SMEs). Because most of the large projects are either on hold or cancelled, efforts have been strengthened on SMEs products to stabilise re-

Facing the challenges of the Iraqi market

Jamal Asfour, CEO of Asia Insurance explains how the firm has adapted to ensure growth, despite

instability in Iraq

Mena Insurance Review (MIR): As Iraq’s leading in-surance company, this period of instability brought about by the threat posed by ISIS must present a variety of challenges for your firm. What do you see as the most significant challenges you are facing? Jamal Asfour (JA): The current economic and politi-cal climate in Iraq is not as we would want it to be. First, there is political instability, but there is also the huge reduction in oil process that has affected the budget of Iraq. From automotive to insurance and telecoms, for example, this has had a domino effect on all sectors of the country.

For the insurance industry specifically, this has af-fected us primarily because our clients are the big players in the market. Many of the international com-panies operating in Iraq have closed down; in turn, Supply outstripped Demand. For instance, in one of the main areas in Kurdistan where international com-panies had offices, the price of rental has dropped from its peak of $6000 to around $2000 per month. This automatically triggered the reduction of the market property insurance premiums.

Areas currently controlled by ISIS are considered outside of our coverage scope due to numerous rea-sons. A pivotal reason is we cannot cooperate with a body not authorised by the United Nations. In addition, there are the business challenges such as sending people there for production, claims or risk surveys. Even all local GSM network operators have ceased network coverage in ISIS areas.

In the time since the conflict began, reinsurers are requiring a lot of underwriting details. In a sense

Areas currently controlled by ISIS are considered outside of our coverage scope due to numerous reasons”JAMAL ASFOUR, ASIA INSURANCE

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