Delegates hear how understanding risk and including young people in the process is the way forward for business
A strong risk management is key to dealing with the gap created by low insurance retention rates in the Middle East, according to Dhofar Insurance chief executive Taher Al-Heraki.
Speaking at the Multaqa Qatar 2014 event, co-hosted by the Qatar Central Bank and the Qatar Financial Centre and organised by GR, Al-Heraki said that concerns regarding insurance – particularly retention rates – were not new. He questioned why opinions and recommendations aimed at finding solutions to the problems “remain on paper most of the time?”
The answer, Al-Heraki said, went back to the era when Arab insurance in general did not face a major crisis, “so the idea that need creates innovation and invention did not apply to us”.
In the future, better risk management throughout business would be a positive and effective way forward, Al-Heraki said.
“We need to develop the concept of comprehensive risk management so that we can manage risks in our premium portfolio,” he said.
“The development of a comprehensive risk management concept is not easy. It requires perfect information backed up by competent actuaries, and this is something which might not always be available to small companies.
“It is essential that we depend on ourselves but to do so we need to develop sufficient knowledge so that we can deal with insurance mediators,” Al-Heraki added.
Further, investing in risk management should allow companies to involve a wider group of people in the insurance buying process – therefore increasing understanding across organisations.
Younger people, he said, would be instrumental in this.
“We should encourage our younger generation to overcome the obstacles and mistakes of the past,” Al-Heraki said.
“This would allow us to solve the problems relating to insurance as the younger generation is better educated and better able to overcome the issues of the previous era.”
Earlier, Al-Heraki said that local retention of insurance premiums was very low when compared with other countries such as Malaysia and Turkey.
“We are lagging behind them in terms of retention ratios, which is ironic as it is despite the fact that the risk profile here is more favourable than it is for those countries,” he said.