TBY talks to Ricardo M. Sleiman, Chairman of Fidelity Assurance and Reinsurance Co., on insurance industry trends, recruitment, and client relationships.
TBY What can be done to increase the attractiveness of the insurance sector in Lebanon?
RICARDO M. SLEIMAN Recruitment is key. This has been a tough issue for us, as it is now harder to convince young Lebanese to stay in the country when they can often make better wages in countries in the Gulf and Saudi Arabia. We are now going in for more female employees, as they tend not to go abroad. Women tend to be more conscientious on the job, and have more loyalty because they are not interested in living abroad. If we can raise the quality of our employees through continuous training, then we can hope to improve the image of the insurance industry across the country.
What is the history of the company?
We have grown from a very small company into a leader in the insurance industry. We are probably the only insurance company among the top six or seven that isn’t owned or associated with a bank. We depend on our insurance agents and our sales people. We have an exclusive 400 insurance agents and around 100 brokers working with us. Our operations are really diversified because our production comes from a lot of people who aren’t dominated by a big broker. The biggest company in Lebanon now produces around $100 million of premiums a year. About 50% or 60% of that comes from syndicates of lawyers, doctors, engineers, and so on. We are more specialized in personal business. We have very few people who produce a million dollars in premium income. The $55 million that we expect to close with in 2011 will come from around 500 people. This is very positive on the risk front, because if you are a very small insurance company with one or two brokers who generate 50% of the premium, that one or two people can then impose their opinion and policy on the company. If they then leave the company, that company will be in trouble or go bankrupt. We also don’t push for really big business. We mainly target the retail level. Something like 20% or 25% of business is at the corporate level and 75% is personal, like car, medical, life, personal accident, marine cargo, and home insurance. In this line of business there isn’t much competition. Taking on small business means more profitability, but having more leverage on the premium. This requires employing more people, who will raise our overheads a bit, but allow us to hire even more.
Would you say there’s less competition on the personal level?
Usually a big broker would not bother looking at your car, which would cost between $150 and $500 to insure. He’ll say it’s too small. But the junior will go for it without any hesitation. If you have a lot of juniors it becomes very interesting because you are diversifying the business and getting a better profit margin. However, you will be spending more money on issuing policies and printing policies and need more staff in order to cater for this large number. We have 100,000 policy owners. That’s a lot of people. We have 60,000 cars insured with us. I think we might be one of the few insurance companies with the biggest number of policy owners and cars insured.
What are your long-term goals for Fidelity?
Actually, we’d be interested in expanding outside Lebanon in the region. We also might have an appetite for a joint venture with an international company. My two children help me run the company. My son is general manager and my daughter is in charge of administration and human resources. We have a lot of ambitions for Fidelity.
© The Business Year