MULTI-LINE INSURER

Abu Dhabi 2020 | INSURANCE | VIP INTERVIEW

TBY talks to Sheikh Mohamed Bin Saif Al Nahyan, Chairman of Abu Dhabi National Insurance Company (ADNIC), on recent growth, market development, and the evolution of the sector.

What key factors have contributed to your recent profit growth, and how does diversification feature in this?

We can attribute our success to a culture of teamwork and a commitment to developing, mentoring, guiding and empowering our people. Through comprehensive training we have also provided a platform for our employees to up-skill, and we were proud to recently host the globally renowned motivational speaker Ron Kaufman. Another contributing factor to our success is the continuous improvement of our processes. As a leading multi-line insurer with a wide range of General, Health and Life products, business diversification does play a role in ADNIC's success, however we do not pursue breadth at the expense of profitability or service quality. ADNIC is a company that adds value by caring for and meeting the expectations of its customers. It is an ongoing task to keep abreast of the evolving expectations and needs of our existing and potential customers.

What is the significance of your recent partnership with Al Etihad Credit Bureau regarding the controlling and managing of risk across your operations?

A major challenge in the insurance market is receivables, and signing the agreement with Al Etihad Credit Bureau is in line with ADNIC's mission to adopt innovative solutions in the insurance industry and implement international best practices. The move helps to further strengthen our ability to control and manage credit risk exposure in our operations, and in turn proactively select clients on the basis of appropriate credit and financial screening.

What is your view on the Insurance Authority, and its contribution to market development?

The regulator always adds value to the sector and ensures best practices are implemented. Additionally, they ensure that companies can continue to operate and honour the obligations to meet minimum solvency margins. The Insurance Authority sets clear financial guidelines and is also a strong advocate of clear, regular financial reporting, which is currently at a level of extensive electronic reporting. Among the most important financial guidelines issued by the regulator are investment allocations for different asset classes, like real estate and equities. The solvency margin and capital adequacy are important in safeguarding the interests of policy holders and shareholders alike. Another notable exercise is the price review, which requires half- yearly reports from companies on the performance of each business line. This gives the Insurance Authority accurate data on the state of the industry, both individually and overall, including CEO-level input on prospective developments.

What would be the role of technology when it comes to streamlining processes?

Investment in technology is a major focus for ADNIC, we are aware that adoption of automation and digitization will be necessary to meet the expectations of our clients. Furthermore, we appreciate that our clients and retail customers are keen to access insurance processes via their smart phone. Mobile apps, which allows individual customers to buy insurance, to launch and to follow up on their claims through their devices, and enabling call centers to respond immediately to simple transactions for basic products are activities that require deep technology adoption.

How can the insurance industry continue to evolve and what are your expectations looking ahead?

Regarding the contribution of the insurance industry in the overall economy the penetration rate in the UAE today is below 2.5%, or one- third of the European average. Therefore, the contribution of insurance to GDP is thin, however, the penetration rate in the UAE is still higher than most of the countries in the region. The positive side of this is growth potential. Apart from the penetration rate and share of the insurance industry in the overall economy, insurance is the backbone of commercial businesses as no enterprise can operate without it. With more than 60 players in the market, the sector is clearly highly competitive, and therefore M & A activities may happen but this could take some time. We are optimistic and project growth both at the top and bottom line, and see signs of growth in the market and the wider economy.