Jul. 6, 2015

Joseph Faddoul

UAE, Dubai

Joseph Faddoul

Executive Director, Chedid Re

TBY talks to Joseph Faddoul, Executive Director of Chedid Re, on operations in Dubai, its growth strategy for the market, and the effects of new regulations.


Joseph Faddoul is Chedid Re’s Executive Director of the Facultative Division. He is responsible for a portfolio in excess of $180 million that consists of property, engineering, life, accident, marine, and casualty facultative reinsurance business. Prior to that, Joseph was the Business Development Manager for AIG in Saudi Arabia. He is also an Associate of the Chartered Insurance Institute of London.

How would you describe the history of Chedid Re in Dubai and the UAE?

For Chedid Re, the UAE is of great importance. It is a very dynamic and competitive market which makes it extremely challenging. At Chedid Re we see these parameters as very exciting and we tune our team mind accordingly. Therefore, we understand that to be successful we had to always anticipate our clients' needs before it becomes obvious. On the other hand, since we are based in Lebanon we have the luxury of cost advantage where you can attract competent and committed human resources at relatively acceptable packages that give us a competitive edge.

What is the main focus of business for Chedid Re in the UAE?

The way we are structured as a company, we offer a complete solutions to our partners. We have two operations, the treaty operation and the facultative operations. Within both operations we service all lines of business through a team of expertise that provide a first class quality service. The major chunk of our UAE Facultative portfolio is property business because of the volatility of results and the market cycle is soft, insurance companies tend to cede the risk to reinsurers. Property business is an area of primary focus since we are aware that although, the premiums on the primary side are rising because of compulsory medical insurance, the reinsurance premiums are reduced, and the cessions are being decreased over the years. Mainly this is because of motor and medical business being retained. Having said that, over recent years we have seen considerable restructuring as far as the treaties are concerned, and the treaty reinsurers have imposed certain restrictions. This has affected primarily the property business hence the reason why we see this as an area for potential growth for facultative reinsurers.

How would you describe your growth strategy for the UAE market?

Our growth strategy relies on the areas with unexploited opportunity, especially regarding the restrictions imposed by the reinsurers on the businesses shared between the insurance companies. Previously many mid-sized businesses and SMEs were not routed to the open market because that business used to be shared between the insurance companies locally. However, now with the restrictions imposed by treaty reinsurers, they cannot carry on with such arrangement. Consequently, we are seeing a great deal of growth in the SME business as a result of the new applicable restrictions. We have to keep in mind that although the primary market is growing by double digits every year, the reinsurance market is shrinking because this premium is being retained, meaning that many proportional arrangements are shifting to excess of loss arrangements. A lot of premiums on the top-side are being retained by the companies, the potential growth lies in the business which used to be shared between the players, and this is what we are currently focusing on.

Recently the UAE Insurance Authority announced new regulations that are expected to squeeze out small brokerage and advisory firms that have limited capital bases. How do you see these new regulations impacting the insurance industry in the UAE?

Introducing regulatory frameworks is always encouraging for professionals. Although we still believe they are not stringent enough. At least, however, there is a light at the end of the tunnel, and we look at it positively. People like us always have an impetus to be operating in a regulated environment in order to close doors on unregulated business dealings. In an unregulated market, a broker that pays far less in compliance does not have to take into consideration the cost that I am incurring to comply; and this is also true in many other areas. We have an internal self-regulation in terms quality of reinsurers, policies and procedures. In an unregulated environment this would put us at a disadvantage; therefore for us at Chedid Re, we would encourage regulators to incorporate more stringent requirements.