Jan. 4, 2015


Farid Chedid

Lebanon

Farid Chedid

Founder Chairman & CEO, Chedid Re

BIO

Farid Chedid is Founder, Chairman, and CEO of the Chedid Capital SAL (Holding) group of companies. He led the growth of Chedid Capital and set up companies in Cyprus, Lebanon, the UAE, Greece, Saudi Arabia, the UK, and Qatar. The first group company was Chedid Re, established in 1998. Today, Chedid is the leading SEIB Insurance Company in Qatar focusing on corporate and complex risks. Farid Chedid has been listed among the Power 50 most influential individuals in the insurance industry in the Middle East and North Africa for six years in a row. He is a Fellow of the Chartered Insurance Institute, holds a Master’s degree in Management and Finance, a Bachelor’s degree in Economics, and a Graduate Diploma in Maritime Law.

What have been the most significant factors for the company over the last 15 years?

The first company was launched in September 1998, meaning we have been in the reinsurance business as brokers for over 15 years. We had a defining moment when we relocated our head office from Cyprus to Beirut. By moving and setting up in Beirut, we have recruited highly qualified, experienced individuals with international exposure and know-how. Since 2004, we have also been recruiting fresh college graduates through an apprenticeship program so that they can gain experience and meet international standards. The team is our strength. In the financial services industry, we also need the vision and ambition to do something meaningful and make an impact. In 10 years, we became one of the major players in the region, and since 2008 we have been ranked among the top three and since 2012 the largest in Saudi Arabia.

Is that thanks to the EuroMena Fund Investment?

The investment from EuroMena has a different perspective. Since 2008 it has helped us institutionalize our shareholding structure, as well as help us with corporate governance and the expansion of the group in its relations with investors from outside Lebanon. Therefore, its support has helped us grow.

What are the most significant ways in which Chedid Re's corporate governance has changed during this time?

Year after year we have enhanced our structure, processes, planning, internal control and risk management all under the supervision of the board. The direction and strategy is set by the board. The ambition to expand is continuously monitored and challenged by very experienced directors. Every step is well studied and prepared in relation to value creation. We always look for sustainable growth with the long-term well-being of the group in mind. Our board comprises Charles El Hage as Vice-Chairman, Charles was the Managing Partner and Senior Vice-President of Booz Allen Hamilton in the Middle East, Romen Mathieu, who is the Managing Director of the Euromena Funds, and Sami Chedid, who has over 30 years of insurance experience. Our Advisors to the board are HE Ziyad Baroud, former minister and a very active lawyer, as well as Aldo Cardoso, the former President of Anderson France and Anderson worldwide, who is a current board member of a number of French-listed companies.

What are the main trends in the Lebanese insurance sector at the moment that you are trying to accommodate?

Lebanon is one of the most profitable markets in the region. The market is much smaller, but net profit in the insurance industry is doing well. The shareholding structure of the companies in Lebanon makes them different. The reinsurance market is attractive in Lebanon, whether it is treaty or facultative. The insurance industry in Lebanon needs government support, because the rules and regulations are outdated. We have an insurance commission trying to do the best it can to improve the industry, but it needs a new comprehensive law. The minimum capital requirement is $2 million, but if you compare that to other countries in the region, the minimum base capital is around $20 million in most countries. To be in line with the 21st century, there needs to be reform in the sector.

You service over 270 companies in Lebanon and the region. How are you expanding your portfolio, and what is special about the services Chedid Re offers?

Our offices in Beirut, Riyadh, Dubai, and Limassol service over 270 companies in the Middle East, Africa, and Europe. Today, all insurance companies in the region know us and the solutions we provide. We have a specialized team that understands the requirements of the companies in the region. We have the trust and support of insurers and reinsurers throughout the world. We have been a Lloyd's cover-holder since April 1999, which means that we have underwriting authority on behalf of Syndicates there. We also underwrite on behalf of other global players, with Partner Re being the latest company that signed an agreement with us for financial lines. The range of support from European, US, Asian, and Middle Eastern reinsurers is impressive, and they are keen to support us because of our expertise, integrity, and ethics.

You have a strong focus on product innovation and providing risk management solutions. In which areas have you innovated?

We have been able to provide solutions to insurance companies through the structuring of innovative programs. If you provide a plain vanilla solution, anyone can do that; however, we have been different, which is why we have grown. In terms of risk management, if you look at the construction industry for example, we have a team of engineers that understand the risks involved with the construction industry, and have been involved in providing risk control solutions to our clients. We are one of the largest reinsurance brokers handling financial institutions. Our market share across the region is substantial. In Lebanon, if you take bankers blanket bond coverage for financial institutions, we have a 60% market share.

How much value-added does Chedid Re's regional presence bring to your clients?

It is all connected; you must have the people and the talent, and they must provide solutions that add value or you do not get the business. A few decades ago, business was about friendships and relationships, but now 90% of the business is done because you produce valuable solutions. Reinsurance is a business where you protect the balance sheet and reduce the volatility in the results. Reinsurance is also an alternative to capital by providing capacity through a combination of risk transfer mechanisms. This business is complex, and you need to understand the requirements to service your clients. We have engineers, lawyers, and actuaries involved in our team. I cannot think of any other broker in the region, even internationally, that has a team of 140 people between all our offices that can offer the same level of localized knowledge and expertise.

What was the strategy behind the founding of SEIB Insurance company?

That was an opportunity that came up due to the growth expectations we had in Qatar and the vision and ambition of our partners. We realized we can service and add value to Qatari companies and its economy. Qatar is a market for large and complex risks that require major support from the reinsurance market, which is our core strength.

Do you plan to start any more companies under Chedid Capital Holding?

As an insurance company, no; however, we do have plans to open new offices for Chedid & Associates, which is our insurance broker brand name. Chedid & Associates is an insurance broker located in Saudi Arabia, Qatar, and the UAE and we are planning to expand. As for Chedid Re we have new offices coming up soon.

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