KIC is the oldest insurance provider in Kuwait. What growth have you seen in the company over the years?
The local insurance industry began in 1960 with the founding of KIC. Over our 55 years in operation, the company grew from an initial INR5 million to our current size of KWD150 million ($492.6 million). There were agencies before 1960, but no local Kuwaiti companies. KIC was the first company, established by top Kuwaiti merchants of that period. Shortly after founding KIC in Kuwait, the company opened branches throughout the GCC, in countries like Lebanon and Jordan. KIC was the first insurance company in Kuwait with branches throughout the region. At the time of its founding, the risks were significantly different than they are today. We are now faced with new and difficult challenges, especially in terms of environmental degradation and cyber terrorism, which are both difficult for insurers to address. We have to collaborate with insurers worldwide to devise solutions for protecting individuals in today's world.
How did KIC achieve its recently upgraded Moody's rating from Baa1 to A3 with a stable outlook?
This improvement was a result of our stable management. Stable management sends a strong message to clients that a company is reliable, and we are proud of KCI's organizational management. This upgraded rating is also a result of our staff, which is behind the growth and success of our company. Our underwriters are of the best caliber in all of Kuwait. We have an excellent team that has driven the company's growth, strong market position, and upgraded rating. Our human capital is our most valuable asset.
KIC offers general, travel, life, marine, and motor insurance. In which segments are you looking to expand in Kuwait?
We are focusing on the personal lines. When compared to international markets, Kuwait and the rest of the Middle East lack the personal lines of life insurance and personal estate insurance. About 17% of personal spending in the US goes toward insurance. That figure is just 2% in Kuwait. The reason for this is that the government provides free education, healthcare, and greatly subsidizes housing. There is no perceived need for many kinds of insurance. There is also, however, a lack of insurance knowledge in the country and we are trying to build that up. We are investing in awareness, directly through KIC as well as through the Kuwait Insurance Federation. Hopefully the market can remedy this internal gap in society so that people can truly understand the value of insurance. Insurance is not just a way of receiving compensation; more importantly, insurance is a means for feeling safe, secure, and protected from risk.
Do you have plans to expand further in the Gulf?
This is always an option for us, and whether we pursue it depends on the opportunities available. We had plans at one point to open branches in Egypt, which was then engulfed in turmoil shortly thereafter. Instability can be a problem when pursuing regional expansion. We also considered moving into other markets with major potential for growth. However, the conditions are not suitable right now. We will take our expertise to more markets abroad once we identify the right opportunity.
How do you view KIC's reputation in the region?
Many of the key individuals throughout the GCC's insurance companies are ex-KIC employees. From the 1970s until the 1980s, KIC was considered a school for insurers in the region. Several leaders in the insurance industry began here. Even when we closed some of our branches in the region, we did not need to redistribute our employees; they were sought after by other providers or else went on to start their own companies. Instead of competing with them, we pulled out and gave them support. KIC is proud of having strengthened the insurance sector not only in Kuwait, but also throughout the region.
What are your expectations for 2016?
We hope to continue our record of success. We know that there are projects to develop, opportunities to grow, premiums to write, and insurance to provide. Global markets are still intact and reinsurers are strong. The insurance markets are particularly stable in the region. The main concern is political stability in places like Syria and Iraq. These are difficult to predict, and such external risks of political strife and terrorism could impact our business.