THE RIGHT POLICY

Lebanon 2015 | FINANCE | VIP INTERVIEW

TBY talks to Pierre Talhami, General Manager of Beirut Life on leveraging the bank network and grasping customer motivation.

How does Beirut Life benefit from the relationship with Bank of Beirut?

It has become internationally acknowledged that banks no longer confine themselves to traditional banking products, but rather have evolved into financial institutions providing financial products and services. This includes a broad range of banking, insurance, investment, and financial advisory and planning services, and any combination thereof. Each of these facilities requires its respective professionals and experts. Yet banking and insurance are complementary services, since bankers are risk averse, while insurers are risk takers. Bankers accomplish their analysis of the finances and the current ability of clients to meet their obligations, and transfer all, or part of the unforeseen risk to us to evaluate and manage. Therefore, in order to become providers of a complete line of financial products and services, we combined efforts to design the products needed to satisfy our clients' needs, and convert our branches into a one-stop-shopping place for financial products and services. For us, Bank of Beirut comprises a captive client and their customers are our largest target market. Their physical locations and branches are our best channels of distribution. We see synergy as a situation where one plus one yields more than two, and with Bank of Beirut we experience synergy at its best. Naturally, this edge benefits ourselves and our clients, who benefit from our lower costs leading to products and services that are fairly priced.

What does Beirut Life add to the Lebanese insurance sector as a newly established company?

We believe that competition is the only route to perfection. We have a vision of becoming providers of specialty life insurance products, thus driving other companies to compete with us to the ultimate benefit of our customers. We aim to enhance the awareness of our market base on the importance of planning and protection against the financial impacts of life's unfortunate events and their resulting trauma. We also aim to tackle our customers' priorities by offering the most appropriate solution. All this will be coupled with the proper education, which will feature and emphasize the qualities of each product, as well as its target and limitations, if any. Only then will the client learn how to compare and contrast for optimum selection. In addition, our ability to physically reach a wider market through bancassurance will certainly help the industry gain new loyal clients and contribute positively to the size of the national portfolio.

What is Beirut Life's product portfolio and target market?

As a life insurance company, our target market is theoretically any individual eligible for and in need of a life insurance contract. However, we believe that product innovation is key, and that not all customers share the same needs. When analyzing consumer behavior in general, we notice that a client buys a product only if they clearly establish the need for it. In contrast, a successful producer is one capable of creating a need or highlighting it, and then developing a product to satisfy that need. To accomplish that, we have performed thorough market segmentation and considered each segment as a target market in itself. We constituted a focus group for each segment, made up of individuals belonging to the segment itself and asked them about their major concerns regarding their future financial or personal wellbeing. Based on their responses, we designed products to alleviate or ease their concerns. In connection, we realized that people tend to reject the concept of life insurance because it ultimately denotes “death," and that consequently they will not personally witness any benefit. We changed our concept and developed products from which a client will collect the benefits while alive, and use the proceeds to enhance his life and wellbeing. Our product portfolio includes, in addition to the conventional life insurance products, solutions that address the needs of male and female clients individually. It includes solutions for customers who look forward to starting their own business, or buying the house of their dreams, but who lack the financial means to do so. Our portfolio includes products that combine physical protection and financial planning to allow the insured and/or his family reach a stability level, at which they can meet all their financial obligations.

What steps does Beirut Life follow to promote insurance awareness in Lebanon and the region?

Although awareness is not a variable that can be measured numerically, other indicators may be used to depict its magnitude. Once we realize that an average citizen of Ireland spends 35% of their income on insurance products and that of England spends 25%, while an average Lebanese citizen spends only 1% on insurance, we will simply conclude that awareness among other constraints is inadequate. Moreover, most people fear the unknown, or more specifically, things that they cannot comprehend. In this context, we have to admit that an insurance contract and its fine prints is a document that is hard to grasp and consequently can generate ambiguity. At Beirut Life, one of our objectives is to contribute to the process of building customer awareness and invest to gear up and enhance the image of insurance in Lebanon. To accomplish that, we intend to play three major roles while assuming our duties as insurers. We intend to be educators, distributors, and fair claims payers. Each of these roles will have an obligation towards our customers, which will ultimately lead to more awareness, trust, and confidence.

What is your main focus, as well as expectations for the year ahead?

Our philosophy at Bank of Beirut group is to identify challenges sooner than others and find the right solution before our competitors. Despite all the political and economical turmoil and instability around us, we remain optimistic. We believe that with each situation clients' needs might change, but they will never disappear. Their spending might diminish, but on the other hand their savings might also increase. It is up to us to shift our focus in parallel with the customers' priorities at different stages and try to satisfy them. During periods of stability, we focus on the stability factor and offer products that will maintain financial and economic stability for families, such as saving plans and life and disability plans. During periods of instability, we focus on the risks connected therewith, such as war and terrorism, and promote these covers. In times of economic difficulties lending increases, and we focus on this change to promote credit life contracts. Although we are confident that better days are to come to this part of the world, we will keep our focus on our major roles as educators, distributors, and fair claim payers and will proceed with our strategy in product innovation to offer our clients state of the art products.