IN THE GAME
TBY talks to A.R. Srinivasan, CEO of Falcon Insurance Company, on reversing the fortunes of the firm, the impact takaful will have, and the Omani regulatory environment.
BIOGRAPHY
A.R. Srinivasan graduated in Commerce from the University of Delhi and went on to qualify as a Chartered Accountant in India. He is also a Chartered Insurer from the Chartered Insurance Institute in London, as well as a Fellow of the Insurance Institute of India, Mumbai. He has over two and a half decades of experience across the insurance industry, specializing in reinsurance, underwriting, and claims management. He has experience in India, Oman, the UAE, and Bahrain.How did you become one of the main players in the insurance sector here in Oman?
Obviously, the main insurance products that are being sold are similar in nature. Therefore, what sets each company apart is the way you provide your services and the way the client sees you. Over the last three years, which is what we have been focusing on, I am happy to say that there has been quite a turnaround and the company has grown. We have managed to take a lot of corrective measures in the company. From a loss-making entity in 2011, we are now profitable and all the past losses have been wiped out. Falcon Insurance is now joining the big-league players.
What is the composition of your portfolio?
Like all insurance companies, motor is the single largest portfolio. If you look at our target for 2014, around 38% of our projected premiums are from motor, while another 18%-20% are from the life and medical areas. Almost the same again, 16%-18%, are derived from property and energy. The engineering class forms about 8%-10%, and the rest is marine, liabilities, and others, which makes up the balance. Our major thrust has always been SMEs. We are a small-to-medium size insurance company, meaning we aim to insure SMEs. We prefer that we service clients across all their insurance requirements, from motor to medical, to group, life, and property. That is how we try to sell; in large portfolios. We are also expanding equally into the retail segment, which, until now, has not been a main thrust. Our major portfolio business is still corporate. Falcon Insurance currently only has three branches; however, we are looking to expand to one or two more and add on some alternative channels of business to improve the company.
With 22 companies present in a market of less than 3 million people, the Omani insurance market is beyond saturation. How do you respond to the high levels of competition in the market?
The market is extremely overcrowded with players, not only for insurance companies, but also for brokers. This makes it a very competitive market. By nature, the insuring public here is quite price sensitive, which keeps up pressure on insurance premium levels, which is not very healthy for the insurance market. This becomes starkly visible during years when the investment market performs poorly. When the investment market performs well, companies get good investment returns, which camouflages the negative results of their insurance operations. In the years that there is a negative investment market, the problems become more obvious. The last two years have been reasonably good for both segments. Motor is a business that is on the balance sheet of almost all the companies, meaning the impact of losses hits them much more than the other segments. In 4Q2013, we signed an agreement with Bank Muscat to provide life coverage for all the individual borrowers of the bank. This is a massive policy in terms of size, meaning that was a major win for us. In the 15-20 years prior to that, there was only one insurance company to achieve this. We are a major player in the life market, and this is clearly reflective of the fact that the market is now recognizing Falcon as an equally able provider. Fortunately, or unfortunately, we ended up having to pay the biggest banking sector claim. Again, the professionalism of Falcon Insurance and the auditing reinsurance behind it has led this claim to be fully settled. The market is very appreciative of the fact that this was done in such a short time. It was almost a $38 million claim, and was fully settled within a few months.
IN THE GAME
TABLE OF CONTENTS
Interview
HE Yusuf Bin Alawi Bin Abdullah, Minister Responsible for Foreign Affairs, Sultanate of Oman
TBY talks to HE Yusuf Bin Alawi Bin Abdullah, Minister Responsible for Foreign Affairs of the Sultanate of Oman, on the skillful use of diplomacy to promote peace and security throughout the region and beyond.
read articleGuest Speaker
His Royal Highness Prince Mohamed Bolkiah, Minister of Foreign Affairs and Trade, Brunei Darussalam
TBY talks to His Royal Highness Prince Mohamed Bolkiah, Minister of Foreign Affairs and Trade of Brunei Darussalam, on the close ties his nation has with the Sultanate of Oman, and the potential for joint investments.
read articleGuest Speaker
HE Seán Sherlock, Minister of State Development, Trade Promotion, & North-South Co-operation, Republic of Ireland
TBY talks to HE Seán Sherlock, Minister of State Development, Trade Promotion, & North-South Co-operation of Ireland, on bilateral agreements, investment opportunities, and relations between the two states.
read articleInterview
HE Dr. Mohammad Bin Al Zubair, Advisor to His Majesty Sultan Qaboos bin Said for Economic Planning Affairs, Sultanate of Oman
TBY talks to HE Dr. Mohammad Bin Al Zubair, Advisor to His Majesty Sultan Qaboos bin Said for Economic Planning Affairs, on economic diversification, Omanization, and SMEs.
read articleInterview
Hilal bin Hamad Al Hasani, CEO, Public Establishment for Industrial Estates (PEIE)
TBY talks to Hilal bin Hamad Al Hasani, CEO of the Public Establishment for Industrial Estates (PEIE), on attracting investment, supporting local development, and establishing new opportunities.
read articleInterview
HE Said bin Hamdoon bin Saif Al Harthy, Undersecretary, Ports and Maritime Affairs
TBY talks to HE Said bin Hamdoon bin Saif Al Harthy, Undersecretary of Ports and Maritime Affairs, on the important role that the Sultanate's maritime industry is playing in promoting trade and economic activity.
read articleInterview
HE Yahya Said Abdullah Al Jabri, Chairman, Special Economic Zone Authority at Duqm (SEZAD)
TBY talks to HE Yahya Said Abdullah Al Jabri, Chairman of the Special Economic Zone Authority at Duqm (SEZAD), on the rise of the Duqm area, and the opportunities on offer for investors and businesses.
read articleInterview
HE Didier Reynders, Deputy Prime Minister and Minister, Foreign Affairs, Foreign Trade, European Affairs
TBY talks to HE Didier Reynders, Deputy Prime Minister and Minister of Foreign Affairs, Foreign Trade, and European Affairs of Belgium, on bilateral relations and maritime cooperation between the two states.
read articleInterview
Dr. Fuad Jaffer Al Sajwani, Minister of Agriculture and Fisheries Wealth, Sultanate of Oman
TBY talks to Dr. Fuad Jaffer Al Sajwani, Minister of Agriculture and Fisheries Wealth, on the sector's role in diversification, encouraging international investment, and ensuring stable prices.
read articleInterview
HE Hamed Said Al-Oufi, Undersecretary of Fisheries Wealth, Ministry of Agriculture & Fisheries Wealth
TBY talks to HE Hamed Said Al-Oufi, Undersecretary of Fisheries Wealth at the Ministry of Agriculture & Fisheries Wealth, on the role fisheries wealth can play in diversification and boosting the sector through technology.
read articleInterview
HE Dr. Rashid Bin Salim Al-Masroori, Executive President, Public Authority for Stores and Food Reserve
TBY talks to HE Dr. Rashid Bin Salim Al-Masroori, Executive President of the Public Authority for Stores and Food Reserve (PASFR), on the drive to ensure food security and boost local production in key sectors.
read article
