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A half glass full kind of guy: Maroun Mourad, CEO, Zurich Middle East General Insurance

A half glass full kind of guy: Maroun Mourad, CEO, Zurich Middle East General Insurance

“Double digit growth entirely possible,” Zurich Middle East, General Insurance, CEO Maroun Mourad tells Policy’s Bhaskar Raj.

July 24, 2011 3:30 by



Maroun Mourad was appointed CEO of the General Insurance business for Zurich in the Middle East in January.  He is now leading the integration of the company’s recently acquired Compagnie Libanaise d’Assurances S.A.L (also known as Lebanese Insurance Company), a privately owned Lebanese insurer with branch operations in the UAE, Kuwait and Oman.

Bhaskar Raj of Policy spoke to Maroun to learn about the integration process at a time when the region is expected to witness more acquisitions, his views on the industry.

Here are some excerpts from that interview:

Q: What’s the progress of the integration of the Lebanese Insurance Company?

The acquisition of Lebanese Insurance Company was concluded in December 2010 and so far it has gone according to plan.  As with every acquisition and subsequent integration, the road can be a little bumpy, but we are looking forward to completing the integration phase which is likely to extend into the third or fourth quarter this year at which point we will start seeing the benefits of the team’s efforts in integrating the acquired entity. The company in Lebanon is now officially known as Zurich Insurance Middle East S.A.L. We are still awaiting regulatory approval in Oman, Kuwait and the UAE and that should be granted by the middle of the summer.

Q: Analysts say the region is ripe for more consolidation. Will there be more mergers in this region?

If we look at the past couple of years there has certainly been some M&A activity in the region. The interest in the region seems to come more from the non-Middle East or non-Gulf based companies who are realising that this is a fast growing market where you can achieve some scale and secure some healthy margins. It is truly an emerging market where double digit growth is entirely possible compared to the low single digit growth that is more typical mature markets.

The regional market has its own peculiarities and challenges though; a lot of the entities remain controlled by families and this can make the M&A decision-making process difficult. In spite of this, the Middle East remains a very attractive place, especially the insurance sector.

Q: Why have M&As not picked up as previously anticipated?

There are many reasons for this. As previously alluded to, family businesses make up a large part of the regional economy and a lot of family businesses by nature have a sentimental attachment to their businesses which they have built over the years and are not willing to relinquish easily, which is understandable.

Q: What is the impact of the recent political strife in the region on the insurance sector?

The overall effect has been mixed. While some projects have been delayed in countries where there has been unrest, many believe, probably accurately so, that over the longer term there will be an increase in premium growth rates. Whilst there were some significant projects coming in the pipeline from the North African countries which have now been halted or delayed the GCC has shown resilience to this trend and we continue to see increased amount of investments in infrastructure, healthcare,  and oil and gas projects..

Q: Which industries hold promise? Energy, health or construction?

Of course construction forms a major part of the regional economy, but despite Saudi Arabia remaining quite busy, the rest of the region has witnessed a slow down in this area. Activity in Bahrain and Oman could pick up in the future and as construction projects increase again we will see growth in demand for operational property insurance, especially in the high value assets arena and very large complex property risks.

Oil and gas clearly is the backbone of the Gulf economies and continuous investments are taking place here so we see energy as a growing line. One area we want to push into is financial lines, including professional liability, on both an annual and single projects basis, casualty lines of business, third-party liability, and products liability.

Q: There is a school of thought that rather than minimum capital requirements, there should be risk-based capital requirements. What’s your view on this?

We cannot set minimum capital requirements in the absolute. Certain line of business like construction or offshore energy platforms, require a higher capital charge to support the volatility that is inherent in these types of risks versus a middle market portfolio of motor business where your results are relatively more predictable assuming, you have the right control in place. .

Q: What regulatory changes do you foresee which will help insurance growth in the region?

The industry is becoming more sophisticated and regulated and this is driving demand for more insurance products. We will continue to see change in the regulatory regimes over the next few years in the form of more robust controls, higher capitalisation requirements and compulsory insurance.

This article was originally published in Policy, July/Aug 2011



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