CLIENT PERSPECTIVE: ASIA INSURANCE 27

MIR: What eff ect does the international aid eff ort and anti-ISIS military activities have on your industry? JA: In the Kurdistan region, for example, where we do a lot of business, ISIS tried to take control but thanks to the international community’s support, as well as our brave peshmerga forces, Kurdistan is still the safe haven of Iraq. The businesses are able to function and that means they purchase insurance. Thanks to the international communi-ty we’re able to keep businesses up and running, although many have had to close due to the drops in volume, cash fl ow problems and tightening government budgets. Overall the situation is stable and investors are still here. Patience is a virtue and we’re confi dent that we will over-come these obstacles as long as the support, both foreign and domestic, remains. Our government is doing the right thing but we need as much support as possible to create political and economic stability. In the private sector it’s our job to create economic growth through innovation as well as off ering the suitable marketing mix formula. We’re succeeding but not as per our ambitions, however, with patience and persistence we shall make it happen. MIR: How is Asia Insurance aiming to serve international investors in Iraq? JA: International investors always like to work with highly rated insurers so our strategy was to supplement our of-fering with high-quality partners, which has been very successful. On the medical side we have partnered with Munich Health. Our clients will see that we are associated with one of the leading reinsurance players in the world and take confi dence from that. On the non-medical side we have a partnership with Swiss Re which is another indicator that we operate by international best practice standards. We have also signed an exclusivity agreement with Zurich in Iraq which boosted our industry standing.

MIR: What does Asia Insurance off er its partners in re-turn for this boost to credibility and business? JA: We are on the ground in Iraq and have the best posi-tion to inform them on what is happening. We advise our insurance and reinsurance partners on regional under-writing issues and this gives us opportunity to grow. As a matter of fact AIC, in just two years of operations, became the fastest growing insurer and achieved the second high-est total gross written premium in Iraq and the fi rst in net profi tability compared to non-government-owned insur-ers. This is due to the support of our major shareholders Faruk Holding, the largest investment group in Iraq, our es-teemed clients, our reliable reinsurance partners as well as our dedicated human resources. Thus what we aspire to is to weather the storm and maintain our leading position.

Weathering the storm Jamal Asfour, CEO of Asia Insurance, discusses the impact of ISIS on Iraq’s insurance market

Mena Insurance Review (MIR): What is the current eco-nomic climate like in Iraq? Jamal Asfour (JA): Iraq’s economy is very dependent on oil; almost 90% of its total income comes from oil revenue. Given the dramatic drop in oil prices in recent months, the Iraqi government’s budget has also dropped. This is-sue, combined with the ongoing ISIS dilemma which is drawing further funds into the military budget, is having a very negative impact on the overall economy. For the insurance industry, this causes a huge problem as many state-sponsored construction projects have stopped, which has diminished what was once a substantial source of premiums.

MIR: How is ISIS impacting Iraq’s insurance industry? JA: As well as the lack of engineering insurance premiums, ISIS currently controls 30% of Iraqi territory, including Mo-sul, our second largest city, and we cannot write insurance for those areas. Furthermore, property insurance, which covers the hospitality industry, has been impacted by a dramatic drop in occupancy. All this has resulted in most Iraqi industries trying to mitigate losses by cutting down on insurance costs. There is no mandatory insurance here so insurance budgets can be heavily slashed. The same applies to motor insurance premium; as there is a limited cash fl ow, the population are reluctant to purchase new cars which has hit the automotive industry severely.

MIR: What is Asia Insurance’s strategy to maintain its po-sition in the insurance sector?JA: We are working with our reinsurance partners to fi nd a workable formula which reduces costs on businesses through smaller products with lower limits in order to keep something coming in from these sources. We are also in-creasing our focus on the international companies that are still operating in Iraq but who tend to be risk averse compared to local investors. We off er ancillary products like political violence coverage which will cover their risks from potential threats like ISIS. We shall focus our eff orts and take all necessary means to keep our premium infl ow in order to maintain our own stability.