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May 13, 2019

Innovate to face challenges – Interview with Atinc Yilmaz - Middle East Insurance Review

Written by Osama Noor - link to PDF


The UAE insurance market did not achieve notable growth in top line, though profits have fared well in the past year, said Mr Yilmaz. “The UAE’s 30 listed insurers in 2018 have shown less than 1% growth in GWP. The reduction of motor insurance prices due to competition and almost full penetration or saturation of the Dubai Health Authority (DHA) basic insurance plan in addition to increased competition over the existing corporate medical schemes have stunted growth. All these elements are clearly limiting the market growth, and the market size is not increasing like it did in previous years.”

The large number of insurers and brokers is the crux of the matter, he said. “The market growth is not in line with the existing number of players. The government in the UAE is actively stimulating the economy and achieving growth, but the amplified number of players is not supporting the growth of the insurance sector. There are 61 insurance companies competing and pulling growth down; it’s the same situation for brokers. Despite that, we don’t see much regional consolidation happening whether for brokers or insurers,” he said.

Still, the market is hardening compared to the past year for certain segments, particularly in some specialty lines as some players have withdrawn from the DIFC and some regional reinsurers’ ratings have dropped, he said. “At the same time, for certain specialty markets, the capacity is less than that of previous years at the DIFC. In addition, oil prices have been a bit volatile, but it is better than it was two years ago. In general, regional stability would lead to increasing growth in the GCC markets.”

Innovation to face challenges

Against that backdrop of a competitive business environment, providers must be agile, try to have the best talent who can really understand clients’ needs and leverage technology to overcome challenges and achieve success, said Mr Yilmaz. “We see some growth in certain specialty businesses for successful players who are using digital solutions to offer a more customer-specific approach. The growth based on price competition alone is not sustainable,” he said.

He added that Howden is investing in technology to differentiate itself from others. “Since we established the regional structure of Howden in the Middle East at the end of 2017, we have more than doubled our size and market share in the region where we have almost 300 colleagues. For medical, we are using AI and digital service platforms – with the help of our actuarial team – to crunch the data and offer consumers the right level of service.”

For reinsurance, Howden is bringing its tool, the Howden Lab – a digital platform which offers ceding companies optimal risk placement solutions. The company is also launching another innovative service in the region called Howden Regulator. Mr Yilmaz said, “It’s a digital online risk management and risk analytics solution for medium and large corporates. We try to be impactful and bring them the most practical solutions. Using technology, being agile and result-oriented is the way forward. The traditional ways consume time and effort.”

Expectations for the market ahead

The market will continue to be challenging this year, Mr Yilmaz said. “The volatile oil prices, along with the overall tough economic environment, are expected to continue in the coming period. Again, competition due to too many players in the market will play a key role in bringing the growth down.”

Howden will capitalise on its market knowledge, he said. “We have been in the UAE for more than 11 years, and we know our clients and our operating markets. We are continuously introducing new value propositions in the region in addition to our innovative data-driven solutions, such as on financial lines, cyber, energy and recently marine risk specialty services. We are also strong in construction and serve corporations of all sizes in the GCC. More importantly, the use of innovative solutions will help us adapt to market challenges and achieve our growth targets.”

Optimistic about the company’s prospects this year, Mr Yilmaz said, “Big brokers are increasingly consolidating at the global level, consequently creating more room for us as a global broker in the Middle East market space. We are the largest international broker globally outside of the US and one of the fastest growing, increasing our market share with premiums of over $22bn in the 90 countries that we operate. We are able to attract the best talent in the market thanks to our empowering and entrepreneurial culture. I foresee a good year for us as a company, but the market is still going to be challenging although profits are still there. Profitability comes first, but we need to see growth happening for the markets.”

Howden TMEA won the Broker of the Year Award at the 2018 Middle East Insurance Industry Awards