Increasing Market Share While Maintaining a Balanced Insurance Portfolio

Read Full Magazine Here. This year reinsurers, brokers and cedants entered one of the most challenging renewal seasons in years.

GDP Annual Growth Rate in Yemen was expected to reach 3.00 percent by the end of 2022. However, civil war and political turmoil resulted in a humanitarian and socio-economic crisis in the country that peaked in 2018. This, alongside with famine and high inflation, impacted economic growth significantly. Nevertheless, the country’s economy is expected to improve over the upcoming period, backed by improvements in the government’s fiscal operations and an increase in donations and grants, which is anticipated to stabilize the country’s economy.
Laws for compulsory insurance are not enforced in Yemen and thus are inactive. As of 2017, GDP Annual Growth Rate in Yemen was expected to reach 3.00 percent by the end of 2022, valued at YER19.8 billion (US$38.4 million), but the current data shows that it is estimated to value YER21.3 billion (US$28.1 million) in 2022. Recording a marginal decline in the Insurance market penetration from 0.41% in 2016 to 0.37% in the end of 2017.
The Yemen Islamic Insurance Company (YIIC) provides Takaful insurance services that are compliant with Islamic Sharia in Yemen. The most important insurance services provided by the company (insurance for the transportation of cargo shipments by sea, air and land), vehicles insurance, properties insurance against fire and allied perils , houses insurance, engineering insurance, group life insurance , general accident insurance, general liability insurance, Professional indemnity insurance, travel insurance, political violence risks insurance, microfinance insurance... etc. At the beginning of 2001, the Yemeni Islamic Insurance Company was established with a paid-up capital of 100 million Yemeni Riyals. It raised its paid-up capital in 2006 to 400 million Yemeni Riyals, continuing its growth to reach a paid-up capital of one billion Yemeni Riyals in 2019 .
Mr. Hafedh Al-Baqeri is a distinguished leader in his field that have secured a great reputation in the market through his continuous achievements of creating a successful firm and achieving ambitions through dedication and experience. He started his professional career after graduating from Sana’a University - Faculty of Commerce, majoring in statistics, where he was one of the first in his class. He received a job offer with the United Insurance Company, from an advertising poster witnessed in his college, displayed by Hayel Saeed Anam Company that targeted the cohort’s top graduates. Mr. Hafedh Al-Baqeri was able to prove his capabilities at work which secured the job for him at a very early stage. After one year, he became the first Yemeni to take managerial responsibilities for the department of life insurance which was usually managed by international experts in the firm. He contributed to training Yemeni cadres himself until they became qualified to take managerial roles in different departments. The training contributed to the creation of fully skilled cadres that replaced the firm’s need for international experts. Driven by his strong ambition and need to growth he worked on developing himself constantly and obtained many theoretical and practical training courses in the fields of insurance. In addition to training courses in the administrative and technological field at both local and international levels, all of which contributed to the development of his skills in the field. A significant course that added value to him personally was a theoretical and practical course in the field of life insurance held in Iraq in 1994 in which he scored the first among students from the MENA region.
He later on went to the United Kingdom to receive advanced courses in commercial correspondence which paved the path for him to join the Actuarial Institute of the Mohanna Foundation for Actuarial Studies in Nicosia, Cyprus, obtaining a certificate in the actuarial field. Mr. Hafedh Al-Baqeri was also given the opportunity to go to France for a course in the technical and accounting field of reinsurance, which was held in Score Re - Paris in 1998. In addition to obtaining a practical course on how to assign optional reinsurance operations in NASCO - Paris. -In the years 2003 and 2004. His career continued to progress through a number of programs and courses in the city of Zurich - Switzerland with the second largest reinsurance company (Swiss Re)
He became Director of the Reinsurance Department in 2002
His career had been going through a continuous progression that can be witnessed through his many achievements some of which are: • Renewal of reinsurance agreements with regional and international reinsurance companies with various Arab and European countries during his tenure at United Company and Yemen Islamic Insurance Company.
• Training a Yemeni cadre that became a valuable asset to the Yemeni market in the field of insurance.
At the beginning of June 2007 , he moved to the Yemeni Insurance company as the technical and reinsurance director to later on becoming the deputy general manager and the general manager of the company in 2020. He gained his position due to his impressive efforts that contributed to the advancement of the company. When asked what does he aspire to achieve through his work. He goes on stating; when planning for success: Every successful administrator has a future plan and a vision that he or she aspires to achieve, and it is only through strong motivation and dedication that a vision can become a reality. This mindset is the reason we were able to conquer difficulties that may hinder our path and destroy our will. Leading with a strong belief that every problem has a solution, no matter how difficult the work environment conditions are.
His work alongside many loyal employees increased the production of the company from 400 million YR in 2007 to reach around one billion YR in the year 2019. He had a vision to implement a technical system in order to cope up with the technological era. Consequently, he transferred the company from the manual system to the automated technical system. This created a prototype for the manufacturers of the system that later on adjusted their products according to the requirements of the Yemen Islamic Company.
Name: Hafedh Mohammad Abdulrahman Al-Baqeri Date of birth: 01/06/1969 Place of birth: Taiz Governorate - Al-Ma’afer District - Al-Mashawla Al-Olayya Qualifications: Bachelor’s degree in Statistics and Insurance Mathematics - Faculty of Commerce - Sana’a University Occupation: General Manager - Yemen Islamic Insurance Company
Noting the above, the reputed Hafedh Al-Baqeri shares with BUSINESS LIFE reporter his comments on regional and global news, his insights, plans and analysis on the insurance industry in Yemen and elsewhere.

BL: Don’t you think that in the past few years, coverage renewals have been to the advantage of MENA reinsurers for several years?
Hafez Muhammad Abd al-Rahman al-Baqeri: I truly believe that the withdrawal of European reinsurers from the insurance market in the Arab world has played a beneficial factor for Middle Eastern and North African reinsurers. This withdrawal enabled reinsurers in the MENA region to increase their premiums and expand the dimensions of their insurance portfolios. Reflecting upon the Yemeni insurance market, the instability and the war both have contributed to the withdrawal of European reinsurers from the market. As a consequence, the underwriting capacity of insurance companies declined in reference to some types of risks. However, taking the Yemeni Islamic Insurance Company as an example, our policies are implemented such that risks are covered after thorough study and analysis to achieve a balanced and profitable portfolio. This enabled us to sign new reinsurance agreements with the support of our outstanding reinsurers and reinsurance brokers. Contributing greatly to our portfolio expansion while creating an advantage to reinsurer companies.

BL: What are your comments on this year’s renewal?
Hafez Muhammad Abd al-Rahman al-Baqeri: The international reinsurance market undergone multiple difficulties this year. Fortunately, through our insurance portfolios and reinsurance companies we have achieved outstanding profits during 2022 that enabled us to renew our reinsurance agreement for the year 2023.

BL: What is your opinion on Islamic insurance in Yemen and the Arab countries?
Hafez Muhammad Abd al-Rahman al-Baqeri: There is a growing demand for Islamic Insurance (Takaful) over recent years in the MENA region, particularly in Yemen. Which can be observed through the emergence of new companies that offer Islamic insurance services. Yemen Islamic Company is the only company in Yemen that functions solely on Takaful bases. However, even the conventional companies have established Takaful insurance options in their different lines of services. Emphasizing on both the great demand it has in the market and the benefits it provides for both the customer and the company.

BL: What are your comments on Takaful growth for 2023 and for next years?
Hafez Muhammad Abd al-Rahman al-Baqeri: The international market for Takaful insurance has been increasing annually and it is estimated to continue to grow in the upcoming years. Asia Pacific and GCC regions are relying heavily on Takaful which can be referenced to the large Muslim population that has a preference for this type of insurance. The customer base for Takaful insurance is vast and a broader expansion of the Takaful industry needs to happen in order to respond to the demands of the targeted market. Therefore, since the demand for Takaful insurance is growing it is very important for the Takaful industry to continue expanding. Ensuring that the needs of the targeted customers are met in order to result in their satisfaction and long-term loyalty. Noting that the preference for conventional insurance is relatively low in regions like GCC. Therefore, the presence of Takaful is a key factor in raising awareness about the importance of insurance. In addition to attracting customers that may perceive insurance as an industry that does not align with their beliefs and practices.

BL: Laws for compulsory insurance are not enforced in Yemen and are inactive, when do you believe that compulsory insurance will be active in Yemen?
Hafez Muhammad Abd al-Rahman al-Baqeri: Yemen is considered one of the first Arab countries to enforce compulsory vehicle insurance. Compulsory insurance against civil liability arising from vehicles accidents was issued in 1969 in Aden Governorate, with the establishment of the Yemen Insurance and Reinsurance Company. After Yemeni Unification the republican decree was issued by Law No. (30) 1Of 1991 regarding compulsory insurance against civil liability arising from vehicles accidents. Unfortunately, the implementation of the law faltered due to the failure to issue the executive regulations from the Ministry of Interior affairs. The current instability in Yemen is preventing any activation of compulsory insurance of vehicles in the near future. This is because the implementation is unfortunately subject to the stability of the country as a whole which is very difficult to predict at the moment. However, we continue to aspire that a law enforcement is activated as we try to spread awareness about the importance of insurance among people and organizations. We continue to see a growth in the numbers of vehicles insurance despite the fact that it is not compulsory, which is a positive indicator of the influence of insurances companies.

BL: How do you make strategic business decisions using in-depth historic and forecast market data related to the Yemeni insurance industry?
Hafez Muhammad Abd al-Rahman al-Baqeri: The insurance industry is based on risk analysis and so having a firm understanding of the market risks and collecting relative data is a necessity. Accordingly, we implement our problem-solving strategies in a way that ensures that our data are collected from reliable sources. In other words, we take the initiative to go on ground and collect data and then later on analyze them through a thorough risk analysis procedure. Moreover, it is important to note that we consider our experience in the market one of our most important assets and thus we always refer back to previous cases to ease the decision-making process.

BL: What are your remarks on the demand-side dynamics, key market trends and growth opportunities in the Yemeni insurance industry?
Hafez Muhammad Abd al-Rahman al-Baqeri: Growth opportunities are heavily relaying on the stability of both political and economic situation both of which are not stable in Yemen. However, there are a reconstruction movement happening slowly but steadily in the country. Which is a positive indicator that the industry can revive itself with time. When discussing the future plans of the company we ensured that we take into consideration the sizes of jobs in the market and the new types of covers that could be under demand. We continue to ensure that our firm is undergoing a constant progression to respond to the increasing demand-side dynamics. Be it through our developing our analysis tools or through creating strategic business relationship with reinsurers.

BL: How do you identify growth opportunities and market dynamics in key product categories?
Hafez Muhammad Abd al-Rahman al-Baqeri: We follow a very precise system that indicates the growth opportunities and the emerging demands in the market. We rely heavily on analyzing data from our customers and from the insurance premiums statistics in the market. All of which is done under careful inspection of the factors that have led to either a growth or decline in the premium numbers. Noting that the factors can be temporary and thus we insist on analyzing the factor in order to know how to respond to them and whether we should integrate them in our future business strategies.

BL: What are your recent strategies and plans for Yemen Islamic Insurance Company?
Hafez Muhammad Abd al-Rahman al-Baqeri: We have implemented an expansion strategy as a part of a growth strategic. We established a new branch of the company in Djibouti that started conducting business in 2022. This establishment was part of our vision to be the leading Takaful firm in both Yemen and the horn of Africa. In addition to that we established we established a firm that is specialize specifically in Takaful health insurance. According to our statistics we anticipate that it will start conducting business starting the second quarter of 2023. Moreover, we started implementing a five years renovation strategic plan that should extend out till the year 2027. Through this plan we aspire to create a governance guide to guarantee transparency and individuality in decision making. Noting that governance guidance is one of the most important needs to manage firms successfully and ethically.