Broker Q&A: Lockton MENA CEO Tony Saada

Two months into his new role, Lockton Middle East North Africa (MENA) chief executive Tony Saada has outlined his vision for the independent insurance broker in a Q&A with StrategicRISK.

After reaching the $1bn revenue milestone in 2013, Saada said Lockton MENA would capitalise on the economic growth in the region with heavy investments into its aviation, marine, engineering and Finpro specialities.

With time to consider the region’s risks and pin down his strategy for Lockton MENA, Saada considers the real challenge for insurers and brokers in the region is to build upon economic growth by establishing a loyal client base that can be relied on when times get harder.

StrategicRISK Q&A with Lockton MENA chief executive Tony Saada:

What opportunities and challenges are unique to the MENA region and how should businesses approach these opportunities?

What some will see as an opportunity others will see as a threat. Insurers will push for growth, which will see further downward pressure on premiums, but they could also broaden their product offering.

Competition could see the revival of discussions among smaller insurers in the Middle East delivering a new wave of mergers and acquisitions as the smaller insurers with less product differentiation find it more difficult to compete.

Despite the downward price trends over the past decade, several of the older established Middle East insurers have delivered consistently good results year on year. The better ones have introduced system efficiencies, product diversification, higher quality of service, better distribution networks and have managed expenses well.

Newly established takaful companies have found it difficult to compete with conventional insurance markets which offer similar products. They have suffered the most from overcapacity and competition and in some cases they are seeing their capital eroded.

On the positive side, economic growth in the Middle East stemming from increased confidence could generate relatively stronger growth for insurers and brokers alike. The challenge would be to build a loyal client base that will not desert them when times get harder.

What trends do you see developing and what catches your eye?

A record amount of new capital has entered the marketplace and excess reinsurance capacity is likely to be redeployed to the direct insurance market, which has and will continue to put pressure on the amount insurers and reinsurers can charge.

It is also likely that this additional liquidity will see the continued geographical expansion of insurers and Lloyds syndicates wishing to position themselves in emerging insurance hubs to be closer to the trading action and their clients. The DIFC (Dubai International Financial Centre) has been one of the main beneficiaries. This new capital, if properly deployed, will lead to improved processes, innovation and new products and as brokers we welcome this as it will benefit our clients.

What kind of activity can we expect from Lockton in the MENA region this year?

Lockton reached the $1bn revenue milestone last year by growth and expansion across the world. The MENA region features heavily in Lockton’s future growth, with new offices envisaged in five new markets over the next three years in response to our clients’ needs.

To meet the need for an ever increasing successful array of solutions centred around our clients we will be doing more data analytics and benchmarking for risk management, middle market, employee benefits and treaty clients delivering risk mitigation and programme design solutions at expiring or reduced premium levels.

We will continue to strengthen the aviation, marine, engineering and Finpro specialities based in the Lockton DIFC wholesale office, enhance our energy capabilities and grow our business around successful professionals. We will maintain the highest level of service and focus on the client service, one of the key pillars Lockton built its reputation on.