Axa uses web to expand services in Qatar

Dubai: One of the biggest international names in the Gulf's insurance space, Axa, is taking to the web to expand the non-medical side of its operations in Qatar. While the size of the insurance market in the country is valued at $1.2 billion (Dh4.4 billion), the sentiment within industry circles is that it is still grossly under-insured.

To achieve its short- and longer-term goals in Qatar, Axa recently entered an alliance with Qatarlyst, which operates a dedicated trading service for the region's insurance and re-insurance operators. The latter is a wholly-owned subsidiary of Qatar Insurance Services, itself owned by the Qatar Financial Centre Authority.

Axa has had a direct presence in Qatar for some time and is ranked third in terms of gross premiums written. So why the need to tie up with a new partner?

"This helps Axa increase its exposure in the non-medical segment, including retail, property and casualty," said Jerome Droesch, CEO of the insurer's Gulf operations.

Qatarlyst, however, will not assume the role of an underwriting agent, the CEO added. As for the Qatari insurance market itself, the prospects in construction and real estate-specific risks are getting brighter with each quarter.

It is a space that has attracted global insurance and re-insurance majors, and will get more so as a fresh wave of mega projects is awarded in the sporting and hospitality sectors.

But the Axa CEO said it is too early to talk about premiums firming up on these lines as a direct consequence of the projects becoming ever more elaborate.

Beyond construction-related mandates, "Qatar offers a huge potential in the insurance sector with penetration levels close to 1 per cent," said Droesch.

"Our partnership with Qatarlyst will be a key contributor to gaining dominance in commercial lines and in motor insurance."

What is not being said is that any web-based service that helps connect with new clientele translates into lower transaction costs for the insurer. If by having a via media, as is the case with Qatarlyst, Axa gets to do more within Qatar, the purpose would have been served.

Qatarlyst provides structured workflow, controls, reporting and electronic storage services, which, according to the company, would facilitate an audit trail and reduced transaction risk.

The insurer's increasing focus on Qatar and Saudi Arabia is an indication of how the GCC's insurance industry will shape up in the medium term. In contrast, prospects in the UAE are in the mature phase, and would require initiatives such as compulsory health insurance for all to fuel a new round of growth.

Last year, Axa recorded revenues of more than $511 million from its Gulf operations, with the UAE being the single largest contributor. In Saudi Arabia it had revenues of more than $110 million.

"We want to continue our growth strategy in the kingdom," said Droesch.

"Anyway, the UAE still remains the biggest insurance market in the region and we will continue to invest to increase market share."

Bahrain: strategic market

Axa foresees a consolidation of the insurance industry in Bahrain. If that happens, this would play to its advantage, according to the insurer's head of Gulf operations.

"Bahrain is a strategic market in our growth strategy — the low penetration and low insurance awareness compared to mature markets are huge opportunities waiting to be tapped," said Jerome Droesch.

"Last year's event did not affect our business in any way. As we speak, the economic and political environments are conducive to go full throttle on our growth strategy.