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Lutfi F. El Zein

LEBANON - Finance

Steps to Success

Chairman, Medgulf


Lutfi F. El Zein was born in 1943 and has a degree in Economics from Saint Joseph University in Beirut. He is the Chairman of the Board of Directors of the Mediterranean & Gulf Insurance and Reinsurance Company-Lebanon and Bahrain. He is also the Executive President and Managing Director of the Mediterranean and Gulf Cooperative Insurance and Reinsurance Company Saudi Arabia. He is also Chairman of the Board of Directors of Addison Bradley and MediVisa Companies, and a member of the British Insurance Brokers Association. Furthermore, he is a Member of the International American Insurance Association and a Member of the National Insurance Committee in Saudi Arabia.

"We have worked very hard for many years to build Medgulf into an institution where creativity and hard work are synonyms."

What is the overall regional size of Medgulf in the MENA region?

Medgulf is one of the largest privately held insurance groups in the region. We compete with other privately owned firms, as well as publicly held firms. Over the last few years, we have been constantly ranked among the top three companies in the region. We are humbled by this as we continue to diligently grow our business platforms across the entire region. Two years ago, we broke the billion-dollar mark in gross written premium (GWP) terms. Our strategic plan calls for targeted growth over the next few years. This is a reflection of our hard work and on market recognition of the importance of the insurance segment in the development of the regional economy.

What have been your YoY growth figures for 2013?

Our Group CAGR over the last three years reached 16.5%. Our YoY growth has varied from 13% to over 25%. We expect that we will experience growth figures of around 15% over 2014.

What is your strategy with regard to pricing?

We have always run a service and quality to price value model. In addition, the regulators today demand that the industry prices its products at cost plus. We have an actuary price model and we abide by it.

“We have worked very hard for many years to build Medgulf into an institution where creativity and hard work are synonyms.”

Why do you feel than many companies look to Medgulf as a benchmark insurance company?

We have worked very hard for many years to build Medgulf into an institution where creativity and hard work are synonyms, and where an entrepreneurial spirit thrives in a model of corporate governance. We are transparent in the way we do our business, and we work every day to strengthen our communications and brainstorming with our regulators. It gives us pride, here at Medgulf, that our hard work has delivered our company to benchmark status.

Would you say this is a reflection of the transparency in your business practices?

Transparency is one of the attributes that we try to build in everything we do here at Medgulf. Our partners, the IFC and the Orix Group, are as adamant as we are to continue down this path.

Which of your insurance services are in highest demand in the region at the moment?

Medical insurance has been, for the last few years, the fastest growing product in our portfolio. But this is simply a reflection of the market place. Our motor insurance pool has been growing steadily, also. In addition, our engineering segment has been performing very strongly. Medgulf succeeded late last year in winning nearly three-quarters of the Riyadh Metro contract, an SAR100 billion project.

Medgulf states that part of its mission is to restore the reputation of the insurance industry in the Middle East. How successful do you feel you have been?

This is a work in progress. I believe that, to date, we have been successful. We discussed earlier how successful we have been in institutionalizing Medgulf, and how our company is perceived to be the industry benchmark. I strongly believe that we have moved the perception of the market place of the insurance industry from being simply a brokerage business, to a full understanding of risk underwriting. Insurance, as you know, is an essential tool in developing any economy. And that is being recognized more and more. Our work with the regulators, in implementing strict industry wide controls, has delivered nicely toward strengthening our industry. In addition, our consistent financial performance and our strong capital base have dramatically improved customer confidence in Medgulf and in our work.

How significant was the partnership between the IFC and Medgulf in 2011?

In addition to being a financial giant, the IFC is the global reference in corporate governance and compliance. We were absolutely delighted that it recognized our position as leaders in the region in developing these management tools. It has been key in helping us get stronger and better in this area. In addition, and due to the nature of their strategic interest in economic development, it is involved with us in defining market and strategic opportunities that will strengthen Medgulf in the near future.

You are currently a public listed company in Saudi Arabia and Jordan. Do you have any intentions to list on the London or Dubai exchanges?

It is too early for us to discuss this as we see little need for us to raise capital over the short term. But things do change, and we always brainstorm strategic moves. For the time being, we are totally focused on implementing our strategic plan.

In what ways are you trying to restructure your manpower to improve corporate governance?

Training, training, and training. We offer our associates education and training in insurance programs from worldwide institutions, such as from the Chartered Insurance Institute. We have introduced an internal program to cross train our colleagues on all aspects of our insurance operations in order to encourage in-house promotions. We are investing heavily in bringing in outside consultants to chaperone and support this process. This is our commitment to support and develop a second-to-none human resource capability that will lead our group in the years ahead.

© The Business Year – May 2014



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