The Business Year

Max Zaccar

LEBANON - Finance

Wave of Opportunities

Former Chairman, Association of Insurance Companies Lebanon (ACAL)


Max Zaccar received a degree in electronic engineering from the Institut Supérieur d’Électronique de Paris and has been chairman and general manager of Commercial Insurance since 1971. He also managed the Saudi Arabia branch of Commercial Insurance from 1974-1993. He is a member of several associations, including the Institut Technique Franco-Libanais, Oum El Nour, and the National Establishment for the Compulsory Motor Insurance in Lebanon. Zaccar has been a member of the board of ACAL since 1978 and was elected president in 2015.

Lebanon should focus on strengthening its insurance companies to meet the challenges of the future, in particular for the reconstruction of neighboring countries and expansion abroad.

What are your prospects for the country and the insurance sector for 2019?

We are extremely optimistic about the formation of a new government and the wave of opportunities brought about by the CEDRE projects. The set of reforms demanded by the government will undoubtedly have a positive impact on the economy and on the insurance market. Even during the past years of economic uncertainty, the insurance sector performed positively, increasing by 20% between 2016 and 2017, and premiums have been increasing by 3-4% YoY. Since insurance touches all sectors and lines of business, growth in our market is a positive indicator for the economy as a whole. We act as a barometer of the economy. Regarding the prospects for 2019 for the insurance sector, there are a great deal of opportunities. The bulk of infrastructure projects will need to be insured. Motor insurance in Lebanon increases every year by 50,000 to 60,000 new vehicles. There are also interesting prospects in the oil and gas sector, although the real premium will materialize in six years or more. Meanwhile, the market has to prepare itself to insure this nascent industry. For the last four years, our association has been organizing conferences and seminars on the subject, involving international insurers, insurance, and reinsurance brokers. Furthermore, we want to have all local insurance companies involved by creating a pool so that each company receives a share. Finally, life insurance is an important part of premium income. It will develop in the future because people are becoming increasingly aware of private pension.

Would you say the Lebanese insurance sector is overly competitive?

The insurance sector is overcrowded, although still marginally profitable. There is fierce competition due to fact that risks are decreasing, thus allowing rates to drop and the company to remain profitable. However, there are too many insurance companies in a small market. There should be ways to merge or acquire companies in order to increase the capital base. The Insurance Control Commission (ICC), with the help of the World Bank, is introducing certain amendments to the law, in particular for corporate governance and solvency on risk-based capital. This will encourage insurance companies to merge. We need strong insurance companies to meet the challenges of the future, in particular for the reconstruction of neighboring countries and expansion abroad.

How is the Lebanese insurance market adapting to the innovations brought by technology?

We have always been at the forefront of developments in the MENA region, including digital distribution. Most local insurance companies have developed a line of digital solutions and insurtech. Important areas of focus for the future include cyber risk, which is a worldwide problem. Up until now, 85% of the business has been in the US. Lebanon is now catching up along with the rest of the world. The future of insurance is also a central pillar of the association. We hold conferences and seminars, and we are in contact with universities to assist their programs.



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