Welcome back, Mr.Bala! It’s been a decade since we featured you in our edition during your remarkable tenure in Riyadh, Saudi Arabia, with SAICO Saudi Arabia. Your previous interview captivated our readers, providing them with a comprehensive understanding of the KSA Insurance sector.
I am delighted to share that our magazine has evolved, and we’ve initiated a new Bi-Monthly ‘Cover-Story Interviews with International Industry Experts’ series. We are reaching out to distinguished Insurance Professionals working abroad, and your extensive experience and profound insights make you a perfect fit for this exclusive feature.
As I have learned about your current role in Bahrain with SAICO, I am particularly thrilled to approach you for another valuable and informative interview. Your continued contributions are highly anticipated, and we believe your insights will offer unparalleled value to our readers.
Our readers, especially the aspiring young minds pursuing insurance and risk management qualifications and careers, eagerly anticipate gaining valuable perspectives from seasoned professionals like yourself. Your contributions have always been impactful, and we believe your insights will continue to inspire and enlighten our audience.
I am honored to invite you to share your wealth of knowledge and experiences in this upcoming edition. Your participation will undoubtedly enhance the depth and quality of our magazine.
Let’s start another enlightening collaboration today, with this Interview!
S. G Afzal BiyaBani : How would you integrate ESG (Environment, Social, and Governance) principles into operations and decision-making processes? What sustainability initiatives you would undertake to contribute to environmental and social well-being?
Balasubramanian Pulicat: I personally believe that we should leave the world as it is to our next generation in the same way, as we took over from our predecessors.
It’s important to note that integrating ESG principles is not only about managing risks but also about identifying opportunities for innovation and sustainable growth within the insurance industry. This will involve Policy Development, Risk Assessment, Product Design, Investment strategy, Stakeholder engagement, Training and Awareness, Reporting and Disclosure, Governance Structure, continuous improvement, Collaborations and Partnerships etc. ESG assessment in the Insurance scenario, would cover major areas like, Internal Operations, incl. Employee relations, Climate Change that will impact the Value chain, focus on low-income customers and high risk groups, Socially responsible investments, Underwriting Green Products, Green claims management etc. We as a underwriter, focus on every aspect of ESG, to begin with, would abstain from insuring, certain risks, such as Tobacco, Cigarette, Coal etc in any form, Focus on Motor insurance with alternative sources of energy, say electric Vehicles, and if permitted to focus on micro insurance and also Agriculture Insurances. These are imbibed into proper Risk Assessment and in our claims processes, by using recycled materials instead of new etc.
On the administration front, we discourage use of more papers or printing except when there is no other alternative, maintain good employee relations with contract clauses strictly as per relevant regulations (We are one of few companies with lowest employee turnover) and among employees we encourage to be involved in more socially responsible activities, which includes conducting wellbeing workshops, Blood Donation, and other Health Drives.
We also support the Insurance Regulators in the countries where we operate with all sustainability initiatives. Overall, we aim to emit less waste, use nontoxic substances, implement conservation techniques (water or any resource) and reuse materials.
S. G Afzal BiyaBani : Can you elaborate on the corporate governance framework, and how it ensures transparency, accountability, and ethical behaviour in the insurance industry? What measures have been taken to align with international best practices?
Balasubramanian Pulicat: Corporate Governance framework focusses on 2 major areas, in the insurance industry.
- Ensuring Soundness of the Companies, contributing to financial stability
- Protection of Policy holders and Stakeholders interest.
The responsibility lies not only with the staff and management of the companies, but ultimately on the Board of Directors of the company.
Every country has brought out the regulations in respect of Corporate Governance in the General Insurance Industry and even OECD had given their recomm-endations.
Corporate Governance aims at protecting the rights of all the interested parties. It encompasses.
- Healthy Management of the Insurers
- Board is the focal point of the system.
- Board to set out the proper policies, procedures and assign responsibi-lities and monitor them. Establish standards of business conduct and ethical behaviours.
- Delegation of authority to Board Committees or the Management, does not discharge the Board from their responsibility.
Every Insurance Supervisor has provided for the Corporate Governance Regulations for their respective countries, and companies are expected to develop policies to comply with the provisions of the Regulators. This is to be closely monitored by the Auditors, Board Committees and ultimately the Board. This also involves submission of regular reports to the Regulators.
S. G Afzal BiyaBani : Climate change presents unique challenges to the insurance industry. How are you assessing and managing climate-related risks, such as natural disasters and their impact on policyholders?
Balasubramanian Pulicat: Climate change provides totally different dimension of Risk to the Enterprise more particularly the Insurance Industry, which not only affects ERM framework but also affects the regular business of risks. While our ERM team takes care of the Enterprise Risk framework, our business team takes enough care in underwriting risks keeping in mind the climate change and our Reinsurance team takes care to ensure that we are adequately protected in such situations. Our Finance team takes care to project financials with multiple scenarios, including stress testing.
S. G Afzal BiyaBani : Could you shed light on the adoption and implementation of International Financial Reporting Standards (IFRS)? How has this affected financial reporting and transparency in the sector?
Balasubramanian Pulicat: We are fully compliant with the requirements of IFRS 17 in all countries we operate, and we work closely with our consultants and Actuaries and have the necessary tools also. IFRS 17 will radically change the way the insurers report their performance.
It will change financial statements, data management, IT systems, processes, level of analysis and projections. The implementation of IFRS 17 is a major challenge for the insurance industry, fundamentally changing accounting, actuarial and reporting practices and significantly impacting the supporting systems and processes
Though the results may not be comparable with the past, improve comparability between insurers and increase Transparency, around the drivers of performance and sources of earnings, and the Board will know precisely what needs to be adjusted.
S. G Afzal BiyaBani : The insurance sector in GCC has been experiencing significant growth. What, in your opinion, are the key drivers of this expansion, and how is your company capitalizing on these opportunities?
Balasubramanian Pulicat: I can answer this question from my point of view.
We operate in GCC in different countries and have focussed on “Growth with Profit” which has been the key factor. There are countries with compulsory Medical Insurance, Minimum Motor pricings etc which if handled well, would provide adequate growth with profit.
Pricing of risks has been a key factor, and we have team specialized in each country, knowing fully the risk factors in each terrain. We still have to go a long way to reach robust growth to leverage our expenses in each Region.
S. G Afzal BiyaBani : Digitalization is evolving with insurtech and innovative products and it is reshaping the insurance landscape. What digital strategies has your company adopted to enhance customer experiences, streamline operations, and offer innovative products and services?
Balasubramanian Pulicat: The world is becoming progressively digital, and consumers of today are becoming comfortable using new technologies. To align with the whole world, we have recognized the need to be a digital insurer and stepped up our investment accordingly for future. Our intention is to deliver digitized customer experiences, invest in right technologies and partnerships, make better decisions with intelligent data usage, prepare for the unexpected and put employees first to attract talents. We have a specialist team at group level to focus on robust technologies, and have adopted Cloud computing, Block chain models where appropriate and also focus on BOT for repetitive tasks. We are also exploring the possibility of AI involvement in our dealings with our Customers, and our operations which would enhance our Sales and post Sales (Claims) with the focus on enhancing customer experience.
S. G Afzal BiyaBani : How do you view the regulatory environment for insurance companies in GCC, and what is your perspective on recent regulatory changes or updates that impact the industry?
Balasubramanian Pulicat: All the countries we operate are being well regulated, with Kuwait being the new addition. Some of the countries have compulsory Medical Insurance. All Regulators focus on Policy holder interest, Solvency requirements, Corporate Governance, Actuarial Review and AML. New regulations cover Sustainability, ESG and Customer Service and Complaints handling. Adoption of IFRS 17, effective 1.1.2023, is a key update being watched. The next focus is on climate change, and how will it affect the performance of the Insurers in the Region. The regulations equally apply to all companies, and these are welcome move and enable operation of even small companies/Foreign branches having Ethics as key drivers.
S. G Afzal BiyaBani : What steps has your company taken to ensure a customer-centric approach, including tailored insurance solutions, improved claims processes, and customer feedback integration?
Balasubramanian Pulicat: All our Strategies and Plans are oriented towards our ultimate customers, to provide seamless insurance experience. Though being one of the oldest companies in the market, we are known for having long standing loyal clients who continue with us for decades as also many of employees from top to bottom. Regulators also insist on the Insurers to adopt Customer Centric Approach and we are working on how to improve further the customer experience. These include providing Embedded insurance in third party platforms with Realtime personalised coverage, Bespoke coverage, Risk prevention offerings etc. Our team, including Actuarial analyst is focussed on identifying new products for development or exploring the opportunity to provide tailor made solution using the existing products. We have enabled claims reporting through our website and also App (Medical Claims). Our team monitors the customer feedback closely both direct to us or through social media, for quick solution.
S. G Afzal BiyaBani : Looking ahead, what are the primary opportunities and challenges that you foresee for the insurance industry in GCC, and how is your company preparing for them?
Balasubramanian Pulicat: At the end of the day, it is the bottom line which speaks. Though we focus on growth, we are more focused on improving our bottom line, sustaining and being a Customer Friendly Regional Insurer. This is the reason for many of the international insurers trusting us for decades, not only in the form of a Treaty but also to service their international clients in the regions we operate. Merger, Acquisition and Consolidation has been the order of the day and are seeing such activities regularly in the countries we operate. We are gearing up to meet such challenges in the days to come by simultaneously focusing on Business, Compliance, ESG etc.
S. G Afzal BiyaBani : I am thrilled to embark on this transformative journey, witnessing the continuous evolution and substantial growth within the insurance sector in the Kingdom of Saudi Arabia. With more than three decades of dedicated experience as an Insurance Expert, it is truly gratifying to witness the sector aligning seamlessly with the visionary leadership’s aspirations.
The ever-evolving landscape not only highlights the resilience and dynamism of the insurance sector but also establishes it as a robust contributor to the Kingdom’s financial system. As we navigate through these exciting developments, I am honored to announce a groundbreaking news for our readers — Saudi Arabia has introduced an exclusive Regulatory IA (Insurance Authority). This regulatory milestone signifies a significant step forward for the industry, bringing about new dimensions and standards. I am enthusiastic about playing a pivotal role in shaping the future of the insurance industry in Saudi Arabia through ongoing collaboration, innovation, and strategic leadership.
Looking forward to the exciting chapters ahead as we collectively contribute to the continued success and advancement of the insurance landscape in Saudi Arabia.
Disclaimer: The views expressed by the official are his own views and not necessarily that of company he represents.
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