March has started with a big scare for the region with COVID-19 rearing its ugly head all over the region, disproving initial bravado that the Middle East with its heat will be safe.
There is an almost frantic fear everywhere with stock markets tumbling and cries of supply chain shortage for industries depending on the inputs coming from China, where the virus first started in Wuhan.
Our cover story zeroes in on the spread of the virus and its serious impact on business operations around the world. There is an urgent need for proactive measures to rise above the challenge while avoiding panic and over-reaction. But the fear of death and shortage of vital medical supplies for healthcare workers are pushing the epidemic to a pandemic.
With the virulent spread of the virus, there is no light in sight. There seems to be more doomsayers than the much-needed positive brigade. The Dubai World Insurance Congress (DWIC) in that last week of February suffered because of several cancellations from within the region as quarantines went up and travel advisories were issued overnight.
These are the worst of times, and there is no rock-solid prediction to the real light at the end of the tunnel. Everyone is engaged in best guesstimates or positive thinking to wish the dread away. But will it?
Business has to go on, though there are many companies who are in BCP mode or some taking extra preventive measures to get their staff working from home. COVID-19 weighs heavily on all.
Aside from that, the reality kicks in with an IMF wail that Gulf financial wealth could run out in 14 years without immediate reforms. Hence, there is a need to stretch the money every which way. Intensifying competition, increasing asset risk, and more onerous and costly regulations are among the key risks that could affect GCC insurers’ earnings and credit conditions.
The regulators around the region are also stepping up with varying degrees of reforms, greater prudential rules and more active focus on customer protection. Around the different markets, there are talks of new rules on bancassurance, new masterplan for uninsured fire risk, making healthcare compulsory, and tinkering with takaful, and the ecosystem seeking more opportunities and harmony.
Our country profile is on the market prospects of Tunisia exactly 10 years since the Jasmine Revolution that started in December 2010. How much has the market changed in the aftermath? Has the industry been responsive to the swirling changes around?
We also bring you a loud and clear yell on cyber reminding you of the creeping dangers of silent cyber risks. We take a closer look at business interruption costs in the face of a cyber incident as cyber crimes have become more sophisticated. Claims are arising too as companies and executives cave in to ransom and extortion.
To end on a high note to bring in the spirit of spring and growth in the air, the region is seeing the rise and rise of online aggregators. There are more new entrants bringing insurance closer to the buying public. Will they clock through that sale or end at just comparison, making it yet another window shopping extravaganza. It is time for insurers to shape their sales pitch to convert that finger click to buy.
Sivam Subramaniam
Editor-in-chief
Middle East Insurance Review