ENERGY TO SUCCEED
After half a century in the insurance industry in the Middle East, IGI Group founder and chief executive Wasef Jabsheh is in no mood to slow down and is still on the lookout for new markets to explore By Samera Owusu Tutu
"I've been in this business longer than digital calculators." He means it. Wasef Jabsheh has been in the industry for 50 years. It's an accolade usually reserved for a firm, not a single man.
Today he is best known as the founder and chief executive of International General Insurance (IGI) Group, headquartered in Jordan and operating in more than 200 countries.
But over the last 50 years, this proud family-man of Palestinian heritage has established himself as a pillar of the Middle East insurance community and a stalwart of energy classes of business in the region.
Wasef is debonair and his charm fills a room. As I speak to him at IGI's London office it's hard to ignore his humour and warm nature, but his authority is clear.
No success comes without trials, and Wasef has had many.
To truly know Wasef, you need to understand his beginnings. The youngest of his siblings, he was exposed to business at an early age.
"My father was a businessman, and our family was known for business in Jerusalem. They were the biggest businessmen of their day, back when everybody was living inside the wall of Jerusalem. A street in the Old City carries the Jabsheh family name – El-Jabsheh Street. Historically, all of the family businesses were there. It runs from the entrance of Jerusalem the Old City to the Christian quarter."
Along with the success, Wasef also witnessed his family endure its share of struggle. When he was five, his family had to fl ee their home for the first time amid the rising tensions in the area, only to return a year later to a divided Jerusalem.
"We went to Jordan valley, to a farm owned by my father, because they expected a lot of fighting in Jerusalem. When we returned my father had lost his business – it was on the other side of Jerusalem, which went to Israel. The early years of my childhood really weren't pleasant. Coming out of the war was a real struggle for my father and the family – a very tough time."
Wasef watched his father and brothers fight to rebuild after the Jerusalem split. And in 1952, his eldest brother left the city to work in Kuwait.
Despite the turmoil, Wasef has fond memories of his childhood; one that sticks in his mind is helping his cousin in her boutique as a teenager. It was here that he learned the dictum 'the customer is key'.
"My cousin had the biggest women's clothing boutique in Jerusalem, and on the weekends I often helped her, for free. I think ENERGY TO SUCCEED dealing with the women and communicating with people helped build that business mentality in me. I was also successful in doing that."
After his informal introduction to the business world through his family, Wasef went on to receive formal business education from the American University in Cairo, where he majored in economics and minored in business administration. But he was to face yet more turmoil and displacement, and be presented with a fork in the road that would lead to the insurance industry.
"I did my last final exam on 4 June 1967 – it was calculus and integral equations applied in economics – the graduation ceremony was supposed to be a week later. On 5 June, I woke up to the sound of fighters in the air and bombing over Cairo; that was the beginning of the 5th of June war."
This Six-Day War saw Arab-Israeli confl ict between Israel and the neighbouring states of Jordan, Syria and Egypt. It was clear to Wasef and his family that coming home to Jerusalem was not an option so he joined his brother in Kuwait.
"Back then the general manager of the Kuwait Insurance Company was originally from Jerusalem and knew my family. They were keen in those days on people with an American education, so he asked me to join. I told myself I'll find out if I like it or not, and if I don't I'll go and do my masters degree. That was the beginning, and I never looked back."
Wasef explained that another benefit of his American education at the time was having a good standard of English, and the Kuwait Insurance Company made full use of this.
"Coming from an American university, they gave me the tough jobs. After a year, they handed me the energy business. It was all of the oil companies, and contractors – which were the most important things in Kuwait those days. I found it very interesting, dealing with the oil companies, with technologies, petrochemicals. It was interesting, and educational as well."
Wasef's optimism and determination to seize opportunities is a rebuttal to the challenges he has experienced in life. He refuses to be a victim – not even of circumstance.
"If you're put in a position like mine, the only thing you think is 'I've got to keep fighting'. It's a struggle, it's not easy, but I'll do it! You've got to have the determination and you must make use of the opportunities available. It worked for me."
Specialising in energy was just such an opportunity, as it was rare at the time to be from the Middle East and a specialist in the area. He quickly found that there would be challenges to covering risk, but that with great risk comes equally sizeable reward.
"Around 1969 the Kuwait National Petroleum built a refinery called Shuaiba Refinery for roughly 140m Kuwait Dinaars, about $400m. The first policy of insurance for that refinery was insured by me. There wasn't enough capacity to cover 100% of it in the world. In the world! It was a tough risk. Kuwait is known for its heavy crude, so they needed new technology, and that refinery came with hydrocracking units. The size of the premium involved in these risks attracted my attention. Why waste your time on homeowner policies or small cargo policy? This is the stuff."
After being sent by Kuwait Insurance to turn around its Abu Dhabi division, Wasef was asked by the Abu Dhabi government there to help establish a national insurance company. He was made general manager two years later.
"In Abu Dhabi, there is some onshore oil business, but it was mainly offshore. In Kuwait, it's the opposite. So this attracted my attention. I learned that premiums you make in offshore were up to seven times those of onshore. Nobody in the Middle East knew anything about it, all of the expertise was in London."
Never one to shy away from a challenge, Wasef made it his business to be the go-to person in the region for the offshore oil business.
"I like challenges. And the energy business is challenging business, even today. If you use your mind and calculate your steps, the challenge becomes more enjoyable."
One of the reasons Wasef was able to step forward as a leader in the Middle East for the energy business was because of the dominance of foreign agencies at the time, particularly British ones.
"In the 1950s you had British firms, like the Royal, the Northern, Eagle Star and others. You had a couple of domestic companies in Egypt and one in Palestine and that was more or less it. Then came the local national companies; Kuwait Insurance Company was the first in the GCC. Then two more were formed in Kuwait, and one in Qatar, one in Yemen, and Abu Dhabi's first national company came in 1973.
"They were small retail companies totally dependent on foreign capacity, mainly from London, which was seen as the mecca of (re)insurance, and also Munich. The important thing for them was the reinsurance commission, not the profit from retention, because the retention was tiny. And this kind of mentality spread throughout the Middle East.
"I regret to say, that today the retail companies in the Middle East derive a lot their income from reinsurance commission rather than retaining the business."
Effectively, Wasef has had a front seat view of the birth and evolution of the (re)insurance industry in the Middle East. While he concedes there is still some way for the region to go to reach its full potential, he believes change is on the horizon, especially with the current soft state of the market and the several high-profile losses the region has seen recently.
"Insurance companies [in the Middle East] will find that they have to retain business and, once they start increasing retention, terms and conditions become more reasonable.
"In the '60s and '70s we didn't have any medical insurance. We didn't have the casualty business [in the Middle East]; now all of this has become compulsory. The exposures are different, that's why it is compulsory. Medical malpractice: never heard of it in the '60s, '70s, '80s. Now it is compulsory. Professional indemnity for engineers? Nobody thought of that. Now it's compulsory. Health insurance, compulsory. If you look at Saudi Arabia, more than 50% of the premium income is health. It's because it's compulsory."
The leap for the industry is best illustrated by Wasef's last point – when you consider insurance was illegal in Saudi Arabia until 2003.
Wasef believes further growth in the region depends on development of expertise.
"I'm keen on seeing the expertise developing in the industry; I was hoping to see much bigger improvement [over the years].
"Companies should look outside [the region]. IGI is the first company in the area to come and operate out of London successfully. I hope that in the area the insurance executives look at IGI and take it as an example, and say 'we can do it too'."
Growth and evolution is also on the cards for IGI. With the energy world evolving due to the emergence of new sustainable types of energy, Wasef says his firm has no intention of standing still.
"IGI is preparing for renewable energy. We've dabbled with it, but it will become one of our main lines of business in the future. We see the commitment that those countries made in Paris [at COP 15] towards reducing emissions as great for humanity, and it also creates a new business opportunity. We know it is in its infancy, but it will grow in the future, and become an important part of the business.
"Even the countries that produce oil – Saudi Arabia, UAE, Kuwait, Jordan and other countries – are now developing renewable energy. The world has to realise that it has to develop renewable energy. It is important for the future of our world to protect future generations."
This emphasis on being outward facing is also part of that growth, and has been served well by Wasef's years in the energy business. Having an understanding, and to a degree foresight, when it comes to energy has given IGI a preparedness against the inevitable downturn the Middle East has been facing – particularly with the region's economies relying heavily on commodity pricing.
"The volume of the business in the Middle East is not the same because oil prices dropped to 50% of what they were two years ago, so funds available for spending are not as much as before. Also, a lot of the resource in different pockets of the region has been diverted to warfare expenditure.
"We see fewer projects these days, especially construction. It's not like five or 10 years ago when Dubai, Saudi Arabia, Kuwait and Qatar were rising. Now it is quieter and reflects on the volume of the business. We at IGI have been preparing for a downturn on the volume in the Middle East business, and that helped us protect our results.
"People ask how do we manage to produce these figures and these combined ratios? It's because we prepared the company to be able to absorb these events in the Middle East. The surge and the volume 10 years ago was unsustainable. How many towers can you build? So we prepared ourselves and expanded into other geographical areas and introducing new lines of business."
After helping to establish the Middle East market from its grass roots, it's fair to say Wasef is a supporter of the industry's underdogs. It comes as no surprise that with its geographical expansion, he has now set IGI's sights on the untapped potential of Sub-Saharan Africa and wants IGI to be first in.
"Only in the last 10 or 20 years the world has opened up to Africa and investment has started to flow into the continent. Our roots come from developing countries and a developing area, the Middle East. With regard to business judgement, this is our roots and this is the most suitable environment for me, Wasef Jabsheh. Our underwriters are more comfortable in the Middle East and in Africa. There is a similarity there. We do business in Europe and in the Asia-Pacific, but we always like to develop business in rising economies, and Africa is one of them.
"We are exploring West Africa, visiting Ghana, Ivory Coast, Senegal, Cameroon and other countries, and starting to develop business. We're involved in the energy business in Africa, but there is demand for treaty capacity. We don't do treaty in the Middle East, but we are doing it in Africa, with selected Sub-Saharan African countries.
"That's because we think the environment is positive and the pricing is more sensible. It's a new frontier – for everybody, not only IGI. Of course it is exciting."
IGI are also interested in Emerging Asia but its approach is a little off the beaten track, with no intention to set up in Singapore, but instead to explore mainland China.
"We do have business in Asia, but it's limited. We want to increase it, but we're not in a rush."
Wasef is passionate about seeing the industry develop around the world, and this passion is not lost on his children. He makes no bones about business being in the Jabsheh blood, and his sons have taken up this mantle, all working at IGI.
Wasef stresses though that IGI is not a family business, but instead a business in which his family works.
"People probably look at IGI as a family business, but it's not. And it's not run as a family business. The rating agencies have told me we are more transparent than many public stock companies. That is music to my ears, because this is what we want to be. My sons are here because they enjoy the business."
As my time with Wasef draws to a close, I come to the conclusion he had every intention of becoming a pillar within his industry of choice. While chance and opportunity played their part, what he achieved over the past 50 years was no accident.
He sums himself up in three words. "Professional. Honest in the business of insurance. And successful."
And how do his peers view him?
"I hope they say 'he's a man we can trust' and can do business with. It's important to have a good reputation, but I don't know what others think of me. Some people like me, some don't – it's quite natural in the business."
As respect is earned, with his wealth of experience and half a century in the industry, he has truly paid his dues.