Trust Compass Lebanon Governance, transparency, Anti-money laundering Performance that rises to international standards and perceptions
Ahmed Tabaja, George Ayoub and Mohamed Darwish
Trust Compass Lebanon
Governance, transparency, Anti-money laundering
Performance that rises to international standards and perceptions
Trust Compass Insurance and Reinsurance is one of the leading companies in Lebanon. It was launched in the early nineties when Mr. Ghazi AbuNahl wanted to participate and contribute to the process of rebuilding Lebanon. The Company worked to provide the best products and services in the Lebanese insurance sector and became distinguished in its performance and reputation as well as in its strategic aspirations.
It is a member of the Trust Group, which has established a number of direct insurance companies in several Arab countries, all of which are active companies with independent boards of directors.
This article sheds light on the start of the company, its work and its position in the local markets, through conversations with the Chairman of its Board of Directors, Mr. Ahmed Tabaja, its CEO, Mr. George Ayoub, and the Director of Risk Management, Mr. Mohamed Darwish.
Tell us about the launch of the company?
In 1992, with the end of the war in Lebanon, we bought Compass knowing that it had little to no portfolio, from its owners who had emigrated to Greece.
Two years later, in 1994, we fully activated the company during very difficult economic conditions, as Lebanon was recovering from the recent war.
We adopted a conservative marketing policy where we offered high quality insurance products. This helped us build a good reputation and we were able to gain good access in the insurance markets even though there was a lot of competition. The strong and solid pillar represented by the Trust Group that owns the Company helped significantly in getting a foothold.
What was the role that Mr. Ghazi AbuNahl played in starting the company?
Based on his love for Lebanon and his desire to contribute to the prosperity and growth of its economy, Mr. Ghazi AbuNahl invested in several initiatives in the national economy.
Mr. Ghazi AbuNahl feels a deep connection with this country emotionally. He has a great love and appreciation for the people of Lebanon and has contributed in many social and charitable areas.
He has invested in the insurance, banking and real estate sectors believing in the potential of this country, despite the difficult times it has been going through. He believes in eliminating corruption and rebuilding institutions based on democratic, scientific, and cultural foundations.
The Lebanese insurance sector faces multiple problems, the most prominent of which is how to cover people with Corona disease. How did you deal with this issue?
Covering people affected by Covid-19 was the most prominent headline in the clash between the Ministry of Economy and Trade on the one hand and insurance companies on the other. The Ministry initially pushed towards requiring companies to cover people with this illness, noting that it is a global epidemic that requires health coverage by the respective governments.
The discussions continued on this subject, until it was agreed that all insurance agencies should cover medical and hospital expenses for epidemics, including Covid-19, for all new policies, and renewal of existing policies.
What steps have you taken with the spread of the Corona pandemic?
We rushed to take the necessary public safety steps by adopting quarantine as a preemptive step to confront the outbreak of this virus and reduce the likelihood of its spread.
With the outbreak of the epidemic, the company implemented immediate measures and protected its employees and customers, by adopting the principle of social distancing, including working remotely.
With mandatory quarantine imposed, more than 50% of the company's employees worked from home. Computers were secured for those who needed them, in addition to establishing a network for each team to ensure communication and business continuity.
Is the deterioration in the Lebanese pound’s exchange rate compared to hard currencies, in addition to the shortage of the US currency in the markets one of the most prominent problems facing the Lebanese insurance sector, as well as other productive and service sectors?
Yes, the shortage of the US dollar in the markets, leads the insurance companies to incur large losses, because they collect policy premiums in local currency according to the official rate, while they pay the value of claims in foreign currency or in Lira, but according to market prices.
These difficult circumstances have led to confusion in this sector, but has helped to facilitate an agreement with the Ministry of Economy and Trade that the contract currency clearly stated in the insurance policy schedule is the currency agreed upon between the company and the insured customer.
The inability of the Lebanese insurance companies to transfer money to their reinsurance companies is threatening the continuity of this sector. What is your opinion? How did you face this matter?
The Lebanese insurance sector suffers from the measures taken by banks that prevent them from being able to transfer money to their reinsurers, which in turn threatens their ability to pay their obligations to policyholders when a claim is made.
Financial transfers from local insurance companies to global reinsurance companies was the focus of the meeting held between representatives of the Association and the Minister of Economy and Trade, who assured them that the Capital Control project that is being prepared in the relevant parliamentary committees and which is scheduled to be presented to the Board of the General Assembly may soon allow the transfer of net balances to foreign reinsurance companies, after providing evidence with official documents issued by the Ministries of Finance, Economy and Trade.
Through Lebanon's worst economic crisis. What are your future directions?
We have formed a crisis response team to monitor developments and general conditions and to take appropriate steps that provide stability in work and continuity in performance and production.
The future is unclear, but Mr. Ghazi AbuNahl's directives insist on the continuation of the business and so this institution continues as a result of the will of the founder, management, and employees alike.
Action plan and set goals, Trust Compass strives for excellence. What steps are you taking to reach this goal?
Trust Compass always works with the aim of excellence, by implementing market leading practices and meeting its customers daily requirements. It is always keen to preserve its reputation in the market as well as fulfill all of its obligations.
Throughout its long history, the company has been able to provide the best types of insurance products, whether for individuals or companies, and has always fully adhered to its duty in honouring its responsibilities when an accident occurs.
The number of insurance products provided by the company is significant, but what is more important than selling and marketing the product is the ability to maintain customers by providing them with the best service. We can proudly say that we have maintained a very high percentage of customers over the years, and this is evidence of not only the quality of the products but the company's ability to fulfill all its obligations.
The company is now working on developing its internal systems and procedures in order to apply for ISO certification, ensuring it is able to provide the best possible services to customers, in accordance with the international standards.
The company's management is committed to developing its work to achieve excellence at various levels.
How did the company keep pace with the needs of its customers during the Corona crisis?
It must be noted here that the company launched a special program allowing customers to purchase an insurance policy for Corona via the Internet. This enables them to enter Lebanon by presenting the policy, which has become a basic condition for entering the country.
We are dealing in a flexible and pragmatic manner with the crisis of the Lira exchange rate, in the case of collecting premium and payment of claims. This is a cornerstone in the Company’s fair treatment of its customers.
What about investing in the human element?
The company invests in its human capital by encouraging employees to undertake training courses, where they learn about the most important developments in the world of insurance. Putting this into practice helps the Company provide the best service to its customers.
The company's management works to strengthen the spirit of teamwork, personal and collective responsibility, as well as recognition of performance and positive efforts to develop and motivate them.
How do you summarize the company's business plan for the coming years?
The Company intends to focus on specific areas within the framework of implementing its strategic plan, which are:
- Expanding the markets by increasing production and marketing. Expanding the network of agents and intermediaries and increasing public awareness about the brand.
- Continuing to provide the best customer service to maintain customer loyalty.
- Working on developing human capital, by continuing to hold seminars, lectures and training courses, conducting appropriate recruitment processes, and recognising achievement by rewarding on the basis of merit.
- Continuing to develop the internal structure of the company and adopting the best international standards and methods available in this field.
- Obtaining the ISO certificate, due to its importance in emphasizing business efficiency and its suitability to international standards at both internal and external levels.
Governance, transparency and international standards. What is your definition of the concept of corporate governance?
Corporate governance is a set of rules, laws, standards, and procedures according to which organisations are managed and effectively monitored. It governs the relationship between all the stakeholders, and it helps those in charge to determine the direction and the performance of the Company.
Corporate governance is one of the most prominent and most important issues in regional and international institutions and organizations. Interest in this topic has grown in many advanced and emerging economies over the past years, especially after a series of financial crises that occurred in many companies in different countries. Triggered by financial corruption, mismanagement and their lack of control, experience and skill, in addition to the lack of transparency, these crises and collapses have led to many shareholders suffering heavy financial losses, which subsequently prompted many investors to search for companies that implement the concept of good governance.
Also, the importance of governance has increased as a result of the tendency of many countries to shift to capitalist economic systems which rely heavily on private companies.
As a result of all of this, interest in corporate governance has increased, and it has become one of the main pillars upon which economic units must be based.
Due to the growing interest in governance, many institutions have been keen to study and analyse this concept, including the International Monetary Fund and the Organization for Economic Cooperation and Development.
In your opinion, what are the goals and advantages of corporate governance?
Corporate governance achieves many goals, the most important of which are:
- Achieving transparency and justice and protecting the rights of shareholders in the company by creating rules, regulations and controls aimed at achieving transparency and fairness.
- Creating controls, rules and administrative structures that give the company's board of directors the right to be held accountable before the general assembly and guarantee the rights of shareholders.
- Developing investments by strengthening investor confidence in the financial markets.
- Working on good financial performance by holding management accountable to shareholders.
- Imposing good and effective control over the performance of economic units to develop and improve the competitiveness of these units.
- Transparency in accounting and financial audit procedures to reduce corruption and fraud in the company.
- Developing, improving, and assisting decision-makers in building a sophisticated strategy that serves the company's administrative and financial efficiency.
Do you apply standards and governance in Trust Compass?
We are part of a group of international companies that adopt governance standards in their work and apply them in a precise manner. We have benefited from the Groups experience in this field and launched, several years ago, the process of implementing governance within the company's departments, where we set goals to implement them in cooperation between all parties. One of the most important decisions is to separate the duties of the Chairman of the Board of Directors from those undertaken by the CEO. In addition, the formation of 3 committees, which are the Risk Committee, the Internal Audit Committee and the Remuneration and Nominations Committee, which operate according to the international standards and rules followed in this field.
In the same context, we worked to separate jobs, define tasks and distribute them according to international standards, so that the possibility of overlapping work and authority was eliminated.
We benefited from experts and experience in the Group, as they gave several lectures and trained people to ensure the implementation of the concept of governance and transparency.
It is worth noting that the company has invested in human resources and a number of employees in the company have undergone intensive courses in risk management and combatting money laundering and have obtained certificates from the most important international institutes in this regard.
What about fighting money laundering?
We apply strict standards in this field and have an advanced information program that helps implement the obligations that the company operates under.
Trust Compass has been able, through its commitment to implementing international standards in governance, transparency and fighting money laundering, to elevate its performance to become one of the best insurance companies operating in Lebanon, capable of applying all the concepts and standards required of local and international authorities.
Mr. Ghazi AbuNahl chairs the Nest Group of Companies, which conducts direct insurance, reinsurance and brokerage operations and provides licensed real estate and banking services in 23 countries. The group has more than $ 5 billion in assets, has a turnover of $ 600 million, and employs more than 6,000 people.
Mr. Ghazi AbuNahl, through his long association with the World Trade Centers Association (WTCA) - New York, became a member of the Board of Directors in April 2004. He then assumed management until April 2017. He is currently holding the position of Emeritus Chairman of the Association.
In 1979, after 20 years of continuous experience, he established the Qatar General Insurance and Reinsurance Company, as a local Qatari company, and for a long time served as its CEO. It is listed on the Qatar Stock Exchange with a rating from AM Best of BBB+.
In 1989, he established Trust International Insurance and Reinsurance Company (BSC) in Bahrain, Trust Re, as one of the few reinsurance companies in the region. He previously held the position of Chairman of the Board of Directors and until recently was a member of its Board of Directors.
In 2013, Ghazi Abu Nahl was awarded the Lifetime Achievement Award from the Afro-Asian Federation of Insurance and Reinsurance (FAIR) for the services he provided during his career to the insurance sector in the Middle East and North Africa.
He has been a member of Lloyd's of London for more than 40 years.
He and his wife became members of the Contributing Advisors Committee at the University of Oxford for their contributions to the establishment of the Bonavero Law School for Human Rights.