By Menna Samir and Mohamed Azab
Tokio Marine Family Takaful’s newly appointed Managing Director Masaya Inagaki comes to Egypt with great expectations for the Egyptian insurance market. The Japanese director has been an important resource for Tokio-Marine since 1999, when he started working for the company in Japan before moving internationally. He was appointed as Chief Operating Officer (COO) for the Middle Eastern region at the company’s subsidiary in Dubai for two years.
Inagaki said that providing a service with high quality at a reasonable price for customers is a core concept in Japanese culture, and that he is determined to apply that here in Egypt. In an exclusive interview with Daily News Egypt and their sister newspaper Al-Borsa, Inagaki said that he comes to Egypt with the aim of making Tokio Marine Family Takaful the number one Takaful company in the country.
The company began its operations in Egypt in 2008, providing insurance services that are based on Islamic Sharia.
How do you evaluate the insurance market in Egypt at the time being?
Tokio-Marine’s positive vision for the Egyptian market was the main driver for why the company decided to start operating in Egypt in the first place. The market has very high potential and the insurance market specifically has many opportunities to be exploited.
Egypt is a country with a pivotal role in the Middle East and the country has a very large population, which opens various possibilities for the insurance industry.
Furthermore the economy started improving in the last period. For those reasons, I expect that success rates for insurance companies in Egypt are going to be very high.
Are you satisfied withthe efforts that have been made recently by the Egyptian Financial Supervisory Authority (EFSA)?
In the past period, EFSA has been very cooperative and supportive of insurance companies. I personally am very grateful for their support and I would like to thank them for their efforts and for the insurance legislations that they have issued in the past period.
EFSA is now considering making amendments to the insurance law, which include developing a separate legislation specifically for Takaful. Are you supportive of this modification?
I support this kind of modification as it will aid Takaful a lot, especially in the future when morepeople become aware of the Takaful concept and when more companies that adopt this type of service enter the market.
How did the political unrest and security issues that occurred in the country affect Tokio Marine Family Takaful?
After the events of 30 June 2013, the company witnessed a drop in sales. In the past period, however, sales have been increasing and reached their normal rates.
How much did the company generate in revenues in 2013 and 2014?
In 2013 we obtained EGP 30m by the end of June and in the same period in 2014 we generated EGP 53m; marking a 38% increase in sales. I believe we will continue growing our sales in the next years.
What are your expectations for Takaful in the upcoming period?
I believe that Takaful insurance in Egypt has very high potential and I expect for it to grow even more than other normal insurance services, such as life insurance.
What do you think are the reasons behind this?
The main reason behind this is that the majority of the population in Egypt are Muslims. Takaful is based on Islamic Sharia and this provides the users of the service the psychological comfort that they are following the right provisions of Sharia. Although we target all people and [do not discriminate] based on their religion.
From your own view point what do you think are the main obstacles facing the insurance market now?
The main obstacle would be for the people to be truly convinced or persuaded enough to engage in insurance services. Insurance is a necessity; however, not everyone is fully convinced of its importance here in Egypt, unlike in Japan or Europe, where individuals insure almost everything of value that belongs to them.
Also, for people to be persuaded of its importance, they need to have the financial capacity to join insurance programs.
How do you think this market can contribute more to the country’s GDP, given that it only contributes by about 1.5% at the time being?
Providing more service programs to customers at reasonable prices is a main issue that should be considered by insurance companies. Also, more attention should be given to advertising and the PR services to attract more customers and thus increase sales and make a bigger contribution to the GDP.
Some insurance companies compete by setting low prices and providing poor services. What do you think about that?
There is open competition in the insurance market, meaning that there are no regulations which companies have to abide by when setting prices. At Tokio-Marine, our main concern is our clients. Increasing sales is important; however, providing them with the best services at reasonable prices is the main aim. At the company we don’t just set low prices to attract customers and provide them with bad services to increase sales. We care more to provide good service to clients with reasonable prices.
How much does the company currently have in capital? And was there more capital injected lately?
In 2013 the company’s capital was 60m and more capital was invested this year to reach 113m.
What differentiates Tokio-Marine from other insurance companies?
Japanese people in general appreciate quality rather than quantity, so Tokio-Marine adopted the same policy here in Egypt. Through our high quality Takaful insurance services, Egyptian people will know the difference between Japanese and non-Japanese qualities.
We highly respect the contracts that we make with our clients. Even the smallest details are considered by us to develop a trusting relationship with our customers. Customer trust will make our clients the company’s ambassadors, as they will recommend our services to others.
Where does Egypt stand compared to Takaful companies in the Middle East?
I’m going to add to this comparison countries of the Far East, such as Indonesia and Malaysia, because Takaful insurance is more prevalent there. Generally speaking, those two countries stand at the top of the list of countries with the highest usage of Takaful insurance. Concerning the comparison with countries of the Middle East, it will be unfair to do it now as Takaful is still new in Egypt. After five years Egypt might come on the top level.
The Egyptian market, however, as I said before, has great potential and I believe that in the future Egypt will stand at the top of the list in the Takaful insurance services.
Also, I’d like to add that Tokio-Marine is a multinational company, operating in 37 countries all over the world. Amongst those countries are Brazil, the US and Europe. The volume of business is much bigger in those countries than in Egypt; however they are currently saturated, so more opportunities are to be exploited in other markets like the Egyptian market.
New Takaful companies are aiming to enter the Egyptian market. How will that affect the company?
Competition is going to be tougher for sure when the number of companies increase; however this is not going to stop us from becoming the number one company in providing family Takaful services.
What services are you planning to add to the company?
We still haven’t decided yet on the new services to be passed, but there are now several projects being studied.
How many branches does the company have? Are you intending on opening new branches soon?
We have six branches that are distributed among Cairo, Alexandria and Tanta. We’re not thinking about opening new branches, but we are planning to expand one of the existing ones located in Mohandessin. We are now satisfied with the number of branches we have, as we cover a lot of areas. However, in the future we might open a new branch in another area.
Does the company intend to cooperate with banks in light of the new regulations issued lately by the Central Bank to activate banking insurance?
Indeed, we intend to do that. As a matter of fact, we’re now having talks with certain banks to see if we can create agreements with them.
Are you thinking of assigning parts of your investment portfolios to portfolio management or investment funds in Egypt?
When it comes to investment, the company tries to take the safest path possible to protect policy holders’ right and this might not be fit with our basic policy.
What is your training plan for the company’s employees?
We provide our employees who need certain courses with the opportunity for external training, such as the Insurance Institute of Egypt, as we don’t always rely on the training they get inside the company. Also, in some special cases, if it is really needed for certain employees to get courses abroad we send them to take those courses that are usually held under the auspices of reinsurance companies.