By Honorable Dr. Dhafir Al Shanfari - Group COO, Liva Group
Liva - amplifying capabilities, expanding footprints, and driving innovation.
The GCC insurance market is fast evolving, bringing with it opportunities for local and international players to pursue mutually advantageous mergers and acquisitions (M&As). In the race for market leadership, insurers are increasingly exploring prospects to join forces with aspirational companies, leveraging their complementary strengths to take their offerings to the next level.
A prime example of a deal with a regional impact is the recent integration of National Life & General Insurance Company (NLGIC) and RSA Middle East, and launch of their new regional brand - Liva, motivated by an ambition to build the region's leading multi-line insurer. Prior to the merger, RSA Middle East formed part of the RSA Group, a leading international general insurer, with a portfolio of award-winning products and services across Oman, UAE and Bahrain. The competitive advantage gained through a merger with NLGIC, the largest Omani insurance company, has been the opportunity to diversify into life and medical insurance segments and achieve scale with service touchpoints across the GCC with branches in Oman, UAE and Kuwait.
The birth of Liva has created a new regional player on the insurance scene serving 1.5 million customers, with a wholly GCC Shareholding, full product coverage, over eight decades of collective experience and operations across five key markets including UAE, Oman, Saudi Arabia, Kuwait, Bahrain and with entry plans in Qatar. This M&A gives Liva the advantage of expanding not only its products portfolio across the Life, Medical, Personal Lines and Commercial Lines segments, but also broadening its geographical reach to a wider customer base.
Amidst this dynamic landscape, government supervision is integral in protecting the interests of insurance policyholders, while antitrust laws preserve fair and honest competition. Clearer and more robust regulations are not only making the region's insurance industry more competitive, efficient, and sustainable but are also expected to have a positive impact on M&A deals, balancing insurer consolidation with consumer protection.
M&A has the potential to equip companies to better comply with regulatory changes and withstand market pressures, achieve scale and drive efficiencies that better the experience of the customer. M&A activity often brings with it additional investments in new technologies and business operations, driving potential for growth and value creation. All these factors give consolidated insurers a distinct competitive advantage, empowering them to stand out among the plethora of players in the sector.
The consumer upside to market consolidation are the reduced premiums achievable through scale and efficiency, stronger propositions and the accessibility to insurance products. Robust transition procedures and systems alignment between the merging entities are integral for ensuring a seamless process. With the opportunity to review current operating models merged insurers can significantly boost claims processing efficiency and quality of customer service, building strong and loyal customer relationships, driven by increased satisfaction.
For M&As to have the desired effect, it's crucial to understand their impact on employees and customers. At Liva, these transformations were strategically positioned from the inside out to bring all employees on board for the journey and set a solid foundation for the new brand.
By identifying the right M&A opportunities for their requirements and ambitions as well as approaching the transformation with a well-thought-out strategy with its customers' needs at its heart, insurance players can amplify their capabilities and put a stronger foot forward.