State leaders of twenty-nine countries, from Africa and Asia, came together in April 1955 in Indonesia. Indonesia, China, India, and Egypt played leading role to unanimously approve and announce Bandung Declaration. The declaration inspired nationalism movements in the two continents, remapped the world politics and set up the foundation for Afro-Asian economic cooperation, under which the Afro-Asian Economic Organization was established. After the fourth general meeting in 1963, it was decided to work on sector-basis to enhance efficacy and attain better achievements.
It was then that insurance sector took priority and was put on the top of the adopted economic cooperation action program. A call was accordingly made, in collaboration with the Egyptian Insurance Federation, to establish the Federation of the Afro-Asian Insurers & Reinsurers (FAIR) which was favorably received and the FAIR Founders’ Meeting was held in Cairo in September 1964, attended by representatives of twenty Afro-Asian countries.
The aims of FAIR were defined in its statute; however, as a professional business association, FAIR was meant to contribute to regional cooperation, and thus insurance industry development in the Afro-Asian countries has been to adapt the changes, to review its priorities, to redefine its strategies, and in the mean time, to continue preserving its identity and principal goals. Accordingly, FAIR involves two major goals; cooperation in Asian – African region and business relation development with markets outside the region.
Currently, Mr. Abdel Raouf Kotb is the Chairman of the Insurance Federation of Egypt, since 2008, and the President of the Federation of Afro-Asian Insurance and Reinsurance “FAIR” since 2011.
Former FAIR Secretary General (January 2011 - April 2015), Mr. Hammam Mohamed Badr has more than 30 years of experience in insurance and reinsurance both in the domestic and international markets, e.g. Egypt, London, New York, Bahrain, during which extensively travelled to many countries all over the world, attended many conferences, and delivered papers on insurance and reinsurance in many conferences, workshops, and seminars. Current FAIR Secretary General, since May 2015, is Dr. Adel Mounir.
The number of member companies in 2013 reached 256 members representing 51 Afro-Asian countries, in addition to correspondent members from Europe. Nineteen Afro-Asian brokerage firms also joined FAIR Brokers Society under the umbrella of FAIR. All members are working together, confirming commitment and loyalty to the ideals of FAIR, and boosting cooperation with their partners worldwide signifying the international nature of insurance in theory and practice.
The composition of current FAIR Executive Board include a president from Egypt, two vice presidents from China and Malaysia, and members from Ethiopia, Indonesia, Kenya, Iran, Libya, India, Morocco, Philippines, Sudan, Turkey, Tunisia, and Zimbabwe. Additionally, co-opted members are from Algeria, Bahrain, Nigeria, Bangladesh, Oman, Syria, and U.A.E.
By and large, FAIR is composed of Ordinary Members and Associate Members that are as follows;
i. Ordinary Membership; open to any Afro-Asian national insurance or reinsurance companies and/or holding organizations. In all cases, an ordinary member shall have at least fifty one percent of Afro-Asian ownership and the Head-Office must be situated in Africa or Asia. FAIR Ordinary Members are now 238 from 52 Afro - Asian countries.
ii. Associate membership; open to any other Afro-Asian national insurance or reinsurance company whose Head-Office is situated in Africa or Asia and any African or Asian national insurance association or institution.
iii. Other insurance and reinsurance companies or institutions; whose collaboration is deemed conducive to promoting the aims of the "FAIR", may be accepted as "Correspondents".
FAIR POOLS & SYNDICATES
FAIR devoted special attention to the formation of pools to enhance cooperation, to develop business relationships and to increase underwriting capacity and retention of members.
1. FAIR Non-Life Reinsurance Pool, managed by Milli Re, Turkey
Ten years after the foundation of FAIR, it was felt that all positive ideas on Afro-Asian cooperation had to be put to practice and thus FAIR Non-Life Reinsurance Pool was established in 1974 to provide its members with profitable reciprocal business, secured through a tradition of sound, selective and conservative underwriting which has greatly contributed to weathering the ups and downs of the international market.
2. FAIR Aviation Pool, managed by Societe Centrale de Reassurance (SCR), Morocco
Fifteen years after the establishment of FAIR Reinsurance Pool, FAIR Aviation Pool incepted its activities in 1989. This was the fruit of long debates for a separate pool due to the high specialization of aviation business that has achieved a very distinguished record so far.
3. FAIR Oil & Energy Insurance Syndicate, managed by Trust Re, Bahrain
It is a strategic goal for FAIR members to affirm themselves as successful partners and credible insurers and reinsurers of their national and regional Oil & Energy risks in collaboration with the international markets. Therefore, it has been quite sensible to set up modalities for more cohesive cooperation among themselves, in order to face the challenges collectively. In line with this policy, FAIR Oil & Energy Insurance Syndicate was established and officially registered in the Kingdom of Bahrain, as an independent legal entity by an Amiri Decree.
The Syndicate principal objective is to underwrite Oil and Energy business from FAIR members and/or other resources, primarily dealing with the Afro-Asian business for the account and benefit of the members. It is very encouraging to note that the syndicate started with twenty founding members and has presently 36 members. The door is open for new membership and for stronger support of members to tap Oil & Energy vast business potentials in the Afro-Asian countries.
FAIR FORUMS & SOCIETIES
1. FAIR Reinsurance Forum “FRF”
Representatives of FAIR member insurance and reinsurance companies participate in this forum. It avails a platform for all parties interested in the growth of the underwriting capacities of FAIR member companies, to interact through the exchange of business, experience and information. They participate and meet annually to submit their reports, latest statistics, their reinsurance program and/or their reinsurance capacities.
FRF meetings continue to prove their importance and benefits for both insurers and reinsurers. It is assumed that direct insurance companies are encouraged to take more initiative, taking into consideration the changes in the international scenario.
2. FAIR Oil & Energy Underwriters Forum “FOEUF”
The countries founding FAIR account for approximately fifty percent of worldwide oil producers with more than three quarters of proven oil reserves. Massive investments in various oil and gas activities represent immense insurable risks with a commensurate premium base. Local insurers in many oil-producing countries have been unable to deal with these risks which are characterized by specialized technology, high values concentrated in limited areas and with high loss potential, single-handedly. Therefore, FAIR Oil & Energy underwriters are called upon to face the challenges collectively to develop capacity and promote an underwriting expertise capable of dealing with the complex and sophisticated nature of Oil & Energy Risk. They are invited to come together and work more closely, under the umbrella of FAIR Oil & Energy Underwriters Forum, which holds its meetings in conjunction with FAIR Reinsurance Forum “FRF”.
3. FAIR Life Insurance Professional Group, “FLIPG”
The life insurance penetration in the majority of the African and Asian countries is still too low. Millions of people, even those who have enough disposable income do not hold life policy. In addition, the economic reforms are going on and the contemporary socio-economic changes represent not only challenge, but also big window of opportunities for the life insurers. The increasing consumer sophistication naturally razes the demand on quality and the growing moves toward more investment-linked products, encourage insurers to look at the techniques of investment management beside their continued role in risk i.e. death, medical, and accident. In addition, the entry of the giant multinational insurers spurs fierce competition in the markets.
Bearing all this in mind, “FAIR Life Insurance Professional Group “FLIPG” was established to encourage life insurance professionals and managers to discuss technical and administrative matters which impact their work. FLIPG is formed mainly from representatives of life insurance companies in addition to the interested composite and life reinsurance companies. Members of the group name topics for the agenda of their meetings and FAIR central office act as an agenda manager, prioritizing and circulating the topics which are most named by members allowing plenty of time to compile information and members’ views, while preparing papers for each agenda item. FLIPG holds its meetings in the course of the Executive Board.
4. FAIR Brokers & Consultants Society “FBCS”
Recognizing the increasingly growing role of Afro-Asian brokers aiming at insurance industry development and enhancing regional cooperation, along with considering strategic goals and plans of FAIR which focus on mobilizing national resources to optimally profit from existing potentials in Afro-Asian markets, for the purpose of opening wider windows of opportunities for growth in a dynamic trading environment, all contributed to the establishment of “FAIR Brokers & Consultants Society “FBCS”, aiming at developing this profession and reinforcing a progressive and powerful arm to spur regional cooperation and encourage business exchange among FAIR members.
FAIR WORK PROGRAMS & ACTIVITIES
Revising strategies of FAIR and mapping out its relevant programs deem to be a continuous process constituting the main concern of FAIR Executive Board, and FAIR Central Office. Special attention is always given to the following issues:
1. Educational Matters to Enhance technical expertise
Globalization offers immense opportunity for the insurance industry to grow and develop particularly in the Afro- Asian markets where elements of competitive advantage, fruitful relations, emotional intelligence, ethics, and social responsibility exist. With this convection, the education process comes at the forefront in FAIR Work Program as a strategic issue, aiming at enhancing technical knowledge and expertise, developing human resources and capacities, and attaining the same level of skills prevailing in the developed countries.
FAIR educational plan takes into consideration the fact that levels of development of Afro-Asian insurance markets may differ, but the core activities of cooperation are naturally built upon common elements they have. Specific attention and collective efforts are addressed to overcome existing weakness in areas such as risk modeling, computation of probable maximum loss, building up rating structures, analysis of risk profiles, mapping out reinsurance programs, product orientation of life insurance, rating methods, marketing and distribution channel, reviewing manuals and disciplines of underwriting, and application of systems of risk management and IT orientation.
FAIR also encourages research at Afro-Asian research institutions and disperse level, particularly for the areas stated in FAIR Educational Plan. Cash prizes are yearly provided for FAIR members’ staff in favor of books, research papers, in addition to articles published in FAIR Review. FAIR members are invited to present their views in respect of FAIR educational plan including seminars, training programs, research initiatives, FAIR trainers’ body, FAIR academicians, awards of excellence, and FAIR Educational Archive.
2. Risk Management & Loss Prevention to Promote New Concepts
The application of risk management concept in Afro-Asian countries is still not matured. It is adopted by a few large business houses and multinational companies, whereas for the vast majority, risk management continues to be nothing but buying insurance policy, and worse than that, in some companies the concept is totally unheard. This is due to the lack of professional approach in understanding its purpose and the lack of disseminating others’ experience information on safety and loss prevention in the decision-making authorities in various industries.
So far, the consultancy organizations in the field of risk management tend to focus their attention on insurance portfolio analysis for reduction of premium, leaving aside all other areas of risk management. Therefore, a great deal of work is required to be done to induce the acceptance of the concept and awareness of its benefits. Notable attention in FAIR Work Program is given to this issue aiming at popularizing the concept, its components and application which starts with the identification of risk and ends with the control of risk.
3. Agricultural Insurance
Agriculture is of paramount importance to the majority of Afro-Asian countries in terms of gross domestic product (GDP) and employment, and thus plays a key role in meeting development objectives such as poverty alleviation and food security. It also represents the most important manufacturing activities for many countries; however, agriculture by nature, involves numerous natural, climatic, social, and human risks which necessitate developing agricultural insurance business. The main aim is to provide appropriate insurance coverage for crops, livestock and other related activities. Many successful schemes have been formulated, under rural insurance business in FAIR member countries. Disseminating information and experience about such schemes represents an integral part of FAIR Work Programs.
Standard forms and wordings of models for crop insurance, poultry insurance, livestock and cattle insurance, as well as sheep and goat insurance have been prepared. Forms, relevant certificates, and reports are made available to FAIR members upon their request, in FAIR Central Office Library.
4. Takaful Insurance
Takaful and cooperative insurance industry has consistently registered strong growth over the last two decades not only in the number of companies, outlets affiliated with insurance companies, and Retakaful companies, but also in Takaful premiums. The significant growth of Takaful services proves that such companies meet market needs. They also maintain strong relationship with the conventional markets.
Hence, encouraging the largest number of Takaful, Retakaful, cooperative and mutual insurance companies for the purpose of joining FAIR, exchanging experience, discussing issues of mutual concern, and working together is a principal objective of FAIR Strategy to combine resources and mobilize capabilities.
5. Credit Insurance
Considerable attention is given to evolving regional and sub-regional economic cooperation programs in finance, investment, and trade in FAIR member countries. The objectives are noble, but they cannot be realized through mere good will. They need an integrated approach to build up the infrastructure and to develop required services in order to secure a balanced and sustainable growth. Hence, promoting credit insurance is a basic pillar for the expansion of foreign trade. The development of information bureaus, credit reporting agencies and mercantile offices is also a fundamental service highly needed for the development of successful credit insurance. This can be better achieved through concerted efforts to mobilize credit information sources on Afro-Asian level. Some FAIR countries in Africa and Asia have developed credit insurance portfolios, therefore, sharing know-how and experience will be of help to other countries which only have academic knowledge about credit insurance and are willing to introduce this line of business. Therefore, credit insurance companies in Africa and Asia are called upon to join FAIR and to come together on a larger scale to exchange experience and face their challenges collectively.
“FAIR Review” is published quarterly by the Central Office and circulated to members free of charge. It is devoted to disseminate the research work, articles, and information which relate to the above mentioned issues and to enhance professional knowledge among insurance professionals.
FAIR CONFERENCES & MEETINGS
FAIR Conferences are organized biannually in Africa or Asia rotatively, according to a decision made by the General Meeting, which is the supreme authority of FAIR. FAIR General Meeting holds its sessions in the course of FAIR Conference, to determine inter alia the general policy and work program and to elect the President of FAIR and the Executive Board which shall meet at least once yearly and shall exercise all the powers of the General Meeting unless the latter is in session.
In addition, the following standing committees are appointed to perform and function as delegated: Financial, Educational, Agricultural Insurance, Life Insurance, Risk Management & Loss Prevention, Development & Cooperation Committees.
FAIR Central Office
Address: 14 Gawad Hosny Street, Cairo 11599 - Egypt
Tel: + (202) 23923630 - 23951815
Fax: + (202) 23921848 - 23961007