INTERVIEW: TARIK AOUAD, DEUTSCHE RÜCK
We’re in Asia to stay
As the German reinsurer continues its global expansion, Deutsche Rück’s Asia market entrance lead Tarik Aouad talks about his strategy and approach.
With Deutsche Rück due to start writing business in Asia in January 2023, Baden-Baden Today caught up with Tarik Aouad, managing director for the recently formed Middle East/Asia department, who is the market entry lead.
Aouad, who has more than two decades of experience in the Afro-Asian reinsurance markets, is not new to steering market entries for the reinsurer. In 2020 he successfully led the business into the Middle East.
How have you been preparing ahead of the Asia market entry?
We’ve been reaching out and reconnecting with business partners in Asia. During my career I’ve had particular exposure to Asia, and have served these markets in senior executive management posts, so my previous relationships have been very helpful.
We’ve also been in contact with other market players. We have a business plan in place that outlines the operational framework with clear processes of how we will handle these new markets.
How has your experience of taking Deutsche Ruck into the Middle East helped?
It underlined the vital role of culture. This business is primarily about people and I am fortunate to have experience of and be part of the culture, so we have that relationship. We have business partners in the region that we know from old times and we understand each other.
We know what is important for these business partners, for example, long-term relationships and reliability. Those are things that they appreciate. The Middle East is a meaningful territorial part of western Asia, and as such it is an extended arm of the Asian markets.
“We have a business plan in place that outlines the operational framework with clear processes of how we will handle these new markets.”
Tarik Aouad, Deutsche Rück
What are the opportunities and challenges in Asia?
Challenges are opportunities to grow. But let’s start with the opportunities.
The markets in Asia are increasingly considered the future engine of worldwide economic growth with households accumulating wealth and knowledge while the middle class rapidly expands. These positive prospects combined with the relatively low degree of insurance penetration present an opportunity for profitable expansion and further geographic diversification for a reinsurer such as Deutsche Rück.
The challenges in those markets are rather rooted in global dynamics, so they are not really specific to the region. There’s inflation, climate change and the COVID-19 pandemic, as well as developments in technology, all with the associated risks that the industry is trying to address, such as nat cat and cyber risks.
These challenges translate into opportunities because our mindset is: ‘Why not try to solve this as an industry and find solutions for these challenges?’. One example to do that is to support the industry in embedding the environmental, social and corporate governance (ESG) metrics in the operational framework.
Which regions and lines of business are you targeting?
Southeast Asia, South Asia and East Asia are the markets we want to target and which are also the markets I was personally exposed to in my past capacities. I can’t talk about specific countries, but we will take a case-to-case approach depending on the general market profiles as well as the specific reinsurance terms and conditions.
In terms of lines of business, we are looking at the standard property and casualty treaty business. We are targeting small, medium-sized risks because we are confident that this kind of business is promising in these markets. We see big potential there which we want to support as a quality following reinsurer with a Standard & Poor’s A+ Rating.
“What is important is that the business is sustainable and consistent in terms of profitability.”
What response have you had to your plans?
It was a pleasure to see that we are noticed by many players in the market, we feel this through the resonance we get from day to day. Our interactions so far with the many business partners from the region are a promising indicator for the excellent position we already are building as a first security cross-border reinsurer in those markets.
Deutsche Rück’s shareholders are the public insurers of Germany and they have more than 300 years of history and stability, which provides a sense of steadiness and reliability for the future. From a business perspective that is very helpful and clients from those regions appreciate this quality.
What we need in those markets are relationships that are based on trust, reliability and that are made to last. Our message is: “We’re here in Asia to stay”. That is the mindset we have when we are approaching these markets.
This has meant we have taken a step-by-step approach, learning during the process. As a cross-border reinsurer operating from Düsseldorf in Germany, this approach gives us the opportunity to learn more and for the market to learn more about us. I think that is a good basis for a long-standing and mutually beneficial relationship.
What are your plans for the future?
We will provide capacity as a following reinsurer—not as a leading reinsurer.
We want to progressively build a sound portfolio for the long term while deepening our understanding of the market.
What is important is that the business is sustainable and consistent in terms of profitability, balance, management of the risk. These are important parts of our vision.
Tarik Aouad is managing director for the Middle East/Asia department at Deutsche Rück. He can be contacted at: tarik.aouad@deutscherueck.de
Main image: Shutterstock / Rakchai Duangdee
