Fadi AbuNahl
Group Chief Executive Officer & Director

18 May 2017 — Mihaela CIRCU, Alexandru CIUNCAN
Fadi_AbuNahlXPRIMM: As global re/insurers are struggling with low interest rates, currency fluctuations and a changing geopolitical climate, which are the most important challenges the reinsurance industry has to currently face and how do you plan to tackle them?
Fadi AbuNahl:
Slowing economic growth, continued pressure on pricing, emerging risks (e.g. Cyber hacking) and regulatory changes such as Solvency II in Europe, C-ROSS in China, IRDA in India, and new South African regulations are some of the main challenges we face.

To tackle, or counter these issues we strive towards improving our competitive position and our value proposition to partners by strengthening our underwriting capabilities, and enhancing client services such as Risk Engineering and Training. Also by diversification in lines of business and efficiency through improvements in technology and mobility.

XPRIMM: In the number of future plans that you mentioned previously you spoke about the Asian market. How is the Asian market, China in particular, included in your strategy? What future do you see there?
Asia has been an important market for TRUST Re since inception, its growing importance propelled the opening of our Labuan Branch Office in Malaysia back in 2004 to enable us to better service our clients in the Far East and ASEAN regions. The capabilities of this branch continue to be strengthened.

More recently, we are working closely with several stakeholders to be able to provide solutions for the One Belt One Road (OBOR) initiative which involves projects across the Afro-Asian markets.

Regarding China specifically, we are monitoring regulatory developments there closely. We expect that ongoing implementation of C-ROSS may result in a protected market for domestic reinsurers - knock-on effect of more volatile reinsurance and retro pricing.

However, establishing a physical presence in China remains an attractive prospect for us in order to have direct access to some of the biggest countries within our geo-scope.

XPRIMM: Which are the most challenging aspects of a reinsurer activity in the CEE, possibly in need of further improvement? What are the expected measures in this regard?
Here we can refer to our market survey conducted in 2016, "The Outlook for Insurance and Reinsurance in Central and Eastern Europe". Understanding the challenges of reinsurance activity in the CEE also means understanding what stakeholders perceive, what they want, and meeting these expectations.

The first challenge to overcome is building awareness of insurance, to ultimately increase insurance and hence reinsurance penetration. More education and training and improved technical skills were seen to be necessary as well. Combined, and once delivered, these factors would help to offset challenges for reinsurers.

Competition is also a challenge, as merger and acquisition activity is anticipated; thus to survive reinsurers really have to offer added value. Those who innovate will be those who have the best prospects of surviving in an increasingly competitive market.

XPRIMM: How would you describe the progress made by your company last year?
Building resilience was critical to our performance last year. Market conditions were challenging, we continued to face the threat of emerging risks. We were proud that both Standard & Poor's and A.M. Best affirmed our A- rating with stable outlook, and S&P upgraded our Enterprise Risk Management from 'adequate' to 'adequate with strong risk controls'.

We made good progress towards our objective of expanding our service offering to our clients, introducing Aviation and Surety lines of business to our product offering. Also progress was made on a number of strategic projects which aim to increase operational efficiency. We also restructured the organization so that departments with common responsibilities can interact more closely and to improve operational synergy and efficiency.

XPRIMM: Which are your main objectives for the following period?
Our focus will always be projects which support the achievement of our Board approved strategic direction.

Improving our value proposition which differentiates us from other reinsurers is a key point of focus. Included in this is making sure we provide effective solutions for our partners, a wide range of products, value-added services and tailor-made solutions. This is in-line with our mission "to be innovative in providing reinsurance solutions and prompt responses, always".

Maintaining our strong, competitive position and strengthening relationships with partners is key as is further embedding of risk management in all levels of our organization.

Further improving our ability to lead by geography and by product is also a major aspect of our strategy, as is enhanced use of analytics.

XPRIMM: What is the added value that TRUST Re is bringing to cedent companies in comparison with some of the other market players?
Our Thought Leadership strategy and knowledge-sharing add value to cedent companies. Our expert team provides tailor-made in-house training, workshops, and seminars and participates in major industry events as panel speakers and in the production of white papers.

Business Partners' Seminars are held 2-3 times a year in various territories where TRUST Re operates. Last year a seminar called Managing Trends of Property & Engineering Insurance was held in Vienna for our Business Partners from Central and Eastern Europe. More recently, in April this year, we held a "Risk Management & Underwriting Practices" Seminar in Moscow for more than 30 senior insurance and reinsurance executives in Russia.

We also support market research activity so that both we and our partners can understand market trends and future business opportunities.

Additionally, there is an advantage in the diversity brought by the TRUST Re team itself, which comprises 40 different nationalities thus enhancing our ability to understand better the markets and cultures with whom we work.

XPRIMM: Which are in your view the most "promising" business lines in the CEE market and how is your company intending to take advantage of the opportunities offered by these lines?
Here also, we can refer to our market survey conducted in 2016, "The Outlook for Insurance and Reinsurance in Central and Eastern Europe". One of the reasons for conducting it was to understand market trends and opportunities, which is equally vital for us and our business partners.

One of the areas looked at in this survey is growth expectations for various lines of business. Survey participants thought growth in mainstream risks would likely remain fairly subdued. As a whole, in the CEE market they were thought to be highest in Life, Healthcare and Liability. Also important to note is that in a risk such as Cyber, which currently has low participation, 40% expected to participate in it by the end of 2018 compared to 5% today. Moreover, Life and Health is also likely to grow as a result of people realizing they cannot rely on state pensions.

As part of our objective of diversified growth, amongst others, we are exploring Cyber as a future part of our risk solutions. It is a fast growing sector and its increasing demand is something we cannot ignore.

Similarly, back in 2015, we introduced Life & Health reinsurance, it represented a natural extension of our service offering and reinforced our strategy of ensuring that we deliver products and services that meet our partner's needs.

Thank you and all the best for the future!

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