GasanMamo's world first protected cell manager wins business
GasanMamo Insurance associate company Abacus Risk Management PCC Ltd - the world's first protected cell manager - has already netted some modest business since its registration earlier this year. And although it is early days, GasanMamo managing...
GasanMamo Insurance associate company Abacus Risk Management PCC Ltd - the world's first protected cell manager - has already netted some modest business since its registration earlier this year.
And although it is early days, GasanMamo managing director Albert P. Mamo says that the insurance group is confident the new company's portfolio is set to expand. Abacus Risk Management PCC has two overseas directors who are experts in this insurance discipline which is thriving in Malta.
It is welcome news for GasanMamo Insurance, which like every other business, is riding out these troubled times, led by a diligent management team which has learned some valuable lessons in its short history.
It is ten years since two insurance agencies, Galdes & Mamo Ltd (established in 1947) and Gasan Insurance Agency Ltd (established in 1975), merged to form what is now the country's second-ranked insurance house in terms of premium income. A member of the Gasan Group, GasanMamo's staff complement is made up of 111 full-timers and 24 part-timers across Malta's largest network of insurance branches and at the Gżira head office.
"The management team is fundamental to our business," Mr Mamo told The Times Business. "The merger, the underwriting business, and the operations since 1999 are a reflection of the team's professionalism."
Mr Mamo points out that from 2003 GasanMamo was already operating without a foreign principal. That period proved to be a veritable learning curve for management in investment and reinsurance. Malta's membership of the European Union was to bring about further radical change in the regulatory regime. As the team waded through the implications, it soon had to negotiate another wave.
"On September 15, 2003, the largest storm insurance losses in Malta were recorded and the claims literally flooded in," Mr Mamo recalls. "We were soon to learn what it meant to go it alone, without a principal, but we coped well. Reinsurance kicked in; it was a challenging time which helped us to grow up."
He says that over the years, GasanMamo's strategy has been to offer innovative, cost-effective products and packages (the newly installed travel insurance kiosk at Malta International Airport is a case in point) that would position the company among the leaders in the local market, despite changing purchasing habits.
"We live in a world where risk is omnipresent, but as a country we do not have a strong culture of insurance," Mr Mamo points out. "GasanMamo has a number of clients who are export- or overseas-oriented and they are the sort of people who tend to buy insurance more readily. Now, we have seen some of our clients downgrade policies as they feel the pinch of the downturn. Insurance is a soft target in times like these. In reality, we are selling a promise and people tend to wish that they will not need to cash in on that promise till things turn around."
Mr Mamo says that contrary to popular belief, insurance costs have fallen as corporate wealth has flourished. Within an increasingly competitive market, he admits that clients are becoming more demanding and the relationship between insurer and client initially tends to be antagonistic when claims are made. But, he points out, the "large percentage of satisfied clients" speaks for itself.
Motor insurance constitutes GasanMamo's core business - the company does not plan to venture into life assurance any time soon - and even that field has seen its fair share of upheaval in recent months. Prices for general insurance business, however, have not changed for many years: in GasanMamo's case motor insurance prices have not increased in the past six years. Mr Mamo says home and travel insurance rates have not changed "for as long as I can remember".
He explains that traditionally, motor insurance pricing has largely been based on practices inherited from the market's previous life. But the flood of high-value second-hand imports from the UK, spurred by sterling's weakness and recently introduced changes in Malta's registration tax regime, has presented insurers with a challenging balancing act.
"Until a few months ago, there was a relatively stable used car market. The value of used cars under the new regime has been drastically reduced," Mr Mamo points out. "We were suddenly faced with a problem establishing their value. In the past, it was a simple mathematical procedure. Now the value has dropped but the repair costs have remained the same. We feel we have managed to come up with competitive rates to level a gross imbalance. Besides, the improvement of traffic management and investment has resulted in a positive spin-off - the reality is the number and severity of traffic accidents has been reduced."
There are other challenges on the way. Under the Fifth Motor Directive, overall limits of indemnity are set to rise to €2.5 million next December and to €5 million in the near future. Wider harmonisation of European rules of jurisdiction is also in the offing. Mr Mamo remarks that while local legislation sets ceilings for indemnity, countries like the UK and France do not and there are serious implications for local insurers involved in settling pan-European claims.
Malta's insurance industry is no stranger to change. It finds its roots in the British and colonial markets when insurers sought to be represented throughout the Empire. Post-war economic development to the 1960s, 1970s and 1980s fuelled demand for insurance. But throughout the 1990s, British insurance companies experienced an intensive period of mergers and rationalisation, and began to withdraw from smaller markets.
Mr Mamo says it was a worrying time for Maltese insurance businesses as they watched their principals overseas merge and change course. Ironically, he recalls, when Galdes & Mamo and Gasan were negotiating their own merger, they were advised separately by Pricewaterhouse and Coopers and Lybrand, who later joined forces before the GasanMamo merger materialised.
"It is very important that insurers are in total control of their business," Mr Mamo emphasises. "Insurance has been, and probably still is, among the very few industries that offer tangible consumer protection. It is to the credit of the industry that it always embraced change. Consider that, globally, insurers have largely come out of this crisis with flying colours, bar AIG which circumstances were particular."
Mr Mamo says people tend to undermine the importance of insurance in terms of economic development. Many aspects of our lives, daily and professionally, he points out, are made possible thanks to products like professional indemnity insurance that allow people to buy cover for eventualities and just get on with it.
And although it is early days, GasanMamo managing director Albert P. Mamo says that the insurance group is confident the new company's portfolio is set to expand. Abacus Risk Management PCC has two overseas directors who are experts in this insurance discipline which is thriving in Malta.
It is welcome news for GasanMamo Insurance, which like every other business, is riding out these troubled times, led by a diligent management team which has learned some valuable lessons in its short history.
It is ten years since two insurance agencies, Galdes & Mamo Ltd (established in 1947) and Gasan Insurance Agency Ltd (established in 1975), merged to form what is now the country's second-ranked insurance house in terms of premium income. A member of the Gasan Group, GasanMamo's staff complement is made up of 111 full-timers and 24 part-timers across Malta's largest network of insurance branches and at the Gżira head office.
"The management team is fundamental to our business," Mr Mamo told The Times Business. "The merger, the underwriting business, and the operations since 1999 are a reflection of the team's professionalism."
Mr Mamo points out that from 2003 GasanMamo was already operating without a foreign principal. That period proved to be a veritable learning curve for management in investment and reinsurance. Malta's membership of the European Union was to bring about further radical change in the regulatory regime. As the team waded through the implications, it soon had to negotiate another wave.
"On September 15, 2003, the largest storm insurance losses in Malta were recorded and the claims literally flooded in," Mr Mamo recalls. "We were soon to learn what it meant to go it alone, without a principal, but we coped well. Reinsurance kicked in; it was a challenging time which helped us to grow up."
He says that over the years, GasanMamo's strategy has been to offer innovative, cost-effective products and packages (the newly installed travel insurance kiosk at Malta International Airport is a case in point) that would position the company among the leaders in the local market, despite changing purchasing habits.
"We live in a world where risk is omnipresent, but as a country we do not have a strong culture of insurance," Mr Mamo points out. "GasanMamo has a number of clients who are export- or overseas-oriented and they are the sort of people who tend to buy insurance more readily. Now, we have seen some of our clients downgrade policies as they feel the pinch of the downturn. Insurance is a soft target in times like these. In reality, we are selling a promise and people tend to wish that they will not need to cash in on that promise till things turn around."
Mr Mamo says that contrary to popular belief, insurance costs have fallen as corporate wealth has flourished. Within an increasingly competitive market, he admits that clients are becoming more demanding and the relationship between insurer and client initially tends to be antagonistic when claims are made. But, he points out, the "large percentage of satisfied clients" speaks for itself.
Motor insurance constitutes GasanMamo's core business - the company does not plan to venture into life assurance any time soon - and even that field has seen its fair share of upheaval in recent months. Prices for general insurance business, however, have not changed for many years: in GasanMamo's case motor insurance prices have not increased in the past six years. Mr Mamo says home and travel insurance rates have not changed "for as long as I can remember".
He explains that traditionally, motor insurance pricing has largely been based on practices inherited from the market's previous life. But the flood of high-value second-hand imports from the UK, spurred by sterling's weakness and recently introduced changes in Malta's registration tax regime, has presented insurers with a challenging balancing act.
"Until a few months ago, there was a relatively stable used car market. The value of used cars under the new regime has been drastically reduced," Mr Mamo points out. "We were suddenly faced with a problem establishing their value. In the past, it was a simple mathematical procedure. Now the value has dropped but the repair costs have remained the same. We feel we have managed to come up with competitive rates to level a gross imbalance. Besides, the improvement of traffic management and investment has resulted in a positive spin-off - the reality is the number and severity of traffic accidents has been reduced."
There are other challenges on the way. Under the Fifth Motor Directive, overall limits of indemnity are set to rise to €2.5 million next December and to €5 million in the near future. Wider harmonisation of European rules of jurisdiction is also in the offing. Mr Mamo remarks that while local legislation sets ceilings for indemnity, countries like the UK and France do not and there are serious implications for local insurers involved in settling pan-European claims.
Malta's insurance industry is no stranger to change. It finds its roots in the British and colonial markets when insurers sought to be represented throughout the Empire. Post-war economic development to the 1960s, 1970s and 1980s fuelled demand for insurance. But throughout the 1990s, British insurance companies experienced an intensive period of mergers and rationalisation, and began to withdraw from smaller markets.
Mr Mamo says it was a worrying time for Maltese insurance businesses as they watched their principals overseas merge and change course. Ironically, he recalls, when Galdes & Mamo and Gasan were negotiating their own merger, they were advised separately by Pricewaterhouse and Coopers and Lybrand, who later joined forces before the GasanMamo merger materialised.
"It is very important that insurers are in total control of their business," Mr Mamo emphasises. "Insurance has been, and probably still is, among the very few industries that offer tangible consumer protection. It is to the credit of the industry that it always embraced change. Consider that, globally, insurers have largely come out of this crisis with flying colours, bar AIG which circumstances were particular."
Mr Mamo says people tend to undermine the importance of insurance in terms of economic development. Many aspects of our lives, daily and professionally, he points out, are made possible thanks to products like professional indemnity insurance that allow people to buy cover for eventualities and just get on with it.