Funds Global talks to James Sutherland, CEO of Qatarlyst, about the growth of the insurance business in Qatar and what it means for the asset management industry.
In addition to its paronomastic properties, Qatarlyst also illustrates the Qatar Financial Centre Authority’s desire to exploit the latest technology in its attempt to develop a thriving financial services market. Qatarlyst is an electronic platform designed to bring buyers and sellers of insurance together in one secure, web-based location.
The genesis of Qatarlyst was formed back in 2007 when the QFC Authority was considering a new strategy that involved the reinvention of its insurance and reinsurance market. The QFC Authority was looking at what could be done to attract more underwriters and brokers to Qatar and to differentiate it from other jurisdictions in the region. It was felt this could be achieved through technology – to connect Qatar with the rest of the Gulf Co-operation Council (GCC) members and the international market.
The project started to take shape in 2008 – the long-term goals were developed and a technology supplier was selected. “We acquired a system, E-Insure, that was already tried and tested in the market rather than build our own because we wanted to move quickly,” says James Sutherland, chief executive at Qatarlyst.
The platform’s operating model is a simple one based on the establishment of an online marketplace for insurance, reinsurance and Takaful contracts. The objective is to have the entire process – from the original request for quotes, the resulting quotes, the contract negotiation and the placement through to the processing of the final endorsements – all take place on the Qatarlyst platform. “It is a logical structure based on creating one single version of the truth that can be accessed from one destination,” says Sutherland.
The platform also reflects the growing demands of an industry that is becoming more professional in its procurement processes and more familiar with the benefits offered by such online marketplaces. “They want procurement platforms that are sophisticated.”
The next stage for Qatarlyst is to add the claims process to the platform – the technology is ready, says Sutherland, but it would be better to have a larger user base before rolling it out. The final stage would be the development of a settlement service.
Qatarlyst had set about a programme of engagement with the local market and by the end of 2009 had 25 customers. This had grown to 60 customers by the end of 2010. “We have had a very positive reaction but we are looking to increase the user base because we need a high number of users for the platform to be useful to local brokers.”
In order to widen the platform’s exposure, Qatarlyst decided to amend the functionality so that brokers looking for a reinsurer could invite non-members on a read-only basis, meaning that they could download the various tenders and RFQs on the platform but could not respond through the platform.
Despite the encouraging growth over the last two years, a tipping point still has to be reached says Sutherland. “We still have to reach the stage where customers are coming to us to join the platform rather than the other way round. We are well established among the 160 brokers, insurers and reinsurers operating in the United Arab Emirates with most companies now signed up but with the service yet to be rolled out to many of them.”
Qatarlyst acquired the UK-based IR3K platform earlier this year, an acquisition that was based on two fundamental reasons, says Sutherland. “First, it gave us access to a wider market, particularly in London and Bermuda, and saw our customer base grow from 60 to 300. The acquisition also gave us immediate access to new technology and the ability to develop new functionality ourselves.”
It has also given Qatarlyst a base in the heart of the oldest insurance market in the world, Lloyds of London. “Having our premises in London gives us a magnificent opportunity to send staff over from Qatar to learn about the business and to have regular visits from London staff. Encouraging this two-way movement is an important part of the relationship between London and Qatar.”
The usual path for Western involvement in the emerging markets is for big international firms to plant an office in Qatar and send its staff over in batches, says Sutherland. “We have done it the other way – by acquiring a company based in London and sending our own staff over. It is also in part a branding exercise to build the Qatar name. Shortly, once the integration work is complete, the Qatarlyst platform will be sitting on desktops in the biggest and oldest insurance market in the world.”
A single management team comprised of both Qatar and London-based staff is the eventual objective for Qatarlyst, says Sutherland. “There are lots of areas where we can collaborate and share knowledge and I think that extends to other industries and not just insurance. For example, I see no reason why the asset management industry cannot have the same approach.”
©2011 funds global