David vs. Goliath

On 24 August AM Best changed Oman Insurance Co’s ‘A’ (Excellent) rating from negative to stable and evoked a personal, positive sentiment.

This is perhaps the closest a whistle-blower can get to a ‘reward’ for upholding professionalism even at personal sacrifice.

As many of you know, credit rating criteria is a subject close to my heart and I have written about this before (Rated or not rated? What is the question?).
Oman Insurance’s board of directors has been bold enough to bite the bullet, resulting in wholesale changes in management echelons which should slowly but surely reflect in its strategy as well as its performance.

Old guard The concern that remains is that this is one company out of many that is still run by the ‘old guard’. Of course, in the spirit of the Arab Spring, it is easy to say: ‘Off with their heads.’ But are there enough new brooms in the market for a clean sweep?

One of the refreshing, albeit underlying, facts reading between the lines of the news piece is that AM Best does not seem to have struggled to elicit the information it needed.
Clear transparency There is now an air of significant transparency – a credit analyst’s Utopia – on the part of this company.

The same cannot be said when reading through similar reports for other companies in the region or, indeed, earlier reports of the same company.

One of the unstated but major considerations holding back certain ratings is the number of questions that either remain in analysts’ minds after exiting a credit review meeting with their clients, or that arise during such meetings but remain unanswered.

Gathering dust Although a lot of mathematics goes into rating reviews, the result has to reflect ethics as much as it does mathematics.

Sound corporate governance and risk management is embedded in all rating criteria, whether technical, financial, managerial, strategy or investment related.

One can write volumes in procedure manuals on corporate governance and enterprise risk management and, sadly, allow them to gather dust on a shelf somewhere in the company in between annual credit review meetings.

Some of the insurance companies in the region approach the annual, or biannual, credit rating review in the same way that a would-be bride and groom prepare for the big day – by engaging a wedding consultant but not a marriage counsellor.

Collective behaviour Corporate governance and risk management are all about internal culture and discipline. They are the mettle of the professional, engrained in one’s psyche.

The collective behaviour of professionals then creates the culture of sound corporate governance and risk management practice.

The opacity with which several insurance companies in the region run their affairs, the occasional wholesale management change in some, results eating into equity with others and the uneven playing field that some companies endeavour to maintain, all suggest that a culture of professionalism and sound corporate governance still needs to emerge in some of the Gulf Cooperation Council insurance markets, particularly in United Arab Emirates, the largest of these markets in the number of players.

Change and greater professionalism would need to come from within. Legislation and supervision will help, but these would only be the pebbles in David’s sling.

The champions of change, the Davids in the equation, would need to be you and me and every other Joe Bloggs working in and for the industry.

Posted in Uncategorized | Tagged | Leave a comment

Psychopathy versus governance


Having recently relocated from Qatar back to Dubai I had the unenviable task of sorting through the various insurance and risk related books and papers I accumulated over the years.

I do not know whether it was the mood of the day or the whistle-blowing experience in the recent past, but two particular literary pieces on the same topic caught my attention.

One is a short paper entitled, Psychopaths in the Boardroom and the other is Snakes in Suits: When Psychopaths Go to Work.

I started leafing through the two and certain statements leapt to life, particularly with reference to the regional (Middle East) insurance markets.

Probably the most prevalent statement with which most would probably concur is that of Dr Robert Hare, co-author of Snakes in Suits, when he says: “Not all psychopaths are in prison – some are in the boardroom.”

Senior management
A study shows that they are more likely (four times more likely in fact) to be found in senior management than in society in general. This, of course, is not region specific but universal. Otherwise how would one explain the debacle that rocked Lloyd’s in the 1990s?

Or, why would a 2001 study by European insurance regulators of failures or near failures of insurance companies within their respective jurisdictions all point towards a failure of governance?

Similarly, why would a more recent study of over 50 property and casualty insurance companies in the US fail to reveal that moral hazard at management level was a common ingredient in all.

Does the interplay of governance and management have to be an eternal Tom and Jerry show with Jerry (embodying the key management) inevitably outsmarting Tom (personifying ethics or governance) despite the elaborate thought and preparation that go into Tom’s schemes?

Within the GCC region the market has had and still has its fair share of psychopaths managing insurance companies. Needless to say, not all fall into this category; but the ones that do stand out.

In his paper Corporate Psychopaths: Theory of the Global Financial Crisis, Clive Boddy attributes the crisis largely to the increase of psychopathic personalities in senior management.

Spared financial issues
Thankfully the Middle Eastern insurance markets have been spared the full rigour of the financial crisis – other than investment operations leaving a dent in the profitability of some of the companies.

If you add this to the relative boom preceding the crisis as well as the market stability that ensued post-2010, all these factors sustain relatively stable results and, therefore, help to sustain the existence of psychopaths in management.

In the relative absence of formidable corporate governance and/or supervisory regimes, most boards in the region would not fix what doesn’t seem to be broken. But by the time the proverbial hits the fan the ramifications can be significant.

History of failures
However, looking at the history of failures and/or near failures – or perhaps ‘restructuring’ is a better term in a region governed by boardroom Omerta – psychopathy has certainly played a big role in Bahrain, Oman, Kuwait, UAE and Qatar over the past decade.

The following are some tendencies or manifestations of psychopathic behaviour. I am sure that many readers would quickly identify several C-suite people with one, some or all of these attributes:

Boddy describes them as: “Cunning and manipulative, and great at engineering situations. Although they don’t have emotions themselves, they can create emotional situations.”

Paul Babiak, co-author of Snakes in Suits, aptly describes them as: “They’re not stupid. They can decode what’s expected of them and play the part.”

They are generally charismatic charmers and, whether centre-stage or pulling strings behind the scenes, still bask in the limelight.

They are charming to those in power but show malice to colleagues, peers or subordinates.

They lack empathy in decision making.

Behaviour explained
Dr Hare explains the behaviour by comparing psychopaths to “cars with great power but weak brakes”, in that, while knowing the rules, they do not necessarily feel inclined to be guided by them.

How would one otherwise explain the behaviour of, say, a broker walking away with tens of millions of debts with various insurance companies? How would one also explain why insurance companies would have written such business and run such credit risks in the first place?

No point in companies crying wolf and pushing for Directive 2 in UAE when their senior management ignored internal credit policies and treated their board of directors on a ‘need to know’ basis.

This is, of course, one relatively recent example. But the past decade displays these traits, from ARIG’s forays into primary market and health insurance operations, to ONIC’s facultative reinsurance misadventure and a Qatari reinsurer’s delayed provisioning for ‘incurred but not remembered’ claims, to at least four UAE companies undergoing extensive organic changes since 2005.

Governance rewards
Companies in the region rely on regulation to provide governance or use regulators as the scape-goat for lack of governance. However, this blame game is completely unfounded.

Governance is not about systems or rules. Although it manifests itself in systems and rules, governance is a culture. A culture is the embodiment of collective behaviour. Therefore, sound corporate governance is positive or ethical collective behaviour supported (not legislated) by rules and regulations.

Enterprise risk management is more about ethics than it is about mathematics. Sound corporate governance, as a force of collective positive behaviour, is the only safeguard against psychopaths trying to ride roughshod.

Posted in ERM, Governance, Insurance, Middle East, Risk Management, Uncategorized | 1 Comment

Better is not good enough when best is an alternative


This week for many around the world is a time of recollection and quiet introspection.

It is a time when, at least from Good Friday to Easter Sunday once slows down the pace of work and search within for what is more meaningful than the materiality that otherwise surrounds us in our daily lives.

I have a lot to be thankful for in my life. And this will be the focus of my thoughts this weekend.

I also have a lot of ‘work in progress’ (such is life after all)… bridges that need crossing and intersections that may cause me to change course.

An old Greek word that is synonymous with this time of year is ‘Metanoia’. Although religious, psychological, psychoanalytical and other sources all sought to give their meaning or nuance to the word … probably the closest paraphrase of this Metanoia is ‘U-turn’. Also, the etymology of the word denotes depth of meaning. It is derived from two words ‘meta’ (beyond) and ‘noeo’ (perception). In meaning it is closely related to the word ’Jihad’ in Islamic faith i.e. “striving in the way of God” (al-jihad fi sabil Allah) or a believer’s internal struggle to live one’s faith.” Jihad and Metanoia are a process and not an end result; they are a continuous journey and not the destination.

What has been my journey recently? What do I have to be thankful for? Where am I now? Where am I heading?

Crossing the Bridge

2011 has been a roller-coaster year for me and my family.

With two job moves in one year, including a period of redundancy, 2011 was not exactly a bed of roses. Or maybe it was! Because despite the thorns it presented, I was constantly blessed with the support of my near and dear ones…. More soothing than roses in full bloom.

Redundancy offered me some time off; Some morning walks on the Doha promenade with my wife, more time with my daughter, a visit to my son who is studying in the UK and time to finish my thesis and attend my MSc graduation ceremony in the UK.

On the work front, it allowed me to regroup for a 2012 re-entry into the coal-face of the insurance industry, interacting directly with clients, re-applying what I have learnt over the years and learning new things as well. My previous C-suite positions had alienated me from all this. My new job rekindled the passion for the profession.

I am a firm believer that when one door closes another opens and with a family that constantly provides the wind beneath my wings (to borrow a phrase from my old friend Wayne) the only way is “onwards and upwards”. Dido’s ‘White Flag’ resurfaced as the battle cry over the past 12 months.

As a family, we are not completely out of the woods yet in that we’re living out of suitcases in Doha and Dubai for the time being. But there is light at the end of the tunnel and it doesn’t seem to be an advancing train.

Life’s a journey and it is, after all, what we make of it. My personal learning points from this are:

• The old adage: When life gives you lemons, you can turn them into lemonade;
• Walk away from negativity;
• Seek out the best in people but do not flog a dead horse;
• Never under-estimate the inner strength of near and dear ones .. but do not take them for granted;
• In John Bradford’s words, “There but for the grace of God go I.”


Life is, indeed, a journey. It is not a state of being. It is a constant state of becoming. Therefore it is a journey of learning and self-discovery; of learning from past mistakes and of continually improving oneself.

By implication it is a journey of self-betterment. It is a perpetual Metanoia. And on this note I wish to end this piece by relating Metanoia, i.e. one’s internal journey and struggles for self-betterment to derivative word, Metania.

Metania (not dissimilar to the Chinese kowtow) is a form of reverence … a posture in worship. One of Georges Florovsky (Christian Orthodox theologian) well remembered phrases is certainly, “Worship comes first, doctrine and discipline second.”
Worship is personal. It signifies and cements a relationship with a Supreme Being. Outward manifestations are no more than that.

What matters is the personal relationship with the Source that strengthens and nourishes us in our individual journey of Metanoa. Do not settle for less.

Posted in Uncategorized | Tagged | 2 Comments

The Photograph (In Remembrance of Christmas)

The stage depicting a quiet setting:

a babe in a crib sleeping silently;

the centre of attention.

His mother and father gazing fondly;

indeed, a scene of affection.


Call in the photographer to capture this moment:

“The fulfilment of a Prophecy; a powerful theme.”

“Did I hear right? Why isn’t he keen?”

Did he say, “there ain’t much of a subject here?!”

“What can we add so it doesn’t look bare?”

“Would it help if we decorate with holly, tinsel and a Christmas Tree?”


“We can also add Santa, the reindeer, a sledge full of toys,

puddings and cakes and candy that cloys.

How about some music to lighten the air?

Like Band Aid to show that we care.

But they seem to be resting on laurels of glories gone by.

They didn’t show up this year anyway.


“Carol singers maybe?”

“No not the drummer boy with his rat-tat-tums

but the big names, the famous ones

like Elvis lamenting his loneliness or

George Michael his carelessness

or the rest of the crap we listen to on Christmas Day.”


The stage is full to overflowing,

more than could be framed by a fish-eyed lens.

I’m sure Ebenaezer  enjoyed Christmas at lesser expense.

The ghost of the future predicts a worse fate for

owners of wealth misused than of wealth unused.


Suddenly the baby cries

(although the extras do not realise)


The photographer flinches uneasily.


“Do we have to put up with the wails of that waif?

Who is he anyway to be on this set?

Take him away. His place may be occupied by

Befania’s black cat.”


The child is removed.

History repeats itself year after year.

We, like the Magi, search in palaces

but the answer is, “He isn’t here.”


As for the photograph it remains bare.


James Portelli, Christmas 1990

Posted in Uncategorized | Leave a comment

Malta: One of the World’s Oldest Civilizations


A brilliant paper about the oldest civilisation in Europe.

Posted in Uncategorized | Leave a comment

A lighter shade of pale

‘Never’ and ‘always’ are absolutes. We do not live in a world of black on white. Rather, we experience realities in infinite shades of grey.

Nor do we uniformly perceive, live or interpret the same experience. In fact there is probably no such thing as ‘the same experience’ since experiences are inherently personal. How objective is ‘reality’? Take, for example, the attempt by a flotilla to deliver goods to Gaza through international waters that was intercepted by the Israeli forces. What is the reality of the situation for Palestinians, the Israelis and the world community? To say that the perspective of one nation is unfounded is as racist and intolerant as another nation taking the approach that the end justifies the means. But where does the balance lie?

It was once written that World War II was the war to end all wars. Has it? Have we beaten swords into plough-shares but are producing guns instead? The rise of the European Union from the ashes of war, and not the war itself, is what contributed to decades’ long peace and stability at least in member states. It is positive action that breeds more positive action or reaction. Negative ones, on the other hand … history is so replete with examples that I do not have to elaborate on this point. Good or bad actions are not circumstantial; they come from the energy within us.

Within this context I wish to draw some maxims that breed positive change in a world that is otherwise perpetually divided and underpinned by individual or collective wounds:

1. Give. And when you do, challenge yourself to give more. When you give do not expect anything in return and you will be cultivating providence beyond justice;

2. Impart knowledge. Like many good things in life, knowledge when shared multiplies;

3. In charity, seek to empower and you will also be nourishing dignity;

4. When wounded do not hate because you will hurt yourself and those around you even more. There is no such thing as positive or negative energy. You choose whether to put energy to good or bad use. There is only so much energy that we have …. Always seek to put it to positive use;

5. Practice patience and perseverance;

6. Never judge but do not be afraid to question;

7. Some things we believe because we understand, whereas others we understand because we believe. There is only so much that a mortal mind can question;

8. Humility bears no relationship to belittlement. Humility is “knowing and embracing one’s calling”. It is also the strongest weapon against self-conceit;

9. Challenges exist to overcome them. But it is important to learn when to push, when to pull and when it is time to let go;

10. Your inner being needs nourishment. A daily ‘quiet time’ is a source of both strength, enlightenment and recalibration.

Posted in Life's Fellowship, Uncategorized | Leave a comment

RSA and a Good Plate of Pasta

Today’s blog is more secular but still thought provoking nonetheless. It draws upon an example from my market environment but the learning points are universal.

Continue reading

Posted in Insurance, Life's Fellowship, Uncategorized | Tagged | 2 Comments