Could you provide a brief journey of how you arrived where you are today?
I was fortunate to have lived in several countries while growing up. This garnered my interest in learning different cultures and meeting different people. Since joining A M Best in 2001, this helped me a great deal in analyzing companies in Asia.
What does your role involve?
As the head of analytics, my primary role is to make sure that the tools and methodologies employed in analyzing a company are consistent. Listening to clients’ feedback and incorporating this into our analysis is also important. As Best’s portfolio is growing in Asia, I also spend time in building a strong analytical platform to support this growth.
What is your greatest achievement to date?
It is my family and the team. Insurance ratings in Asia are still in the early stages, including Takaful. We have divided Asia into five regions and have five teams specializing in each region. This is to ensure that we have strong local knowledge. Of course there is also some crossover of portfolios for training and consistency purpose.
As companies in Asia grow, they do more business with international reinsurers, while a number of international reinsure’s also strive to expand overseas. I worked with these companies over the last eight years and have seen some of them become quite successful. What drives me to work harder is when I hear from them that our service has helped them. It is always nice to hear from a new client that they were recommended to A M Best by our rated clients.
Which of your products/services deliver the best results?
Insurance rating is our main service. This includes our rating of Takaful. Our service is interactive and transparent throughout the rating process. We do communicate with clients the negative factors and the positive factors in deriving the rating outcome.
What are the strengths of your business?
Our focus on insurance and our local understanding has been our advantage to date. The long history of A M Best with its vast global insurance database has enabled us to conduct an effective default study which is updated regularly. Major risks are identified and quantified as well. This helps us in accurately quantifying the risks of an insurance company as well as understanding trends and implications in the market.
Rating is forward looking and we spend time in making forecasts and projections. These projections are stress tested as well. Although it may appear challenging to evaluate the qualitative factors of a company, our experience has taught us that the management of a company is important in realizing the company’s goals and forecasts. Thus, we spend quite a significant amount of time talking to the senior management during our rating meetings.
What are the factors contributing to the success of your company?
It is perhaps too early to be discussing ‘success’, with so much prospects and insurers still needing ratings from us at A M Best. A factor helpful on the course to success, and worth mentioning, is our strong international team (human factor) as well as the common goal that is shared among the colleagues. A M Best has been successful in the US for nearly 110 years and we are expanding that successful model and esteem throughout our operations in Asia and of course with local adjustments.
What are the obstacles faced in running your business today?
Obstacles can be translated into challenges that we can overcome. With so much room to grow in Asia for insurance ratings, I am quite the optimist. Evidently, the rating industry in general faces reputational risk and increased competition. However, after many years of developing ratings and with our renowned strengths as the leading rating agency for insurance ratings and our market information coverage worldwide, I am prepared to consider any challenges surmountable. We offer an independent opinion that is referred to by various interested parties in the financial industry as a whole. The drive to continue to make our service accessible to entities and parties that require it is the greater challenge we work to accomplish today.
Where do you see the Islamic finance industry in, say, the next five years?
I am glad to be able to work at a time when changes are happening and the Islamic finance industry is taking off. The most fascinating feature of this particular industry to me is its diverse nature. As long as the players remain self-disciplined, this diversity will translate into synergies and the Islamic financial industry will show strong growth. I would expect that in their development, companies would be less susceptible to external shock, and that is a positive factor from a rating agency perspective.
Name one thing you would like to see change in the world of Islamic finance?
Transparency is a very important issue, due to the very issue of diversity in Islamic finance. Lack of transparency would lead to uncertainty and misunderstanding. Standardization may be easier for the work of analyzing but as long as transparency is guaranteed, the complexity and diversity of Islamic finance should keep it interesting and enlivened.
I would also like to see increased cross-border communication including communication from the industry to others outside the Islamic world.