FAIR in Brief

   

          
   
The Federation of Afro-Asian Insurers and Reinsurers "F.A.I.R." was established in September 1964, to promote cooperation among insurance and reinsurance companies in Africa and Asia, through the regular exchange of information, expertise and the development of business relations.
Being a professional business association, FAIR is dedicated to the cause of regional cooperation and the development of the Insurance Industry in Afro-Asian Countries.
Under the umbrella of FAIR, the entities listed hereunder were established to realize its objectives. The respective activities are being undertaken as follows:
 
I.      FAIR Pools & Syndicate:

1.     FAIR Non-Life Reinsurance Pool, "managed by Milli Re, Turkey":

       The idea of using Reinsurance Pooling system for the benefit of Afro-Asian Companies had been discussed in every FAIR General Meetings and it was unanimously decided to set up the FAIR Non-Life Reinsurance Pool with effect from 1.1.1974 after the 3rd Meeting of the F.A.I.R. General Assembly which was held in Istanbul on the 11th-14th September 1972. The General Assembly also unanimously entrusted the management of the Pool to Milli Reasürans T.A.Ş (Milli Re).

 

2.     FAIR Aviation Pool "managed by Societe Centrale de Reassurance "SCR", Morocco":

        The FAIR Aviation Pool was created further to the 9th General Assembly of the FAIR that was held in Beijing, China from November 10th to 20th 1985. The first Executive Committee meeting was in Casablanca on June 28th and 29th in 1988.

                   It has one of the most important capacities in the Afro-Asian region with 127 Cessions splitted in Hull and Liabilities shares for 2016 UY.

                  The General Assembly also unanimously entrusted the management of the Pool to Société Centrale de Réassurance (SCR).

 

3.     FAIR Oil & Energy Insurance Syndicate "managed by Trust Re, Bahrain"

       With the vision, drive and initiative of FAIR, FAIR Oil & Energy Insurance Syndicate was established in order to provide a regional capacity in Oil and Energy related business from FAIR members and other sources, for risks located the Afro-Asian region. The Syndicate was further incorporated in January 1999 in the Kingdom of Bahrain as an independent legal entity by a Legislative Decree No. 7/1999, and started its operation on October 1, 1999. 

       Since its appointment as Managers, Trust Re has devoted considerable means and resources to develop the business of the Syndicate which gained a wide recognition as a sizable capacity and a reliable reinsurance security in the region.

 

4.     FAIR Natural Catastrophe Reinsurance Pool

      The 21st General Meeting of the Federation of Afro-Asian Insurers and reinsurers (hereinafter referred to as ‘FAIR’), Kuala Lumpur, 20-21 October, 2009 unanimously adopted the recommendation of the FAIR Executive Board to establish a REINSURANCE POOL for reinsuring the Excess of Loss Programmes catering to CAT events including Non marine CAT exposures, excluding Terrorism, but including Incidental exposures of other classes.

 

II.     FAIR Forums & Societies:
1)       FAIR Reinsurance Forum “FRF”
Representatives of FAIR Member Insurance and Reinsurance Companies participate in this Forum. The Forum avails a platform for all parties interested in the growth of the underwriting capacities of FAIR Member Companies, to interact through the exchange of business, experience and information. They participate and meet annually equipped by their reports, latest statistics, their reinsurance programme and/or their reinsurance capacities.
FRF Meetings continue to prove their importance and benefits for both Insures and Reinsurers. It is assumed that Direct Insurance Companies are encouraged to take more initiative, taking into consideration the changes in the international scenario.
2)       FAIR Oil and Energy Underwriters Forum “FOEUF”
The Countries constituting the FAIR area account for around 50% of worldwide oil production and more than three quarters of proven oil reserves.
The massive investments in the various oil and gas activities represent immense insurable risks with a commensurate premium base.
For Various reasons, Local Insurers in many oil-producing Countries have been unable to deal with, these risks which are characterized by specialized technology, high values concentrated in limited areas and with high loss potential, single handidly.
With this background, FAIR Oil & Energy Underwriters are called upon to face the challenges collectively to develop capacity and promote an underwriting expertise capable of dealing with the complex and sophisticated nature of Oil & Energy Risk. They are invited to come together and work more closely, under the umbrella of FAIR Oil & Energy Underwriters Forum, which holds its meetings in conjunction with FAIR Reinsurance Forum “FRF”.
3)       FAIR Life Insurance Professional Group, “FLIPG”
The Life Insurance penetration in the majority of the African and Asian countries is still too low. Millions of people, even those who have enough disposable income do not hold life policy.
In addition, the economic reforms are going on and the contemporary social and economic changes represent both challenge and big window of opportunities for the life insurers.
The increasing consumer sophistication, naturally razes the demand on quality and the growing moves toward more investment-linked products, encourage insurers to look at the techniques of investment management beside their continued role in risk i.e. death, medical and accident. In addition, the entry of the giant multinational insurers spurs fierce competition in the markets.
Bearing all this in mind, “FAIR Life Insurance Professional Group “FLIPG” was established to encourage life insurance Professionals and Managers to sit together to share and discuss the technical and administrative matters which impact their work.
FLIPG is formed mainly from representatives of life Insurance companies in addition to the interested composite and life reinsurance companies.
Members of the group name topics for the agenda of their meetings and FAIR Central office act as Agenda Manager, prioritizing and circulating the topics which are most named by members allowing plenty of time to compile information and the Members’ views and to prepare papers for each agenda item. FLIPG holds its meetings in the course of the Executive Board.
4)       FAIR Brokers & Consultants Society “FBCS”
Recognising the increasingly growing role of the Afro-Asian brokers aiming at developing the national insurance industry and enhancing regional cooperation and, considering the strategic goals and plans of FAIR which focus on mobilizing the national resources, to optimally profit from the existing potentials in the Afro-Asian markets and to open wider windows of opportunities for growth in a changing trading environment,
“FAIR Brokers & Consultants Society “FBCS” has been established, aiming at developing this profession and having a progressive and powerful arm to spur regional cooperation and to encourage business exchange among FAIR Members.
 
III.    FAIR Work Progammes & other Activities:
Revising the strategies of FAIR and mapping out its relevant programmes is a continuous process constituting the main concern of FAIR Executive Board, and FAIR Central Office.
Special attention is always given to the following issues:
1.     Educational Matters to Enhance knowledge and technical expertise:
Globalization offers immense opportunity for the insurance industry to grow and develop, particularly in the Afro Asian markets, where the elements of the competitive advantage, the relations, the emotional intelligence, the ethics and the social responsibility exist. 
With this convection, the education process comes at the forefront in the FAIR Work-programme as strategic issue, aiming at enhancing knowledge and expertise, developing human resources, capacities and attaining the same level of skills prevailing in the developed countries.
FAIR educational plan, takes into consideration that the levels of development of the Afro-Asian Insurance Markets may differ, but the core activities of cooperation are always and naturally built upon the common elements they have.
Specific attention and collective efforts are addressed to overcome the existing weakness in areas such as:
Risk Modelling, Computation of probable maximum loss, Building up rating structures, Analysis of risk profiles, Mapping out reinsurance programmes, Product orientation of Life Insurance, rating methods, marketing and distribution channel, Reviewing the manuals and disciplines in underwriting, and application of systems of risk management and IT orientation.
FAIR also encourages research work both at the Afro-Asian Research Institutions and at disperse level, in particular for the areas which are stated in FAIR Educational Plan. Cash prizes are yearly provided for FAIR Members’ Staff, for the Books, Research Work, in addition to the Articles published in FAIR Review.
FAIR members are invited to present their views in respect of FAIR educational plan which includes the Seminars, the Training Programmes, the Research initiatives, FAIR Trainers’ Body, FAIR Academicians & awards of excellence and FAIR Educational Archive.
2.     Risk Management & Loss Prevention to promote the relevant new concepts:
The application of Risk management concept in the Afro-Asian Countries is still not matured. It is adopted by a few large business houses and multinational companies, whereas for the vast majority, risk management continues to be nothing but insurance buying and in some companies the concept, is totally unheard of. This is due to the Lack of professional approach in understanding its purpose and the lack of disseminating others’ experience information on safety and loss prevention in the decision making authorities in the industries.
So far, the consultancy organisations in the field of, or rather, in the name of risk management, also tend to focus attention on insurance portfolio analysis for reduction of premium, leaving aside all other areas of risk management.
Therefore, a great deal of work is required to be done to inculcate and induce the acceptance of the concept and awareness of its benefits. Notable attention in FAIR Work Programme, is given to this issue aiming at popularizing the concept, its components and application which starts with the identification of risk and ends with the control of risk.
3.     Agricultural Insurance:
Agriculture is of critical importance to the majority of the Afro-Asian Countries in terms of Gross Domestic Product and employment, and thus plays a key role in meeting development objectives such as poverty alleviation and food security. It also represents for many Countries the most important manufacturing activities.
However, agriculture by nature, involves numerous natural, climatic social and human, risks which necessitate developing the agricultural insurance business. The main aim is to provide appropriate insurance covers for crops, livestock and other related activities. Many successful schemes have been formulated, under rural insurance business in FAIR Members’ Countries. Disseminating information and experience about these schemes represent an integral part of FAIR Work Programmes.
Standard Forms and wordings of models of Crop Insurance, Poultry Insurance, Livestock & Cattle Insurance, and Sheep & Goat Insurance, have been prepared. The Forms and the relevant certificates and reports are made available to FAIR Members upon their request, from FAIR Central Office Library.
4.     Takaful Insurance:
The Takaful and Cooperative Insurance industry has consistently registered strong growth in the last two decades not only in the number of Takaful Companies, the Takaful outlets affiliated to the insurance companies and the Retakaful companies but also in the Takaful premiums.
The significant growth of Takaful services proves that these companies answer a market need. They also maintain strong relationship with the conventional markets.
Hence, encouraging the largest number of Takaful, Retakaful and Cooperative & Mutual Insurance Companies to join FAIR, to exchange experience, to discuss issues of mutual concern and to work together is a principal objective of FAIR Strategy aiming at combining resources and mobilizing capabilities.
5.     Credit Insurance:
Considerable attention is given to evolving regional and sub-regional economic cooperation programmes in finance, investment and trade in FAIR Members’ Countries. The objectives are noble, but they cannot be realized through mere good will. They need an integrated approach to build up the infrastructure and to develop the required services in order to secure a balanced and sustainable growth.
In this respect, promoting Credit Insurance is a basic pillar for the expansion of foreign trade. The development of information bureaus, credit reporting agencies and mercantile offices is also a fundamental service highly needed for the development of a successful credit insurance. This can be better achieved through concerted efforts to mobilize the credit information sources on the Afro-Asian level. Some FAIR Countries in Africa and Asia have developed credit insurance portfolios, therefore, sharing know-how and experience will be of help to the other countries which only have academic knowledge about credit insurance and are willing to introduce this line of business.
Therefore, Credit Insurance Companies in Africa and Asia are called upon to join FAIR and to come together on a larger scale to exchange experience and face their challenges collectively.
 
V.   Issuing FAIR Review
The “FAIR Review” is published quarterly by the Central Office and circulated to Members free of charge. It is devoted to disseminate the research work, articles and information which relate to the above mentioned issues and to enhance professional knowledge among insurance professionals.
 
 
IV.    FAIR Conferences and other Meetings:
FAIR Conferences are organized biannually in Africa or Asia rotatively, according to a decision from the General Meeting, which is the supreme authority of FAIR.
FAIR General Meeting holds its sessions in the course of the FAIR Conference, to determine inter alia the general policy and work programme and to elect the President of FAIR and the Executive Board which shall meet at least once yearly and shall exercise all the powers of the General Meeting unless the latter is in session.
In addition, the following Standing Committees are appointed to perform and function as delegated: Financial, Educational, Agricultural Insurance, Life Insurance, Risk Management & Loss Prevention and Development & Cooperation Committees.