Distinctive Insurance Services

The following is an interview with Mr. Mohammad Asoudeh, Chairman and Managing Director of Alborz Insurance Co. Mr. Asoudeh holds an MBA degree from USA and has been in the insurance business for more than two decades.

Events- What was the purpose of establishing AIC to begin with?

Mohammad Asoudeh- AIC was established in 1959 as a private insurance company. It operated as such until a short while after the Islamic Revolution when the insurance business in Iran was generally nationalized and was taken over by the government. Since then, we have worked as a state-owned insurance company along with three other companies, Iran Insurance, Asia Insurance and Dana Insurance. I am pleased to say that during these 45 years, AIC has acquired an excellent reputation for fast underwriting and rapid and fair settlement of losses. If you ask the public, you will find out that many think that AIC is still a private entity. They cannot believe that AIC could possibly be a state-owned company. Today, we offer our services all around the country through 43 branches. We currently employ about 1000 people directly, and we also have 700 agents and work with almost all the insurance brokers in the Iranian insurance market. We offer both life and non-life insurance covers, which include commercial, casualty, liability and personal property. We also offer special insurance for high-tech products and services. During the past two years, we have had a growth rate of around 70% per annum in premiums. This is quite remarkable in a market with an average annual growth rate of about 40%. We carefully follow policies and strategies that we adopt selectively. Our main strategy is remaining focused on our core competencies, i.e. our employees, designing and supporting our products and sales services, while pushing ahead our agents and the agency mechanism as our main sales and service distribution channel. Our agents are our contact point with customers and as private entities they can provide better services albeit being small units.

E- What do you offer to your customers that the other insurance companies do not or cannot provide? What differentiates you from your competitors?

MA- Insurance is a service and about 90% of the insured do not face losses but they need insurance to protect themselves from probable losses. Naturally, we should have all our customers satisfied and interested in, and eager to, insure themselves and their property, especially those who have not faced damages or losses. What we offer are services and we provide these services with the proper terms and conditions that meet the clients’ needs. Insurance products may be offered in standard form and under traditional terms and conditions which lack creativity and innovation and at times are simply outdated and do not meet the clients’ needs. Some insurance companies view all customers the same way,while at AIC we segment the market and look at the needs of each segment and then decide on the basis of each client’s needs in each segment. As we are the smallest state-owned insurance company, we have adopted certain strategies to provide rapid service and the right service for each individual customer.

E- What are your long-term plans for improving insurance services offered by AIC?

MA- I would like to rephrase the question, if I may: the question should be what is our "vision" for the future in the next say five to 20 years? First, I should point out that obviously all this is contingent. The way we see it, within the next 10 years our economy will make a considerable shift towards privatization. This, in our mind, is inevitable simply because the government cannot provide and get involved in the execution of all economic activities. So, I think there is a good potential for the insurance business to be owned and operated by the private sector very soon. Governments can in certain areas somehow do and exist without insurance services. If any damages are sustained by any part of this huge system, i.e. the government, the costs and consequences may be sustained and indemnified in the annual budget, but this is much different for families, small businesses and many other economic entities. These entities cannot afford to bear such losses. So, insurance will gradually play a more important role in all our lives. The other major shift, we foresee, is the rapid progress in science and technology within the next say 10 years. I cannot even imagine what these changes will be since they will be rapid and fundamental, but I try to project these changes as much as it will affect AIC so that we will be prepared. What is most mportant to us at AIC is that we should be prepared to face rapid and fundamental changes and their consequences. We must be prepared to adapt and be flexible in facing the challenges from our environment. Of course, the question is who can better predict the future? Well, that is quite relative. We note here that time is an important element for all humans. Unfortunately, the underdeveloped or developing nations are less concerned about the value of this ever diminishing and passing resource. As such, we Iranians too, are wasteful of our most important resource. Only those firms, organizations, and nations who are aware of the value of time will be prepared and able to change with times. Only those who can accept change and resolve any conflicts arising from it, can survive.

It is particularly important to note that when speaking of any company we are talking about all parts of that company. It is not enough to have a lone champion as the managing director or persons occupying other positions. With about 1000 employees dispersed geographically around this country, all must participate and accept change to allow progress by the whole entity. Going back to the original question of “vision”, for me “vision” is not what we see as managers, it is what the company as a whole sees for the future. If all the company believes in change they will react accordingly, but only if they truly believe in it. To succeed, AIC, and I think others like us, should use human resources effectively and efficiently and must make appropriate use of technology to the fullest degree possible.

As a final point, I would like to emphasize that the insurance business is a service business and I would like to invite all those who are engaged in this business to act professionally.

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