Page 23 - October 2022 Issue 611 Part 1

Oussama Kaissi - CEO - ICIEC
The challenge for ICIEC in 2022 and beyond is to develop
a meaningful but balanced climate finance footprint based
on an inclusive Climate Action & Change Strategy
Oussama Kaissi, Chief Executive Officer of ICIEC, has over twenty eight years
of diverse experience in the insurance and Takaful industry, out of which 16
years are at the senior executive level. Graduated in 1987 from Indiana University,
USA and having worked in USA, KSA, UAE, Bahrain and Lebanon both in con-
ventional and Takaful companies, Kaissi has got vastly diversified exposure to dif-
ferent markets, cultures and business models. Throughout his career, he has
always been passionate and proved to be a strategic leader with a firm belief in
creating tangible business value through transparency, professionalism and
innovation to drive and deliver business results. Kaissi has consistently believed
that leadership is personified through one’s character and stature and that as a
leader, one must be firm with his decision. His approach has invariably been
characterized through a strong mindfulness of the goal at hand and the steps to
complete the goal and ultimately win the business. With Kaissi at the head of
ICIEC, the business has been ideally positioned to accelerate its focus on exe-
cuting against key strategies due to its strong relationships with clients, region-
al and international markets, and a proven track record of leadership.
Al Bayan Magazine has the opportunity to conduct a comprehensive interview with Kaissi and following is the Q & A.
• Al Bayan Magazine: The prospect of the global economy is very uncertain
because of the changing market conditions and geopolitical events. The volatili-
ty brings both opportunities and new challenges. What are the main concerns for
a multilateral credit and political risk insurer such as ICIEC?
- Oussama Kaissi: The truth is that no one knows how the world’s geopolitical, macro-
economic, and financial risks will play out over the next few years. Governments, econ-
omists, and corporations differ in their analysis of the various potential scenarios, and
their underlying assumptions and responses remain uncoordinated.
There is a consensus, however, that with increasing prices continuing to squeeze living
standards worldwide, tackling inflation must be the priority for policymakers. Tighter
monetary policy will inevitably have real economic costs, but delays will only exacerbate
them. The world takes its cue from the global gatekeeper institutions such as the IMF,
OECD, and World Bank, amongst others.
In its latest Interim Economic Outlook on 26 September, the OECD warned that the global
economy had lost momentum in the wake of Russia’s war of aggression in Ukraine, dragging
down growth and putting additional upward pressure on inflation worldwide.
The Outlook projects global growth at a modest 3% this year before slowing further to
just 2.2% in 2023. This is well below the pace of economic growth projected before the
war and represents around US$2.8 trillion in foregone global output in 2023.
The war, says the OECD, had further pushed up energy prices, especially in Europe,
aggravating inflationary pressures at a time when the cost of living was already rising
rapidly around the world due to lingering impacts of the COVID-19 pandemic. With busi-
nesses across many economies passing through higher energy, transportation, and
labour costs, inflation is reaching levels not seen since the 1980s, forcing central banks
to tighten monetary policy settings faster than anticipated rapidly.
This is in contrast to the earlier IMF World Economic Outlook Update in July 2022,
which paints a ‘Gloomy and more Uncertain’ immediate future. The tentative economic
recovery in 2021, boosted by a rebound in GDP growth, quickly dissipated due to the
geopolitical developments and economic shocks that followed in 2022 on the back of a
world economy already weakened by the ongoing COVID-19 pandemic.
These include global output contracting in Q2 2022 owing to worse-than-anticipated
economic downturns in Russia and China reflecting COVID-19 outbreaks and lock-
downs; lower than expected US consumer spending; higher-than-expected inflation
worldwide led by the US, EU, and OECD countries such as Turkiye where inflation is
set to rise to 72.1% triggering tighter financial conditions; and further negative spillovers how has the industry been impacted in general, and what are the prospects?
from the war in Ukraine.
The IMF forecast GDP growth to slow from 6.1% last year to 3.2% percent in 2022, 0.4
percentage points lower than in the April 2022 World Economic Outlook. Global inflation
has been revised due to rising food and energy prices and lingering supply-demand
imbalances and is expected to reach 6.6% in advanced economies and 9.5% in emerg-
ing and developing economies this year.
In 2023, says the Fund, “disinflationary monetary policy is expected to bite, with global
output growing by just 2.9%”.
We acknowledge that the downside risks are mounting partly because many of them
predate the pandemic, which, together with the impact of Ukraine, will persist for some
years to come. Their mitigation is dependent on how long the Ukraine War continues;
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how effectively the world, especially Europe, copes with the resultant energy crisis
where considerable increases in the wholesale price of gas have led to energy poverty
disproportionately affecting the lower paid in society; in the case of developing coun-
tries, many of whom are the OIC Member States, tighter global financial conditions is
already inducing debt distress in several economies; and geopolitical fragmentation
could impede global trade, investment, and cooperation.
Against such a global macroeconomic background, policy implementation of concomi-
tant pressing issues such as mitigating climate change by the transition to clean and
green energy governed by the net-zero targets and timelines set by the Paris Climate
Agreement and subsequent COPs, and achieving the targets set by the UN SDG agen-
da by 2030 are being delayed. Governments are reverting to form by re-commissioning
or extending the use of coal-fired power stations and nuclear plants and increasing fos-
sil fuel extraction and fracking to reduce their dependency on Russian gas and oil
imports, if only for the short-to-medium term.
The high inflation environment, subsequent cost of living crisis, and rising interest rate environ-
ment in many markets have had knock-on effects. While the economic impact of the pandemic
is waning, the Russia-Ukraine crisis has prevented full economic normalization globally, impact-
ing growth across several industries. The WHO, for instance, in mid-September, reported the
lowest incidence of new COVID-19 infections since the onset of the pandemic in March 2020.
But some pressing sectors will suffer. ESG and sustainability trends have taken a back-
seat as focus shifts to cost reduction and food security, and the price of the green tran-
sition has increased due to high commodity prices. Elsewhere, investment into digital
technologies has slowed in some sectors as companies face a higher cost of capital.
The one certainty is that the current economic shocks will contribute to significant glob-
al macroeconomic volatility, which could be with us for a few years. If there is inade-
quate mitigation and relief help from governments and global institutions, then the dan-
ger could be elevated social and political risks over the next two years, and the MENA
region, Africa, and Asian countries are among the most susceptible to these risks.
Global trade has been more resilient during the pandemic
than during the 2008-09 financial crisis
• As the dedicated multilateral Islamic credit and investment insurer of the OIC countries,
- Trade and investment have a vital role in building back a better and fairer in the post-
COVID-19 economic recovery and mitigating the economic shocks associated with the
disruptions caused by the Ukraine conflict and the global economic slowdown.
According to WTO’s World Trade Report 2021, global trade has been more resilient dur-
ing the pandemic than during the 2008-09 financial crisis. During the latter, global trade
touched US$4.8 trillion, while during the pandemic, it reached US$6.2 trillion, despite
the economic, health and social impacts, especially supply chain disruption. The swift
rebound in merchandise trade was sustained throughout 2021, and by year-end, levels
were already surpassing those in 2019.
According to the Berne Union Export Credit and Investment Insurance Industry Report
2021, the industry returned to a surer footing in 2021 with a solid recovery in new busi-
ness levels across short and longer-tenor business lines. Although claims have contin-
AL BAYAN ECONOMIC MAG - ISSUE 611 - OCTOBER 2022