Accruing more than 10 years of expertise in the sector, can you please talk about the evolution of the Mongolian insurance sector, which has been constantly rising during these past years thanks to the booming of the mining industry and the growth of the middle class?
After graduating from University and coming back, Mongolian commercial insurance companies had just been established and the economy looked nothing alike compared to now. The public had no knowledge of the insurance sector and its benefits.
That is why you have established an NGO for educating the public…
Yes and not only to try to sell our products, but with every single visit when we meet with clients our role is to give further insight about the advantages of being covered by insurance and we are holding seminars as well. Our economy is growing rapidly and following the trends of the insurance sector we would like to keep our position in the market and keep moving forward by introducing information and communication technologies in order to be more efficient serving our clients and made the information more accessible for the public so they can understand the benefits of our insurance products.
Since we became an open country, the citizens were allowed to freely travel abroad and those people – the ones that went abroad – realized how important was the acquisition of insurance products.
The sector is still in its infancy and many of the legal frameworks are just being introduced like Drivers Reliability Insurance that has become mandatory for all drivers. From an experts perspective there are much room for improvement in the legal agenda nevertheless the fact that these changes are taking place is showing the concern of both public and private institutions of the sector.
Can you please elaborate more on the insurance services that you are providing to the agricultural sector?
As you have mentioned before, Mongolia is not just about mining and there are booming sectors such as agriculture with lot of potential for being developed. Yet we don’t have any insurance to cover this sector even though it’s mentioned in the legislation that the agricultural sector should be protected by insurance. To be honest, none of the insurance companies have the courage to enter this segment. The reason behind this obstacle is that Mongolian agricultural sector operates under high risk. The climate is harsh and the temperatures have extreme deviation and on top of that even though Mongolia has massive landscape, the agricultural zone is situated in a concentrated area.
Livestock insurance is not easy however it is slightly different than agriculture as it is a multilayered system. For each level each actor holds a part of responsibility and the first one t on the herders themselves. They have to preserve and take care of their livestock, the second level is the the one of the insurance companies who will protect and compensate their losses and at the third level is the government who will take responsibility during extreme hazards. Compared to the agriculture sector, livestock is spread around each corner of the country. This means, if there is an extreme hazard in one area and many livestock died, in other areas you will find that the livestock is growing.
On behalf of the readers, investors and partners I would like to get a deeper insight about your services and how distinctive your company is from the competitors? Can you tell us some examples of your business activities?
Regarding the tourism sector, Mongolia has plenty of opportunities unexplored. Although we do have reinsurance for Mongolian tourists going abroad and tourists who are coming to Mongolia can buy insurance once they come here. Others promising sectors that we are covering included health insurance and mining sector insurance. Our reinsurance company is Hannover and when it comes to mining, property and business insurance we have our backs covered 100% for providing best quality services for our clients.
Do you provide foreign transportation insurance?
Yes of course, we can provide insurance all around the globe and transportation insurance also inside Mongolia. The tariffs depend on what type of transportation, which route and type of products. If there is a company in United States that needs this type of insurance we can cover them while they are doing their activities in Mongolia but also out of Mongolia.
There are always two sides of the coin, as the major insurance company you are covering the general public as well as top level companies in the country. How are you providing services to these major companies such as Khan bank, Capital bank, Mongolian customs that are critical to the economy?
Initially we did not concentrate our aim on corporate entities especially banks but instead we heavily focused on traditional services such as property insurance and drivers’ reliability insurance. Since I worked in Mongol Daatgal, I personally consider myself as one of the first bridges, which connected the insurance sector with banks. One of the biggest accomplishments of the company was to cover those citizens that took a bank mortgage, so we offered them to insure their houses at the beginning of the loan process. However now it’s compulsory to get life and property insurance in order to receive the IPOTEC mortgage loan. Also in order to reduce the risk of the banks I have introduced car lease insurance which became quite popular and these type of insurances did not just become popular with our clients but in the whole insurance market.
What is the current market share of Soyombo Daatgal?
We don’t hold the mass of the current market share, probably around 10%. The current Soyombo daatgal is totally different from the one that was established 17 years ago. I would like to share a bit of the history of Soyombo Daatgal: in 2009 Soyombo Inc, a newly found insurance company was merged together with the old Soyombo Daatgal and we revolutionized its management. The before mentioned Soyombo daatgal was under the control of Zoos Bank and when the bank stopped its activity Soyombo daatgal also halted its business. However when the new Soyombo Inc acquired Soyombo daatgal we started the real business and this is why even though Soyombo Daatgal has such a long history. In the last two years we have succeeded in leading the market with our growth. Since 2011 we have leaded the insurance company by growing with clear objectives and in 2013 we focused on quality and not on any type of ranking.
What is the distinctiveness of Soyombo Daatgal?
Without any doubt we have one of the best human resources in the whole sector as all of our employees were graduated from overseas university and have been working in the insurance industry for at least four to five years. The most part of the employees were in an administrative position in different insurance companies previously before coming here. So we can say that all the leading characters of the sector are working here as a team for providing best quality services and understand the needs of every client. Other asset is that all the managers and directors in our company can fluently speak various languages.
USA Today is one of the most widely read newspaper in the world and the only newspaper which reaches the 50 states of United States of America. It is the first time that this newspaper is in Mongolia doing a special sectorial focus on the insurance market. Please elaborate on why you have chosen Hannover Re, an American-German based company to collaborate with your company?
Many of our employees previously worked in Mongol Daatgal as I have mentioned and during that time we managed to collaborate with Hannover Re, because of its expertise we have keep the relationship.
If there is any American company with interest in working in Mongolia with our partner with Hannover they will be totally insured. This is something that works in our favor.
What I want to make clear is that so far we have never received any assistance from our partner. However our clients will feel more secure knowing that we have this partner. We already extended this year’s contract and we will do it again in the future.
Are you seeking out new partners?
Business is business so if there is a company that promises us better rate and deal of course we will be willing to participate.
You have been speaking about the advantages of Soyombo Insurance, in which aspects would you like to see Mongolian and United States companies working more closely together?
It is impossible to compare American insurance companies and Mongolian companies, but American companies might benefit from the rapidly growing demand in Mongolia. For instance, Oyu Tolgoi project is a major client but even all the Mongolian insurance companies will have difficulty in covering this client. As for foreign companies they have the experience and financial potency to cover such large clients they should partner with our market expertise to cover those kind of projects. As for Mongolian companies we would like to share the risk and get reinsured and work as their local insurance company. In Mongolian insurance law, it is stated that if the insured business is operating inside the Mongolian border, with no concern of foreign or local ownership, it has to be insured by Mongolian insurance company.
Please let our readers know, why they should chose Soyombo insurance from all the other competitors in the market?
We have the expertise, the connections and the coverage of the whole nation with our 29 branches operating and the most well performance management team.