Issue 16 July, 2009Baalbeck Festival and ARABIA Insurance,a solid partnership in promoting culture.

Baalbeck Festival

Lebanon continues to prove to the world how well it can weather the winds of instability, when the Leba-nese are united and when love prevails. In 2009, Jeita Grotto was globally nomi-nated for one of the Seven Wonders of the World; also Beirut was elected the “Cap-itale Mondiale du Livre” by UNESCO.This sheds the light on another Leba-nese tradition triumphing since 1956, the “Baalbeck International Festival” event, acknowledged by the “Europe-an Festivals Association” since 2002, and a true example of perpetuity, pas-sion, and distinction, embodied in a tradition of Art and Expressionism.

At ARABIA Insurance, heri-tage, tradition and culture are the air that we breathe, and continu-ity and growth are our pulsing heart.It is with assertiveness that we, once again and for the seventh year in a row, put hand in hand with the Baalbeck In-ternational Festival’s Committee to host an even more glamorous and inspiring festival. A festival that engraves the will and quenches the thirst for more culture.

God bless Baalbeck International Festival’s Committee for strengthen-ing Lebanon’s position as the cen-ter of civilization, love and culture.

Yasa & ARABIA Insurance an enhanced partnership for Safety Promotion in Lebanon

ARABIA insurance is always conscious about social responsibility and devoted to playing important roles in promoting environmental and social causes.

Further to sponsoring “The Reform of Driver Licenses in Lebanon” Program, launched by The “Youth Association for Social Awareness” (Yasa) in 2007, ARABIA Insur-ance is furthermore supporting Yasa in the development and release of a Documentary for child safety in Lebanon.This documentary is produced by YASA with wide cooperation of the committee of transport in the Lebanese parliament, the General directorate of education in the ministry of education, the Lebanese institute for childrenrights, and the Lebanese Association for School Safety Awareness.The documentary will display the huge challenges that are facing our children in different locations: Vehicles, Roads, playgrounds, gardens, camping, homes…It will be a major tool for parents and teachers to encourage them for safer practices, and to learn by sharing other lessons and experiences from people who faced serious injuries due to child neglect and unsafe behavior.

This documentary will also raise public awareness on the following issues:-Safety as a basic right for children-Role of parents in behaving in a safe way to be the good example to their children-Role of Nursing and healthcare in safety promotion in schools-Dangers that face children in different ages-Prevention from all kind of unintentional injuries that may face children-Transport safety-Safety inside educational institutions

ARABIA Insurance conveys its appreciation to Yasa for all the efforts undertaken in injury prevention programs and road safety promotion in the Levant and the Region.

Fady ShammasChief Executive Officer

Arabia Insurance Company

Issue 16 July, 2009

Top Life Producer Of The Month - Year 2008

I am very sad to announce to you the departure of our dear Bishara Haddad. Bishara loved Arabia, and was loved by Arabia, just in the same manner.Bishara knows that he is going to be missed and cherished always by Arabia, who owes him a lot of dedication and recognition for the knowledge and the many fundamental contributions he had given it. Member of Arabia’s Audit Committee, Bishara Haddad will always be remembered as the honest, descent man, with high morality and eternal smiling face. We wish to tell him: Bishara, you are in our thoughts and in our hearts, and you will be missed a lot!! May your pure soul rest in peace.

In Memoryof Arabia’s

friend: Mr. Bishara

Haddad

Congratulations to all winners for their outstanding performance during 2008.

Wishing all producers the best of luck in securing high targets in 2009.

“ WEIGH YOUR EFFORTS IN GOLD” Gold coins winners for achieving the “Top Life Producer of The Month” position during the year 2008

Between 1990 and 2000, Lebanon was able to gain an average of 1,000 hectares of forest per year, leading to a reforestation rate of 0.83% per annum. However between 2000 and 2005, these modest efforts decreased to 0.76% per an-num. Additionally, other woodlands (non-forest wooded areas) have shown a decrease of 6000 hectares between the years 2000-2005. The only solution for the deforestation problem is the reversal of this trend, through reforesta-tion, i.e. planting more trees.ARABIA Insurance joined hands with the Ro-tary Club of Baabda, to support their effort to reforest Lebanon, through their project TREES 4 LEBANON.

On May 23rd, 2009, ARABIA Insurance, along with all supporters, gathered around the commit-tee of the rotary club of Baabda and its strategic partner World Vision Lebanon (humanitarian organization), in the Cerdars forest of Bchar-reh, for a plantation ceremony during which Mr. Nazih Ghattas, presented their strategic plan for reforesting Lebanon.After the ceremony, all attendees had the privi-lege of actually planting cedar trees with their own hands. 500 cedar trees were planted that day.The cedar is emblazoned on the country’s flag, and in our heart… let’s keep it growing.

TREES 4 LEBANON

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Issue 16 July, 2009

Our warmest wishes to our colleagues in the Head office , Abu Dhabi and Qatar branches; Christian Fransawi, Rita Younes, Hala Ajhar, Hiba Mahfouz, Fady Orfaly, and Nada Ward. Congratula-tions on taking the leap, and we wish them a happy wedded life ahead.

The development and en-gagement of our people re-mains at the core of Arabia’s strategy. During 2008, 182 trainees at-tended a total of 60 different seminars and on the job train-ing, out of which 14 were technical insurance, 25 Eng-lish and computer, 4 finance and audit courses. Addition-ally, Arabia management and staff attended a total of 9 in-house, local and international conferences.

The vision of ARABIA In-surance is to be one of the leading professional Pan Arab insurance companies. Hence, ARABIA strives to maintain a consistent technique of op-eration across all branches.Consequently, an Operations Guidebook has been devel-oped and circulated to all branches in the Arab Region.

The Operations Guidebook is designed to unify the poli-cies and procedures that are common to all branches, and to compliment the Branch’s Technical Manuals. It is in-tended to be used by Manage-ment and staff members of all branches. It is an essential ref-erence for the day-to-day op-erations and as a training tool for newcomers to the branch.

OPERATIONS GUIDEBOOK

Trainings, Semi-nars, and Work-

shops

Congratulations!!

Christian Fransawi & Rita Younes were wed on 19/10/2008Hala Ajhar & Jimmy Rashed were wed on 26/12/2008Hiba Mahfouz was wed to Wael Kamal on 10/04/2009Fady Orfaly & Nowara Kheir were wed on 18/4 /2009Nada Ward was wed to Khaled Ezzedine on 3/5/2009

Nada Ward & Khaled Ezzedine Christian Frensawi, Rita Youness

Hiba Mahfouz , Wael Kamal

Fady Orfaly & Nowara Kheir

ARABIA Insurance in the Career Fair Organized by University of Balamand

ARABIA Insurance has always played a positive role on the educational level, having the interest of University students at heart.

The Career Fair, a one-day event held at the University of Balamand (UOB), one of the most prestigious universities, based in the North of Lebanon, gives UOB students who are about to graduate, the opportunity to meet leading companies in Lebanon and abroad. The Career Fair also provides the participating company the chance to recruit competent graduates at the bachelor and master levels. During the fair, ARABIA Insurance met & interviewed talented and skilled students, hoping that both ARABIA Insurance and students would mutually benefit from this outstanding opportunity.

Our warmest wishes to our colleague Mr. Abed Nehlawi in the Head Office, for becoming the father of a new Baby Boy “Anas”, born on Saturday 30/05/2009 .

2

Issue 16 July, 20095

ASSETS

Cash and banksHeld for trading securitiesAvailable for sale securitiesHeld-to-maturity securitiesInsurance receivablesReinsurance assetsDeferred acquisition costsOther assetsInvestments in associatesProperty and equipmentIntangible assetsInvestment propertiesDue from Life divisionAssets held for saleTotal Assets

Assets of the Life Division -- Appendix ICombined Assets of General and Life Division

LiabilitiesBank borrowingsHeld for trading derivativesInsurance payablePayables to insurance and reinsurance companiesTaxes payableAccrued expenses and other credit balancesProvision for outstanding claimsUnearned commission from reinsurersUnearned premiumsProvision for employees end-of-service indemnityProvision for contingenciesDeferred tax liabilityLiabilities related to assets held for saleTotal liabilities

EQUITYShare capitalTreasury sharesLegal reserveGeneral reserveReserve for asset revaluation surplusForeign currency translation reserveCumulative change in fair value of investment securitiesSurplus on sale of treasury sharesRetained earningsProposed dividendsEquity attributable to equity holders of the parentMinority interestTotal equity

Total Equity and Liabilities

Liabilities of the Life Division- Appendix INet Assets of the Life Division-Appendix ILiabilities and Net Assets of the Life Division - Appendix I

Combined Equity and Liabilities of General and Life Division

2008 USD

106,308,724149,055

63,303,8242,439,407

39,488,29338,243,597

6,948,3603,872,095

08,321,169

561,8381,041,7379,129,794

47,164,851326,972,744

31,837,670 358,810,414

0158,798

19,771,11810,064,679

2,658,4834,536,082

65,685,2581,796,916

55,968,6902,889,7492,235,5961,538,094

57,351,741224,655,203

33,830,846(4,468,178)11,276,94913,010,661

4,568,690(136,747)

4,523,31641,213

17,913,9811,691,542

82,252,27320,698,649

102,317,541

326,972,744

29,062,2832,775,387

31,837,670

358,810,414

2007 (Restated)

USD

96,028,2231,949,861

61,359,4810

29,662,62337,188,833

5,387,3235,390,9085,433,1748,255,428

369,979999,989

13,970,67148,544,685

314,541,177

34,598,824 349,140,001

557,1702,028,253

11,393,1588,149,2281,447,0612,437,290

60,520,2751,602,231

42,319,3822,380,6456,250,768

70,01758,826,642

197,982,120

33,830,846(19,389)

11,276,94913,010,661

4,568,690(91,506)

8,284,26743,572

18,353,8498,457,711

97,715,65018,843,407

116,559,057

314,541,177

31,551,8533,046,971

34,598,824

349,140,001

December 31,Consolidated Balance Sheet

Note: Above figures are for presentation purposes only, and represent the US$ counter-value of the original LBP amounts in the Audited F/S

Issue 16 July, 2009

أقامت شركة التأمني العربية مأدبة غذاء جلميع موظفيها في لبنان في برج احلمام – برمانا وذلك ضمن فعاليات جلنة النشاطات اإلجتماعية للشركة. إنتهز الرئيس التنفيذي للشركة السيد فادي شماس هذه املناسبة ليثني الشركة وجهود جميع موظفي اإلجتماعية النشاطات على جهود جلنة

في جميع اجملاالت.

وقد ساد احلفل جو من األخوة والزمالة وتضمن فقرات ترفيهية وغنائية ومت سحب على أسماء احلضور بالقرعة ، فازت على أثرها الزميلة جنوى منيمنة

ببطاقتي سفر ذهابا« وإيابا« إلى إسطنبول.

وفي نهاية احلفل، متنى احلضور تكرار مثل هذه املناسبات اإلجتماعية التي تزيد روح اإللفة والتعاون والتضامن.

Global Policy agreement between ARABIA Insurance Company and Arab Bank PLC

In June 2009 ARABIA Insurance entered into an Agreement with Arab Bank Plc by which all Personal Loan Borrowers will be covered under one Group Life scheme.

The Agreement covers Arab Bank’s Clients namely in Lebanon, Bahrain, Sultanate of Oman, Qatar,United Arab Emirates, Syria, Jordan, Yemen, Palestine and Egypt.

In July 2009 another group Life Scheme that covers all Credit Cardholders of the Arab Bank, in the above countries, will be enforced

Looking forward for a flourishing business partnership with the Arab Bank.

4

Issue 16 July, 20097

General ARABIA Insurance Company (GAIC) and Jordan Ahli Bank have initiated the Bancassur-ance business in Jordan with effect from 1/6/2009.The retail market in Jordan, aside from motorinsurance, has very high potential for growth, as Bancassurance premiums in Jordan have increased from 15K in 2005, to 195K in 2006, to 1.3M in 2007, to over 2M in 2008, as per Mr. Yacoub Sawalha the General Manager of GAIC-Jordan.

He added: we need to concentrate more on life products because of their synergy with bank-ing products, particularly deposit and investment products, as both relate to long-term investments and fund management. Life insurance products areintegral to a person’s financial planning, retirement planning, children’s education planning, long term care and investment planning; for that GAIC de-signed simple life products (،شهادتي حمايتي، أسرتي، so as to facilitate easy understanding and (مستقبليquick turnaround time in sales.

Property insurance is relatively complicated, and selling it requires specialized skills and personal attention. With higher turnaround time and rock bottom prices, due to intense competition, GAIC designed a series of competitive targeted products سيارتي) سكني، مكتبي/شركتي، صيدليتي، to meet (عيادتي، customers’ needs in this insurance segment.

The potential of Bancassurance lies not only in capturing market share based on the existing pre-mium turnover, but also in increasing insurance penetration thereby increasing overall premium turnover. Jordan Ahli Bank have extensive experience in selling both existing customers (for retention and cross selling) and non-customers (for acquisition and awareness) for both retail and corporate, by successfully mining their customer database, and through leveraging their reputation and distribution channels of 47 branches across Jordan.

وفقا ً لتقارير هيئة اإلشراف على التأمني في سورية و البيانات التي نشرت عن أعمال العام 2008،

أن ترتيب شركة التأمني العربية – سورية جاء رابعاً بني شركات التأمني الوطنية اخلاصة،

و في املرتبة اخلامسة في حال إدراج املؤسسة األخذ دون ذلك و اجلدول، في للتأمني السورية العامة في املنشور املرفق وفق اإللزامي التأمني االعتبار بعني مجلة التأمني و املعرفة العدد 2 لعام 2009 الصادرة عن

االحتاد السوري لشركات التأمني.

و نود اإلشارة إلى التطور احلاصل في شركتنا من خالل إجمالي أقساط التأمني حيث بلغت في نهاية عام 2008 ـ 457,435,034. ليرة سورية بينما بلغت في

العام السابق ـ 206,481,056. ليرة سورية.

العربية سورية تكرم موظفي املبيعات

أقامت الشركة بتاريخ 2009/4/2 حفال ً خاصا ً مبوظفي املبيعات لديها، مت خالله تكرمي املوظفني اخلمس األوائل ممن حققوا نتائج جيدة خالل العام 2008 ومت توزيع الهدايا

عليهم بهذه املناسبة،و هم: 1- بشار احلرستاني، 2-أمل فرح،

3- رلى إبراهيم 4- علي نحاس، 5- سالم جبرا

املؤسسة العامة السوريةالشركة السورية العربية للتأمني

الشركة املتحدة للتأمنيالشركة السورية الدولية للتأمني - آروب

شركة التأمني العربية - سوريةالشركة الوطنية للتأمني

الشركة السورية الكويتية للتأمنيشركة الثقة السورية للتأمنيشركة املشرق العربي للتأمنيشركة أدونيس للتأمني - أدير

شركة االحتاد التعاوني للتأمنيشركة العقيلة للتأمني

الشركة اإلسالمية

AIC Syria

Note: Above figures are for presentation purposes only, and represent the US$ counter-value of the original LBP amounts in the Audited F/S

Issue 16 July, 20096

ASSETS

Cash at banksHeld-for-trading securitiesInvestments at FVTPLAvailable-for-sale investmentsHeld-to-maturity investmentsInsurance and other receivablesReinsurance assetsPrepaid expenses and other assetsFurniture and equipmentTotal Assets

LIABILITIESInsurance and other payablesAccrued expenses and other credit balancesTaxes payableProvision for outstanding claimsUnearned premiumsDue to general insurance departmentsProvision for employees’ end-of-service indemnityLife insurance contract liabilitiesTotal liabilities

NET ASSETS Reserve for asset revaluation surplusCumulative change in fair value of available-for-sale securitiesRetained earnings(Loss)/profit for the yearNet assets attributable to the equity holders of the life divisionMinority interest Net assetsTotal Liabilities and net assets

2008USD

14,546,167 -

1,886,793 7,865,195 2,361,546 4,071,084

731,284 182,949 192,653

31,837,670

1,347,267 2,059,680

85,451 663,417

2,180,873 9,129,794

141,612 13,454,189

29,062,283

189,534 (474,112)

3,950,861 (1,072,841)

2,593,442 181,945

2,775,387 31,837,670

2007USD

15,889,503 337,779

- 14,142,915

- 2,395,548 1,598,121

99,039 135,918

34,598,824

1,279,711 1,317,798

69,196 1,203,246 2,174,534

13,970,671 101,438

11,435,258 31,551,853

189,534 (1,094,519) 2,586,503 1,112,277

2,793,795 253,176

3,046,971 34,598,824

December 31,

Life Division Statementof Assets and Liabilities

Note: Above figures are for presentation purposes only, and represent the US$ counter-value of the original LBP amounts in the Audited F/S

Issue 16 July, 20099

been its partnership with the Dubai Export Devel-opment Corporation (DEDC) to provide reinsur-ance and support to its new credit insurance services. Meanwhile, Atradius, the world’s second larg-est credit insurer, has strong representation in the GCC through a joint venture with Al Mulla Busi-ness Group. Al Mulla Atradius Insurance Consultan-cy & Brokerage has recently been strengthened with the appointment of Peter Boberg as country manager. Attradius’s partnerships in the wider region include a stake in the Lebanese Credit Insurer (LCI), which has been making steady progress under Karim Nasrallah. LCI has forged part-nerships with regional players such as United Cooperative Assurance (UCA) in Bahrain as well as Hermes in Cyprus.

More than just insurance While these big players have all hit the ground running, the Middle East remains largely unfamiliar with the credit insurance concept, necessitating the need to emphasise that credit insurers bring far more to the table than just bad debt insurance. As specialized risk managers, credit insurers advise their customers on changes in the risk pro-file of their buyers, avoid losses where possible by manag-ing these risks and pay out claims to their policyholders should a bankruptcy occur.

It is the credit assessment capabilities of these global giants that bring a whole new dimension to their clients’ abilities to make informed decisions about their trading partners. Both Attradius and Coface boast of networks that process data from more than 50 million businesses world-wide. Eu-ler Hermes prides itself on an unmatched global network of risk offices that serve as “eyes and ears” on the ground.These services are also complemented with the means to collect debts on behalf of clients, with Co-face alone recovering around US$400m in glob-al bad debt annually, according to Venediger.Riskier timesThe unique service proposition of the credit insurers is starting to attract an increasingly steadystream of new cli-ents in the Middle East, particularly in a harsher economic climate. However, this very climate calls for a difficult bal-ancing act as insurers respond to the golden opportunity to take on more business, while at the same time controlling their own exposures in the wake of an inevitable increase in defaulted payments. The prospects for the credit insurance sector are certainly bright and the main players are facing the future with con-fidence.

The key challenge for credit insurance moving forward will be securing good quality company information. More disclosure is needed and the hope is that government mea-sures will come through to make the submission of audited accounts mandatory.

In increasingly tough trading conditions, businesses worldwide are increasingly turning to Credit Insur-ance as an essential risk management tool. The Mid-dle East represents an important growth market for the world’s leading credit insurance who have been steadily strengthening their presence in the region.

Bank Lending surveys show that the corporate sector is facing increasingly tight credit conditions, a situa-tion exacerbated following the recent financial institu-tion failures including the highly visible collapse of Lehman Brothers. The inability of business to raise ad-ditional funds, the increased burden of servicing exist-ing debts and the hardening of credit risk perceptions not only add pressure on lending rates, but also increase the risk of insolvency, which is already showing a sharp increase and looks set to continue throughout 2009.Members of the International Credit Insurance & Surety Association (ICISA), the global associa-tion of trade credit insurers and sureties, have seen a sharp increase in demand for their policies and ser-vices in reaction to the effects from the credit crisis.Even the fast-growing economies of the GCC have not proven immune from the global slow-down and people are showing an increasing interest in credit in-surance. The world’s largest credit insurers and bro-kers have been investing the required resources and capital into the region and the foundations are be-ing set for an educated and competitive trade market.

Forging partnerships The three leading players have strengthened their roots in the Middle East through a num-ber of cooperation and reinsurance agreements.Euler Hermes, a subsidiary of AGF and a member of Al-lianz, established its regional hub in the UAE over a year ago with a stronger emphasis than its rivals on having local underwriters on the largest operation of any creditinsurer in the GCC, with sister companies such as Allianz Takaful (Bahrain) and Allianz Sau-di Francais (Saudi Arabia). Last year also saw Eu-ler Hermes forge links with a number of Arabinsurers including a cooperation agreement with Qatar In-surance Company and its subsidiaries in Oman and Kuwait to provide credit insurance services in these three countries.

Coface, the Paris-based insurer, has also boost-ed its regional profile and counts the Jordan Loan Guarantee Corp and the Export Credit GuaranteeAgency (Oman) among its Credit Alliance network. In the UAE, coface Emirates Services is an ancillary services entity that acts on behalf of Coface, which also has reinsurance agreements with local players such as Oman Insurance Company and National General Insur-ance Company. A significant recent coup for Coface has

Credit InsuranceSpecial Report

Issue 16 July, 2009

من غرائب بوال�ص الت�أمني

- اأّمن ال�شاب جينارو بيلي�شيا الذي يعمل

كمتذوق للقهوة لدى �شل�شلة مقاهي كو�شتا ل�شانه

بع�شرة ماليني جينيه ا�شرتليني.

- املمثلة اأمريكا فرييرا، بطلة م�شل�شل »اغلي بيتي«

)بيتي القبيحة( اأّمنت ابت�شامتها بع�شرة ماليني دوالر.

- اطلقت �شركات تاأمني عاملية بوال�ض لتاأمني �شعر ال�شدر من الت�شاقط، بحجة ان ذلك قد يعر�ض

مهنة�شاحبها للخطر.

- يف 2008 اّمن �شانع نبيذ هولندي انفه ببولي�شة قيمتها خم�شة ماليني يورو.

- ح�شلت �شركة النتاج االأفالم االمريكية على بولي�شة بقيمة مليون دوالر �شد احتمال ان تقع املمثالت

العامالت لديها باحلب خالل فرتة البولي�شة،بعد ما كانت �شركة »تونتياث �شن�شوري« قد

اأّمنت احد ابطالها �شد املوت �شحكاً.

ARABIA Insurance Cooperative Company – KSA (AICC)

We are glad to inform that the insurance portfolio transfer from ARABIA Insurance Interna-tional (A.I.I.) and Jordan Insurance Company (JIC) to our Saudi sister company (ARABIA In-surance Cooperative Company – AICC) is underway, and the final valuation of the two entities will soon be finalized. As of January 1st, 2009, AICC has started issuing its own policies, and the previous two companies have ceased to do that, and transferred their insurance portfolios to AICC.

AICC Headquarters reside in Riyadh, and oversee, for the time being, a group of 10 branches around the Kingdome, spread as follows:Riyadh (2 branches), Jeddah (2 branches), Makkah, Taef, Khamis Mushait, Dammam, Khobar, and Houfouf.

8

Issue 16 July, 2009

Insurance Aspects & Commentary:

1. Once upon a time, there were eleven men.ELEVEN - a number suggesting the law of large numbers, important to insurers in measuring risk and in predicting outcomes.

2. Each of them owned one camel.EACH OWNED ONE CAMEL - every person in the group had a proprietorial insurable inter-est (through his ownership) of the same quantity of the same commodity. The exposure units (the camels) were homogeneous both quantitatively and by nature.

3. Suddenly - one of the camels died. SUDDENLY - suggests the fortuitous nature of the loss. Losses must be unforeseen.ONE - the extent of the loss, one exposure unit.DIED - the nature of the loss. “Suddenly” sug-gests the unexpected and accidental nature of the loss. 4. The owner could not afford £90 for a new cam-el, so he had to leave the country and go to work in the town instead.COULD NOT AFFORD £90 - the person suffer-ing the loss had insufficient assets to absorb it. He had not practised any form of self-insurance.SO HE HAD TO LEAVE THE COUNTRY AND GO TO WORK IN THE TOWN INSTEAD - suggests the consequential loss i.e, an additional loss related to the death of the cam-el.

5. The remaining ten men went to see a wise man. WENT TO SEE A WISE MAN - the group could not solve the problem themselves, so they sought advice from an expert, a consul-tant.

6. “It could happen to any of us”, they said. “What can we do?” IT COULD HAPPEN TO ANY OF US - the group recognized that each member was exposed to similar risk of loss.

7. “Could you afford £10 for a new camel if your camel died?”, asked the wise man.COULD YOU AFFORD £10 FOR A NEW CAMEL IF YOUR CAMEL DIED - the wise man quotes the price (premium) for the coverage (a new camel in replacement) and the period of insurance (one year).

8. They all agreed that they could manage that. The agreement of the group suggests acceptance of the terms offered.

9. “Very well”, said the wise man, “If you each give me £10, I’ll buy you a camel if yours dies this year.’ EACH GIVE ME £10, and I’LL BUY YOU A CAMEL IF YOURS DIES THIS YEAR - once again, the premium and the insurer’s prom-ise. The rate of premium is à 10 as a percent-age of £90 (the sum insured) and thus amounts to 11.11%. The insurer’s total exposure is £900 (£90 X 10).

10. They all agreed. ALL AGREED - suggests once again ‘consen-sus ad idem”, all parties understanding the agree-ment and accepting the contract.

11. And that year, one camel did die. THAT YEAR, ONE CAMEL DID DIE - during the period of insurance, a loss covered by the agreement (policy) occurred, the loss being lim-ited to one exposure unit, i.e. one camel.

12. The price of camels had gone up to £95 by now, but the wise man replaced the camel. PRICE HAD GONE UP TO £95 - the market value of the property insured had increased beyond the numerical sum insured. Inflation had made itself felt in the camel business - rate of inflation 5.55%. However, the insurer had prom-ised to buy a camel, not just to pay the camel’s value. REPLACED - replacement is one of the in-demnity options open to any insurer. In settling a claim he may replace, reinstate, repair or re-imburse. In this case the promise was already a replacement contract.

13. So nobody suffered. NOBODY SUFFERED - this is not quite true because, in fact, everybody suffered to a certain extent. The group of ten men each suffered a cer-tain loss of £10, being the premium paid, but in return were guaranteed the avoidance of the un-certain loss of their camels. The insurer suffered a loss of £95 being the claim he paid.

Marwan Berjaoui

11

Issue 16 July, 2009

Credit Insurance

What is it? Trade credit insurance insures suppliers against the risk of non-payment of good or services by their buyers. This may be a buyer situated in the same country as the supplier (domestic risk) or a buyer situated in another country (export risk).

The insurance covers non-payment as a result of insolvency of the buyer or non-payment after an agreed number of months after due-date (some-times referred to as protracted default). It may also insure the risk of non-payment following an event outside the control of the buyer or the seller (po-litical risk cover), for example the risk that money cannot be transferred from one country to another.

What kinds of risks are insured? Credit insurance insures against the risk that a buyer does not pay. It can also cover the risk that a buyer pays very late. A buyer will not pay after he has been declared bankrupt, insolvent or a similar legal status. Similarly buyers some-times opt for a bankruptcy protection arrange-ment, which allows them to delay payments for an extended period. Both instances are covered under a credit insurance policy. Credit insur-ance policies can include a wider range of cov-er, depending on the circumstances. Some poli-cies consider a delay in payment also to be an insolvency (so-called protracted default cover). If a buyer does not pay, the credit insurance pol-icy will pay out a percentage of the outstanding debt. This percentage usually ranges from 75 to 95 per cent of the invoice amount, but may be higher or lower depending on the type of cover.

What kind of risk does a credit insurance policy not cover? The credit risk that is insured has to have a di-rect link with an underlying trade transaction, i.e. the delivery of good or services. If no such direct link exists, the outstanding amount is not insurable under a credit insurance policy. To be insured, transactions may not be subject to disputes. Parties are usually requested to re-solve any dispute, prior to involving the insurer.

Source:Policy Magazine

First of all, please read this little story very carefully.

The Camel that died

Once upon a time, there were eleven men. Each of them owned one camel. Suddenly, one of the camels died. The owner could not afford £90 for a new camel, so he had to leave the coun-try, and go to work in the town instead. The re-maining ten men went to see a wise man.“It could happen to any of us”, they said. “What can we do?”.“Could you afford £ 10 for a new camel if your camel died?” asked the wise man.They all agreed that they could manage that. “Very well”, said the wise man, “If you each give me £ 10, I’ll buy you a camel if yours died this year”. They all agreed.And that year, one camel did die. The price of camels had gone up to £ 95 by now, but the wise-man replaced the camel. So nobody suffered.And the wise man had £ 5 left for his trouble and the risk he’d taken.

That’s how insurance protects people. If a large enough group of people join together, it becomes possible to estimate how many people belonging to that group are likely to suffer a particular loss. If all of the people in the group make payments into a fund, then the small number who suffer can be compensated.

How Insurance Protects People?

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Issue 16 July, 2009

ARABIA INSURANCE Company s.a.l. Head Office, Phoenicia Str.- ARABIA House BldgTel: (01) 363610/1 - (03) 314350/1 Fax: (01) 365139 - 363659 P.O.Box: 11-2172 Beirut, Lebanon

Website: www.arabiainsurance.com

Christine Porath(cporath@marshall.usc.edu) is an as-sistant professor at USC’s Marshall School of business.Christine Pearson (christine.pearson@thunderbird.edu) is a professor at the Thunderbird School of Global Management.Their book, The Cost of Bad Behavior. How Incivility Is DamagingYour Business and What to Do About It,is forthcoming from portfolio. Reprint FO90J

Imagine life as a game in which you are juggling some five balls in the air. You name them - Work, Family, Health, Friends and Spirit and you’re keeping all of these in the Air.

You will soon understand that Work is a rubber ball. If you drop it, it will bounce back. But the other four Balls - Family, Health, Friends and Spirit are made of glass.

If you drop one of these; they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for it.

48% decreased their work effort,47% decreased their time at work,38% decreased their work quality,66% said their performance declined,80% lost work time worrying about the incident,63% lost time avoiding the offender, and78% said their commitment to the organiza-tion declined.As companies slash workforces and depend on the staff left behind to do more,they can’t afford to let a few noxious employees cor-rode everyone else's performance.Unicivil behaviour should be penalized and repeat offenders cut loose.

that among those on the receiving end,We’ve been studying incivility for a dec-ade, and we’ve found that common (and generally tolerated) antisocial behaviour at work is far more toxic than managers im-agine.Berating bosses; employees who take credits for others’ work, assign, blame, or spread rumors; and coworkers who exclude teammates from networks- all of these can cut a swath of destruction that’s often vis-ible only to the immediate victims. Targets of bad behaviour become angry, frustrated, and even vengeful. Job satisfaction falls, and performance plummets. Some employ-ees leave.But those who stay may take a bigger toll on the organization. As a sen-ior vice president of a fortune 50 firm told us,’’They can and do sit in the boat without pulling the oars and that may be worse than leaving.”To understand the impact of inci-vility on performance, we polled severalthousand managers and employees from a diverse range of U.S. companies about theirresponses to rudeness at work and learned

By Christine Porath and Christine Pearson

How Toxic Colleagues Corrode Performance

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