Intermediaries’ Roles on
Managing Risks
V. International Istanbul Insurance Conference
October 2013
Our Fact Sheet – How We Empower Results For Clients
 Aon Benfield’s industry leading expertise
and data enables us to deliver unique value
to our clients
 Capital Advisor
– Utilizing a full range of expertise,
proprietary tools and benchmarking
capabilities, we provide the most
appropriate strategy and form of capital
to meet your needs.
 Client Advocate
– We act as our clients’ trusted advocate in
the global reinsurance marketplace and
have a track record of structuring the
most effective solutions across even the
most complex of global risks.
 Custom-Tailored Solutions
– Our award-winning tools and solutions
give our clients the freedom to embrace
new opportunities and confidence from
having access to cutting-edge offerings.
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What is Risk?
Risk = Probable Frequency + Probable Magnitude ( of a future loss )
 Insurable Risks
Fire
Earthquake
Flood
...
 Uninsurable Risks
Economical Slow-down
Regulatory Changes
Competition
...
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What to do with the uninsurable Risk? Maybe some help still available?
 Help on market security before a risk attaches or even during the term of the policy if one
or more of the risk carriers become insolvent or have weakening of their financial
strength
 Help on sanctions areas
to give clearer picture to clients
who may have some business
or plans to have business over
there
 Advise on areas of political
unrest or even terrorism to
develop travel policies and
emergency preparedness
plans
 Advise on cyber risks and minimise the effect on the balance sheet
 Advise on contractual management, to minimise policy expenditure
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How can Intermediaries improve Risk?
 Risks can be simple..
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How can Intermediaries improve Risk?
 Or complex..
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Whatever the complexity, when it comes to risk management
A company needs to protect its;
 Brand
 Cash Flow
 People
 Assets
 Balance Sheet
 Processes
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Methods & Systems / Risk Engineering & Asset Protection
Deliver specific support to monitor and improve processes to assist in reducing loss costs.
This can be done in-house, by the broker.
 Property Risk Consulting
Risk control and asset protection to go beyond hazard and risk identification, and include
keen awareness of innovative risk mitigation strategies, property and business
interruption valuations, fire protection engineering and access to a best in class
proprietary data management solution. When disaster strikes, such as earthquakes,
explosions, hurricanes, fires or floods, the intermediary can help clients mitigate the loss
and get back to business.
 Fire Protection Engineering
To provide clients across all industries with innovative and cost effective solutions that
protect life and effectively reduce the risk of fire and security threats.
 Casualty Risk Consulting
Define and target key metrics for clients to understand the true cost of loss and
accurately track progress toward improvement. Solutions include safety culture
improvement, ergonomic consulting, fleet safety, regulatory compliance, safety training
and product risk management.
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Methods & Systems / Risk Engineering & Asset Protection
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Methods & Systems / Business Impact Analysis
To define Risk Profiles and to estimate the capability to recover after a crisis.
Targets
 Identification and evaluation of significant business interruption risks related to:
– Key machines and functions.
– Facilities, buildings.
– Suppliers and vendors.
– Internal dependencies.
 Building up basis for developing risk management and continuity management. Enhance
business interruption risk awareness and understanding.
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Methods & Systems / Business Impact Analysis
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Businees Interruption & Supply Chain disruptions
Causes
2
1
Impacts
3
Loss of productivity
Increased cost of working
Loss of revenue
Adverse weather
Unplanned outtage of IT
Customer complaints
Transport network
disruption
Service outcome impaired
Stakeholder/shareholder concern
4
6
5
7
Delayed cash flows
Product release delay
Damage to brand/reputation
Increase in regulatory scrutiny
Product recall/withdrawal
Earthquake/tsunami
Failure in service
provision by supplier
Product quality
incident
Fine by regulator
Share price fall
8
9
Cyber attack
10
Civil
unrest/conflict
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Payment of service credits
11
Source: BCI survey 2011
Industrial
disputes
11
2
Methods & Systems / Scorecards
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Methods & Systems / Scorecards
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Methods & Systems / Data Management & E-Solutions
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Methods & Systems / Data Management & E-Solutions
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Aon Risk Engineering
Protect your Brand
Protect your Cash Flow
Protect your People
Aon focuses on risk-reduction, improving reputations
and preserving brand name.
Aon saves clients money on insurance premiums by
accurately representing their operations.
Aon helps companies reduce hazards and improve
performance
•
Consequence assessment, including
modeling of fire, explosion and toxic
release events
•
Reinsurance market underwriting
consulting
•
Insurance risk engineering consulting
•
Frequency assessment using Fault
Tree Analysis
•
Estimated maximum loss
(EML)
•
Quantitative safety risk assessment to
evaluate the impact on human health,
the environment, property damage and
business interruption
•
Risk rating
•
Business interruption studies
•
•
•
•
Construction project reviews
Comparative risk analysis to determine
cost- effective solutions to risk
reduction
Protect your Assets
Aon provides engineering solutions to reduce risk,
achieve compliance, and protect assets.
.
Hazard identification and evaluation
•
Process Hazards Analysis
(PHA)
•
Layer of Protection Analysis
(LOPA)
Human Factors
•
Critical task analysis
•
Control room / alarm
evaluations
•
Facility siting to examine the risk to
building occupants
•
Audits to verify compliance and provide
solutions
•
Provide solutions to underwriting
recommendations
•
Fire hazard assessment
Protect your Process
•
Code compliance
•
Suppression and detection system
specification, design and performance
testing
Aon provides engineering solutions in early stages of
design, resulting in reduced capital expenditures and
increased levels of protection.
•
Safety review of design features
•
Fire water infrastructure specifications,
design and performance testing
•
Fire protection review
•
Spacing and layout review
•
Fire water pump specification, design and
performance testing
•
High-level HAZID
•
Staffing for in-house project teams
Protect your Balance sheet
Aon’s valuations help clients obtain appropriate insurance
levels
•
Current property valuations
•
Desktop studies
•
Basic replacement cost reports
•
Detailed replacement cost reports
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Methods & Systems / A prerequisite: Questionnaire
 Avoids patchwork information flow
 Improves overall quality of the risk review by the insurance
company/underwriter
 Reduces the E & O risk
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The cost effect
 Insurability
The insurability of an asset highly depends on its risk conditions thus risk management is very
important for insurability.
As an example, the turbine technology is one of the most important criteria when insurers are
accepting power risks.
In Turkey, a number of premises belonging to ‘dangereous’ area of operation like furniture, paint and
the like left uninsured recently. Some of them were able to get insurance cover afterwards with a plan
for risk management practices.
 Capex reduction
On the other hand the, the common practice is that an insured gets a cost reduction in paid premium
in relation to the investment made on risk improvement.
The risk improvement can directly affect the PML scenarios thus the limit ( or the capacity ) required
to be protected.
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QUESTIONS
Ferhan Özay | Executive Director
Aon Benfield
Akkom Ofis Park No:2 Ümraniye 34768 İstanbul
T: +90.216 444 12 66 ext.540
ferhan.ozay@aonbenfield.com | www.aonbenfield.com
Aon is the Principal Sponsor of Manchester United