Europa Re Value Proposition
A brief outline
Riccardo Ciccozzi
Head of Business Development
Doha, December 2, 2012
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Agenda
Context
– SEE Exposure to Natural Disasters
– Natural Disasters’ impact in SEE
– Catastrophe Insurance Markets
Project
– Vision and Market Value preposition
– Key services
– Main Steps
Challenges ahead
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Major Natural Disasters in South East Europe
Source:
Mitigating the Adverse Financial Effects of Natural Hazards on the Economies of South Eastern Europe
A Study of Disaster Risk Financing Options
South Eastern Europe Disaster Risk Mitigation and Adaptation Programme - Eugene N. Gurenko Wael Zakout
The World Bank, Sustainable Development Department Europe and Central Asia Region and UN/ISDR secretariat Europe February 2008
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Strong Wind
Nat Cat Risk
Regional
Exposure
Flood
Heat Waves
Drought
Quake
 South East Europe (SEE) is highly vulnerable to natural disasters
 Climate Change is expected to worsen the region’s exposure


Nat Cat
Damage
Impact


Private
Insurance?


Adverse impacts on
governments’ budgets
Socio-economic
implications on
households
Adverse economic
effects on business
Very Low Cat
Insurance Penetration
Lack of Risk
Awareness
Market Growth
Potential
Europa Re
Solution
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Europa Re - Business Model – Vision & Mission
A Swiss-based company
owned by countries of
Southeast Europe (SEE)
Supported by the World
Bank, EU, UNISDR, SECO
and GEF
Providing innovative
technology-driven
solutions to SEE insurers
writing catastrophe and
weather risk insurance
products
Vision - Increase the level of catastrophe insurance penetration amongst households, small and medium
enterprises (SMEs) and farmers in the SEE region
Europa Re
Project
Mission
•
•
•
•
Educating consumers
Improving and standardize credit quality of insurance products
Enabling insurers to sell weather and catastrophe risk insurance
Helping governments and insurance regulators
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Key Services - Risk Management
Market Issue: lack of high-resolution and reliable catastrophe (cat) models for
SEE cat exposures
ERe Solution: provide local insurers with state-of-the-art probabilistic cat
modelling tools based on the latest technology offered by Market Leaders
Main Benefits: High-resolution Models available at a much lower cost
ERe’s Cat Models’ technology is underpinned by:
–
–
–
AIR’s global research in catastrophe risk modelling
Country specific risk data
Unique business applications
ERe’s Risk management systems allow insurers to accurately evaluate:
–
–
Potential losses resulting from catastrophe insured risks at any point in time;
Net retention capacity relative to available solvency.
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Key Services - What will Europa Re do for Consumers
Expertise on
improving the
subsidy scheme
Awareness
Education
Europa Re
New user friendly
and affordable
products
Improved market
mechanism
Development of
distribution
channels
New Parametric
Insurance
Products
Know how
Insurance
companies
As result:
• Insurance premium subsidies
Consumers
Government
• Direct subsidies
- Consumers’
profit and
assets are
better
protected
- Higher incentive
to produce
Outcome
- Increased
production
- Increased
income
• Basic Insurance protection
• Specialized Insurance
protection
- Higher
contribution to
economy
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Key Services - What can be expected from ERe products
Simple
Earthquake and
Flood insurance
Innovative
for homeowners
and SME’s
Weather
insurance
products for
agriculture
Other as
Affordable explored to fit
market needs
Products
Covering
fastconsumers’
and simplified loss settlements
Easily
production
needs
accessible
Remote Sensing & Cat Modelling Technologies
Reliable
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Europa Re Parametric products
1. Precipitation
excessive
drought
precipitation
(minimal rainfall)
2. Temperature
high heat
low heat
freeze
Main principle of parametric weather insurance:
Coverage in case of unusual behavior of weather
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Example: Drought insurance
What triggers an
insurance event?
when total
amount of
precipitation for
the period is below
the minimum
threshold
What types of
thresholds?
1. minimum
threshold for
period
2. maximum
threshold for
period
(based on long
term average for
period)
What precipitation
values are accepted?
daily values of
precipitation
measured officially
by Authorized
National Weather
Service
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A new perspective for claims
Event timeline
Pre-event
Event
Post-Event
Phase1
Geocoding at the
time of
underwriting
48-72 hrs
•Imagery data collection
•Remote Damage Assessment
•Phase1 Claims settled
Pre-event
Imagery
Phase 2
1-2 weeks
•Effectively target adjustors
and claims resources
•In-field damage assessment
•Phase 2 Claims settled
Exposure
data
Event Monitoring
& immediate
notification
Protocols
Before/After image
comparison
Phase 3
within weeks
•Claims submission
•Assignment
•Evaluation in-house or
send adjustors to review
•Phase 3 Claims settled
Claims
Adjusting and
Management
Financial
Management
Work Management
Documents I Correspondence I
I Contacts I
Litigation
Subrogation
Salvage
Main Sequencing Steps – starts Nov 2012
Platform Testing
•
Nov 2012 to May 2013
Compatibility and proper functioning of the systems
•
Dec 2012 to June 2013
Europa Re Accreditation Sales Certificates
•
May 2013 on-going
Europa Re Accreditation Claims Reporting
Certificates
•
June 2013 on-going
Europa Re New Products Launch
•
June 2013 to Dec 2014
Education and Promotion
•
Starts June 2013
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Challenges ahead
Government Involvement:
–
New Legislation and
regulations shall be issued
in SEE to foster private cat
insurance
To educate, regulate and incentivize
Promotional activities shall
target directly consumers in
the region
Consumers’ resistance:
–
Lack of risk awareness / low trust in private insurance
Insurance Industry Resistance:
–
What’s in it for me?
Local Insurers to enter into
formal cooperation by June
2013
Launch of first New
Products in October 2013
But,
Engage & Innovate
Lessons from the Macedonian farmers
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Thank you for your attention!
Contact details:
info@europa-re.com
www.europa-re.com
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