LIVE TEXT: IIF 2017 Property Insurance - "The Nat Cat challenge" in brief

Hosted by NTT Data, Monday took place in Munich, Germany, the third edition of the International Insurance Forum series dedicated to the property insurance issues: "The Nat Cat challenge". Participants from 13 countries have attended the event produced by XPRIMM..

IIF 2017 lined up an exquisite team of speakers:
  • Dominik LORENZ, Vice President Financial Services - Insurance, NTT DATA Germany
  • Michael THEILMEIER, Vice-President, GEN Re, Germany
  • Peter HOEPPE, Head of Geo Risks Research/Corporate Climate Centre GEO/CCC1, MUNICH Re, Germany
  • Mark HOBAN, Chairman, FLOOD Re, UK
  • Dr. Eduard HELD, Head of Products, PERILS AG, Switzerland
  • Andreas MUELLER, Catastrophe Modeling Manager, GEN Re
  • Dr. Bernhard REINHARDT, CCM | Senior Risk Consultant, VERISK Analytics GmbH  |  AIR Worldwide Division, Germany
  • Thierry PELGRIN, Head of Continental Europe, Switzerland
  • Valentina GHIANI, Property Treaty Underwriter, SWISS Re
  • Calin RANGU, Director, ASF Romania
  • Mehmet Akif EROĞLU, Secretary General, Turkish Insurance Association
  • Sakis PRASSAS, Sales Director, BLUEPRINT
  • Zbigniew BACHMAN, Country Manager Poland, Insurance Engineering Services
IIF 2017 also hosted another XPRIMM editorial premiere, launching the 2017 issue of the XPRIMM Property Insurance Report. Besides the statistical data concerning the property insurance business in the CEE, SEE and CIS markets, the report also provides for an extended review of the latest trends recorded by the European NatCat insurance schemes, also looking to the current status of two very different property insurance markets: Germany and Italy. Interviews and other analysis articles are completing the 60 pages report.

Michael THEILMEIER, Vice-President, GEN Re, Germany
  • Man-made catastrophes were in the focus in recent years, including terrorism 
  • 1 June 2017: Germany decided not to have a mandatory cat insurance 
  • A clear message for the public has been sent on this occasion: uninsured dwellings will not be offered compensation from the state in case of a disaster unless the owner can prove that he sought coverage and was unable to obtain it from the insurance carriers
Peter HOEPPE, Head of Geo Risks Research/Corporate Climate Centre GEO/CCC1, MUNICH Re, Germany
  • We see increase in number of loss events since 1980 with 2011 as a peak year for natural catastrophes
  • Flood losses worldwide got down since the 1990 due to massive investments in flood prevention measures
  • In example, in Hamburg, although the 1962 water level has been significantly exceeded nine times, the city has not suffered any major loss since then. The explanation: investments of 2.2. billion EUR have avoided losses of over 20 billion.
  • MUNICH Re is currently conducting a study looking at the impact of climatic changes on thunderstorms following a similar one on the US
  • The German reinsurer has a NatCatSERVICE Analysis online tool which was launched two months ago. The user can select peril types, geographical area and also use socio-economic country information as a filter in order to generate reports.
Mark HOBAN, Chairman, FLOOD Re, UK
  • FLOOD Re has had a very good first year. The company is now operationally and financially resilient - in the form of a flood reinsurance scheme. It exists to promote the availability and affordability of flood insurance in the UK as it has been set up to help those households who live in a flood risk area find affordable home insurance.
  • 90% of insurance carriers in the UK now offer FLOOD Re-backed insurance policies, in comparison with only 60% last year
  • FLOOD Re has managed to increase competition between insurance carriers and help with the affordability of flood insurance for homeowners.
Dr. Eduard HELD, Head of Products, PERILS AG, Switzerland
  • The mission of PERILS is to improve cat risk assessment but also to facilitate industry-loss-based risk transfer. The company started in Europe
  • We need to lower prices that consumers pay for NatCat cover by means of using databases for the industry.
Dominik LORENZ, Vice President Financial Services - Insurance, NTT DATA Germany
  • Insurance companies estimate that 40% of customers are annoyed by a lack of online services, according to a NTT Data study.
  • 33% of insurance companies assume "e-mail" as the most common digital communication path. E-mail is therefore the most popular communication channel for simple requests.
  • According to insurers participating in the same study, only 30% of customers are interested in giving data to insurance companies for "pay-as-you-drive" rates.
  • Insurers have to change their culture due to digitalisation.
Dr. Bernhard REINHARDT, CCM | Senior Risk Consultant, VERISK Analytics GmbH  |  AIR Worldwide Division, Germany
  • Change today is exponential in all industries
Thierry PELGRIN, Head of Continental Europe, Switzerland
  • The property insurance gap is decreasing very slow worldwide. At the same time, insurance coverage in the CEE is very low in terms of household insurance.
  • Reinsurance premiums in CEE are between 200-400 million EUR, so considering previous claims, one single event could "kill" the entire premium collected from the region
  • Most actors in the CEE tend to consider that one viable solution would be the establishment of some sort of mandatory insurance scheme for the nat cat risks coverage
  • There is a big potential for insurance in the CEE. PAID Romania is by far the largest capacity bought locally and one of the biggest cap capacities in Europe (Top 20 in Europe).
Valentina GHIANI, Property Treaty Underwriter, SWISS Re
  • In Italy, natural catastrophe insurance penetration is very low in international comparison
  • Bridging the NatCat protection gap represents an enormous business potential for the insurance industry. This can only be achieved by collaboration between all parties involved: public sector, reinsurers, local insurers and homeowners.
  • Creating consumer-friendly products, PPPs, promoting risk culture and awareness, working towards affordability and stimulating demand via tax incentives represents the main actions that have to be taken towards bridging the protection gap.
Mehmet Akif EROĞLU, Secretary General, Turkish Insurance Association
  • TCIP-Turkish Catastrophe Insurance Pool covers only earthquakes and the subsequent fires, explosions, landslides, tsunamis etc. It has a 90% brand recognition. Clients have to pay an annual premium below 33 USD.
  • Currently, the penetration rate is around 60%. 61% of all policies are sold thru agents. So far, the TCIP has had 22.000 claim files.
Calin RANGU, Director, ASF Romania
  • 20% of the Romanian population is covered by the mandatory household insurance which is offered by a privately-owned company named PAID which is organized according to the specific legislation. 1,7 million contracts are currently in force.
  • We are also looking at the possibilities of issuing cat bonds in Romania
  • Long-terms goals are to develop alternative distribution channels for PAID, to develop the contingency plan for the entire insurance market in respect of CAT risks on residential property, to adjust the insurance premium based on actuarial calculations/ imposing a deductible rate, to build a solid CAT fund, to develop a nationwide households database, assigning a unique identification code for each dwelling and to improve collaboration between PAID and the public institutions engaged in this project.
  • Selling mandatory household insurance policies thru brokers is one way to increase the penetration ratio - this is why ASF is supporting this measure.


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