nsight Page 2 Foreword by Stefan Feldmann Page 5 Hello from Hong Kong Page 6 Hello from Singapore Page 7 Valuations and Asset Value Declarations Page 11 Valuations impact on Business Interruption Page 15 Travel Safety at the Push of a Button Page 19 Motor Fleet Insurance & Claims Process Page 21 Flood challenge: HDI lifts lid on largest nat cat ever Page 23 HDI on strong local uptick for IP's Page 25 Insurance pros cycle and climb mountains in cancer fight A p r i l 2 0 2 3 | E d i t i o n 8 HDI Asia Pacific Newsletter Contents Ma y 2023 Ed . 8
HDInsight Live As inflation and rising interest rates continues to challenge our global economy, our HDInsight LIVE education forums exploring Valuations have attracted strong interest. In November last year our HDI expert team from Australia and Singapore along with guest speaker Tim Markey of John Ford discussed Valuations and Asset Value Declarations (Read more on page 7). Then in February, the HDI team, this time with guest speaker Ryan Carruth, Partner DLA Piper, dove back into the discussion to look at Valuations impact on Business Interruption. Some fascinating insights and indicators to watch which you can read on page 11. As we continue to enjoy open borders and reconnecting in-person, in this edition we share an article on Travel Emergency Response. HDI Global Accident & Health line continues to bring peace of mind for our corporate clients through its HDI Global Assist and the HDI Guardian App. Read more on page 15 how this tech is bringing real time assistance to employers here in Australia and overseas. Dear Business Partners, This year we celebrated the first quarter with the launch of HDI Global Motor Fleet insurance and introducing Khoder Chehade, our new HDI Motor Underwriting Manager. Our HDInsight LIVE series continues to support our broker partners with topical education. The global HDI financial results were announced last quarter and despite the challenges we all face, tell a good story of our global capability which we explore further in this edition. Stefan Feldmann, Head of HDI Global Asia-Pacific, Managing Director HDI Global SE, Australia Motor Fleet Launch It’s been some time since a new Motor product has entered the Australian market and we are delighted that our new Motor Fleet product is bringing our broker partners more choice, and growing value to our existing lines of business. The response to this new line has been extremely positive and we thank our broker partners for your continued support. We had a great time welcoming brokers to our series of roadshow events across Australia in the first quarter. Plus, one of our HDInsight LIVE online education forums provided further detail on the Motor Fleet Claims Process. You can read a summary and also find a link to the recording and slide on page 19. Foreword HDInsight Edition 8 - page 2
Financial Results 2022 The HDI Global, along with parent company Talanx financial results, were released in March on a worldwide scale, HDI Global grew its premium income by 17.9 percent in financial year 2022 to EUR 8.9 (7.6) billion – a clear double-digit rise. The currency-adjusted increase was 12.9 percent. Key growth areas were liability and property insurance. A drop in frequency losses pushed down the combined ratio to 95.7 (98.7) percent, in line with the strategy, despite an increase in total large losses and inflation effects. As a result, HDI Global has almost reached its mid-term target of 95 percent well ahead of schedule. This reflects the positive effects of the measures taken to increase profitability since 2019. High large loss claims due to natural disasters such as Hurricane “Ian”, Hurricane “Fiona” and the floods in Australia impacted business by EUR 270 million. In addition, reserves for losses in relation to Russia’s war of aggression against Ukraine totalled EUR 36 million. Operating profit for HDI Global climbed to EUR 252 (196) million in the financial year. The division contributed EUR 177 (143) million to the Talanx Group’s net income. With our strong broker relationships and commitment to serving our insurance community, we continue to attract outstanding underwriting, claims, risk engineering and market management talent to HDI and believe this will hold us in good stead for 2023 and beyond. A message from the Chair “You could say that we have grown despite the challenges. But I think it‘s much more likely that these challenges have facilitated our growth and our customers’ awareness of serious, long-term relationships. This is because we offer customers genuine added value for their business, standing by their side pre-emptively well before crises occur – and we remain a reliable partner when they do occur. We will consistently continue along this path in 2023." Dr Edgar Puls Chairman of the Board of Management HDI Global Asia Pacific Focus In my role as Head of HDI Global Asia Pacific, I continue to work closely with our with our local team in Singapore and Hong Kong. As many of you know already Daniel Lau is our Managing Director for Hong Kong and Graham Silton manages our Singapore branch. We continue to bring our independently successful operating branches in Hong Kong and Singapore closer together, to offer the very best of HDI Global to the insurance markets within the Asia Pacific region. I’m pleased to share a message from them both in the following pages. HDInsight Edition 8 - page 3
International Programmes capability As a team, we are a partner to industry and we support our customers with our expertise in more than 175 countries. Indeed, in the first quarter in an interview with Daniel Wood, Editor Insurance Business, I shared the story of our International Programmes (IP) capability along with our local IP expert Rinnah Roque. Globally HDI has over 5,000 International Programmes and written over 23,000 local policies. You can read the story on page 23. HDI Australia Team I always enjoy bringing together our incredible team in Australia for our annual Company Kick Off Meeting for all staff. Together, we celebrated the success of 2022 and talked about our focus and our vision for 2023 and beyond. This year we met at 107 South Eveleigh, a new creative and innovative community hub that will soon be home to an array of social enterprises. Following presentations, staff explored with the 107 team, their creative connection with our values and learnt some great tips from Reborn on how their physical wellbeing can positively effect their mental health. Plus, they enjoyed some interactive games and friendly competition. It certainly was a moving and entertaining experience for all of us! HDI Community In addition to connecting as a team, we also celebrated an amazing milestone of achieving our collective goal to raise $91,000 for Waitara Disability Services. This local community charity provides care support for families and funds will be used to renovate the backyard of the facility. This kind of capital expenditure is not covered by the NDIS and will provide a safe and inclusive space for local families. We look forward to sharing the journey further with you as works commence. Stefan Feldmann Head of HDI Global Asia-Pacific Managing Director HDI Global SE, Australia I was also pleased to participate again this year in the Tour de Cure, an annual cycling ride of more than one thousand kilometres from Coffs Harbour to Noosa. Thank you to everyone who generously donated to support this important cause. So far Tour de Cure has funded 100 major cancer breakthroughs and raised more than $100 million in funds for cancer research. Please read more about this on page 25. Image: Stefan Feldmann at the Tour De Cure cycling event Image: HDI team and Waitara Disability Services I hope you enjoy reading the articles and hopefully find them useful as well. Please reach out to myself and my colleagues with any questions or suggestions you might have. Kind Regards, HDInsight Edition 8 - page 4
Graham Silton Managing Director HDI Global Singapore A warm welcome from Singapore, following a very successful 2022, the great and positive momentum has continued strongly into 2023. We are very pleased to announce further geographical expansion in the region by way of the opening of a Representative office in Thailand and the appointment of a local Marketing Director, K Somchai. We will have an official opening launch on 8th June in Bangkok for our key business partners in Thailand. HDI Global Singapore will also be sponsors for the upcoming PARIMA conference in Mumbai on 16th June, the Singapore office has the geographical mandate for ASEAN, India and the Middle East region, a very large area with tremendous growth potential. Graham Silton, Managing Director HDI Global SE, Singapore Hello from Singapore HDInsight Edition 8 - page 5 It is very pleasing to see traffic flow into Changi Airport is pretty much back to pre Covid levels, as always we welcome the opportunity to meet clients, brokers and cedants in person, please do not hesitate to get in contact with myself or any of the team. Kind regards,
2022 has been a good year for Hong Kong – we have had tremendous success in our business growth and great bottom line through the year so far. It gives us great backbone as we move forward and voyage into the year of 2023. Since January 2023, the travel restriction of countries within the region were lifted, the first time since 2020. We have made several trips to our clients for the long waited in-person visit. While we have done online meetings together in the past three years’ time, as we all know, virtual meetings cannot beat face-to-face meetings and interactions – where in person meetings, you get to see each other’s facial reaction, body language, and most importantly, the touch from a firm handshake! We have taken the opportunity to visit our partners in China, Hong Kong, Korea and Taiwan and all parties are happy that we have taken our time to visit them and vow to pay HDI back for a visit! Our colleagues and business partners have also taken the opportunity to visit us in Hong Kong. Colleagues from Australia, clients from China, Korea and Taiwan have been coming to visit since February, and we have very much enjoyed their visit, and the time that they are spent with us together during their stay in the city. Since the set-up of our APAC regional team, we have a greater manpower and capability to serve our client for their all needs! It is always a great pleasure to see our business partners in person to discuss business opportunities, and how HDI can offer a one-stop-shop solution and to be there for our partner in the moment when it matters! Image: Hong Kong team As we always emphasize the importance of “Together we take care of the unexpected and foster entrepreneurship”! Together, we can achieve mutual success altogether, and I am eager to be part of your successful journey. Kind Regards, Daniel Lau Managing Director HDI Global Hong Kong Daniel Lau, Managing Director HDI Global SE, Hong Kong Hello from Hong Kong HDInsight Edition 8 - page 6
Following the pandemic, the world has seen unprecedented impacts on the global economy; rising interest rates; major disruptions of global supply chains; labour shortages; and extreme political tension across several key regions. This creates challenges for the insurance industry as the replacement value of assets escalates in an ever-changing environment. Kristy Taylor Senior Claims Adjusters HDI Global SE, Australia Tim Markey General Manager ANZ John Ford Jane Ravi Property Underwriting Mgr, Energy & Technical Risks Australasia HDI Global SE, Australia David Gibbs Underwriting Manager for Western Australia HDI Global SE, Australia Asset valuation is the process of determining the fair market or present value of assets. To calculate the cost for repair, replacement, and business interruption, underwriters must factor in valuations on a more regular basis than before. There seems no end in sight as experts predict a global recession and further challenging times for the foreseeable future. As part of the ‘HDInsight LIVE’ online education series, guest speaker Tim Markey, General Manager for ANZ at John Ford, and the HDI expert team, held a briefing about Valuations and Asset Value Declarations. This has become a ‘hot topic’ as the insurance industry see firsthand how the volatile global situation impacts asset values. Tim Markey, knows how important correct asset valuations are for the insurance industry. John Ford has a long history (founded in London in 1828) in the valuation of plant, equipment, and property. The independent advisory firm provides reinstatement cost assessments for insurance companies, re-insurers, brokers and the insured. During the briefing session, Mr Markey explored some of the factors influencing valuations and how brokers can help their clients navigate the uncertainty. INFLATION has brought uncertainty and is a key consideration for future valuations. In Australia, inflation has increased to 7.3%, a 30-year-high. In other parts of the world, the situation is similar or even worse: The US and UK are seeing inflation numbers at 8.3% and 10.1% respectively, both at a 40-year-high. Germany also recorded 10% inflation, an all-time unprecedented high. Only China's inflation is low, but there are steep price increases in fuel, where the price has skyrocketed by 24% as other commodities also rise. HDInsight Edition 8 - page 7 Valuations and Asset Value Declarations Real World example “We have one claim that's related to the 2020 hailstorms that we had here in Canberra. We had to obtain a very specific report around what the potential cost of that claim will look like for the next two years – because of all the current issues and the current economic impact. This report outlined costs, and the increase was considerable: Roofing repairs had gone up by 38%, window repairs by 133%, consultants by 36 to 103% and the price of steel by 30%.” Kristy Taylor Senior Claims Adjusters HDI Global SE, Australia This has a considerable impact on the insurance industry, as replacement values become more difficult to predict, which in turn makes managing risk more complex. According to Mr Markey, it has become unviable to relate to the consumer price index (CPI) which covers everyday needs like milk, eggs and fuel, but is not necessarily reflective of what's happening with steel, concrete, tanks or vessels, items that are more relevant for calculating the replacement cost of assets such as production facilities or machinery. Consequently, the insurance industry “really needs to be looking at different indices moving forward," Mr Markey says. Edmund Binsted Senior Energy Underwriter HDI Global SE, Singapore Please note, all figures correct at the time of presentation, however values may have changed. Please contact our HDI team to discuss your specific requirements.
Red Flags for Underwriters "As underwriters, the inaccurate declaration of assets has a significant impact on us. It creates difficulties in accurately estimating losses and modeling risks, particularly for natural catastrophes, which are critical factors in today's world. This downstream effect makes it challenging to obtain precise loss estimates." Jane Ravi Property Underwriting Manager, Energy & Technical Risks Australasia HDI Global SE, Australia LOGISTICS is another factor that has contributed to the unpredictable rise in costs driving up valuations. “Pre-COVID, a 40-foot container would have cost about $1,200 to $1,400,” Mr Markey explains. “Now, depending on the shipping route, the cost has shot up to more than $15,000.“ Whereas before, freight would have only made a partial impact on replacement values, now it has a major influence. This is just one example as shipping operations have been hampered by several factors that weigh on insurance claims. For example: the COVID-19 pandemic brought lockdowns, some of which are only now restrictions are easing in countries such as China. This follows port closures and causing labour shortages around the world. ENERGY is another input influencing influencing current valuations. “Going into the northern hemisphere winter, we're seeing gas prices dramatically go up,” Mr Markey said. “There's a gas shortage of about 30% in Europe at the moment.” This will cause factories to shut down, as they can't take on the cost of the energy or find any way to pass it on. Whether these factories will be able to return to production at some stage is another question." CURRENCY fluctuations have made replacements more expensive with the US-Dollar going strong against most currencies, pushing the replacement value up. This kind of uncertainty leads to volatile markets. “Over the years you could quite comfortably maybe roll a number from one year to the next or maybe add a few percent to it,” Mr Markey said. Whereas now, over the last two years, this has become impossible as it is hard to predict how prices are developing, and many manufacturers most definitely price this uncertainty in. Construction materials like glass, concrete and cement have seen a steady increase. This situation is mirrored in most of Asia-Pacific – in Australia and New Zealand as well as in Singapore where the cost of materials has gone up, but also the cost of migration labour. Hong Kong is currently one of the few exemptions, where the market is a bit steadier. Mainland China, however, has been crippled by lockdowns earlier this year creating a downturn. MERGER AND ACQUISITIONS are now important to review, particularly for a portfolio. Quite often the numbers will be rolled on from the previous owner, and it’s most probable nobody has really checked where the numbers have come from. Such numbers can often be a “mixed bag”, as Mr Markey pointed out. As an example, he named the construction industry. “I've felt that the industry was quite happy to roll a construction cost into a program,” he said. However, if a job/project/site had been tendered pre-COVID, these numbers cannot “survive” in today’s costs anymore. “This means that the rolling of cost is not possible in today’s market anymore”, Mr Markey stated. The replacement costs would have changed dramatically. HDInsight Edition 8 - page 8
A Different Ball Game in Singapore “We've seen instances where we've seen rollover on values, which is obviously a red flag for us as underwriters. So, we look to engage in further conversations with the broker and the client to understand the client's position, and to further understand the expectations of the client on how they see their insurance policy responding in the event of the loss. We've also seen some clients rely on CPI only. This, in combination with dated valuations or the absence of a professional independent valuation, means that there's no accurate foundation for indexing to be applied between valuation cycles.” Edmund Binsted Senior Energy Underwriter HDI Global SE, Singapore NET BOOK VALUES are also proving as problematic as Historic Costs. Net book values are an accounting approach to valuations, where the asset is depreciated to zero over time (depending on the actual item). “This doesn't tell the insurer anything about the replacement value of an insured asset,” Mr Markey warned. His overall message is: It can be dangerous for companies to push back on valuations that are done by an independent valuer, and instead only involve their inhouse team. These teams – despite being experienced and knowledgeable in general – often lack an understanding of replacement values in the current environment, and how those numbers are used in insurance policy. ASIA PACIFIC is experiencing the valuations differently to the global story. The HDI Singapore branch covers around 38 countries in South-East Asia, the Indian subcontinent, the Middle East and North Africa. These regions come with their different challenges. Edmund Binsted, Senior Energy Underwriter, HDI Global SE, Singapore named the Indian subcontinent as an example. “We're experiencing a few more challenges with regards to this region, simply because clients would typically have local insurers, or their own in-house valuers that conduct re-evaluation exercises,” he explained. Typically, these valuations aren't necessarily recognised by international reinsurers. This means that an overall conversation is essential and according to Mr Binsted: “Clients are more than happy to sit down and go through their methodology, which is something that's really important for us.” EXCEPTIONS can be found to the current trends though. Whereas most values have gone up – in metals, machinery cost, equipment or construction materials and services for example – there is one exemption though: Renewables go against the grain, as Mr Markey explains. After a phase with pressure on supply, where values have gone up, the John Fordexpert predicts these values to come down again when capacity ramps up with global demand for renewable energy. IN SUMMARY we need to be reviewing asset values every single year now. With asset values trending up over the last 12 months, the experts from John Ford expect their own evaluations to increase by 8 to 12% in the new year. "Traditionally, in the past, when valuations have been submitted, it's been widely accepted that those valuations are generally applicable for up to three years. That practice is not relevant anymore. We need to be reviewing asset values every single year now,” concludes David Gibbs, State Manager Western Australia, HDI Global. HDInsight Edition 8 - page 9
A Call to Action “Often our larger clients are being very proactive and are sourcing valuations. While we, as underwriters, are looking very closely at all our accounts, particularly where we are noticing that asset values haven't moved in the last few years. Where you know this is the case, that discussion certainly needs to be had. We need to encourage those clients to source valuations from a policy terms and conditions perspective.” David Gibbs Underwriting Manager for Western Australia HDI Global SE, Australia Please contact our HDI Team with questions Peter Ratering Assistant Property Underwriter HDI Global SE, Australia Watch here: HDInsight LIVE: Valuations & Asset Declarations Jane Ravi Property Underwriting Manager, Energy & Technical Risks Australasia M: +61 451 676 671 Jane.Ravi@HDI.Global Download Presentation Slides here: HDInsight LIVE: Valuations & Asset Declarations David Gibbs State Manager, Western Australia M: +61 414 420 174 David.Gibbs@HDI.Global Kristy Taylor Senior Claims Adjuster M: +61 404 257 510 Kristy.Taylor@HDI.Global Edmund Binsted Senior Energy Underwriter M: +65 9100 9947 Edmund.Binsted@HDI.Global HDInsight Edition 8 - page 10 Contact - HDI
Ryan Carruth is a forensic accountant at accounting and consulting firm Baker Tilly. He is dual-qualified in Australia and the United States, and has specialised in complex commercial disputes, insurance claims, and financial investigations since joining the firm in 1997. on the price of key inputs. It is also vital for tracking price changes by industry and comparing wholesale and retail price trends. All businesses are impacted by the cost of labour. Therefore, the labour cost index (LCI) is one of the more important indices to consider in a company’s declared value assessment. A quick snapshot of inflation: Over the years, for most countries in the region, putting Indonesia to the side, the CPI rate has hovered in the 2% to 3% range. “We have felt comfortable or even complacent with the fact that inflation was there, but was stable,” Ryan Carruth from Baker Tilly said. That has now changed: The inflation rate has at least doubled in most countries compared to the prior years – compounded of course by the Covid hangover. It's not sufficient anymore to just roll over the declarations from prior years according to Mr Carruth. It rather needs the detailed unpacking of not only the supply chain for raw material and intermediate product sourcing and local inflation pressures, but also the knowledge of where a company’s end customers are situated geographically. Natalie Storer Claims Manager, Property & Operations HDI Global SE, Australia Mark Mackay Head of Energy Eastern Region HDI Global SE, Australia The ‘HDInsight LIVE’ session on Valuations Impact on Business Interruption aimed to explore the current state of business interruption values and their potential future direction given the new market environment we find ourselves in. Inflation has been a driving force of this topic for a while now. Ryan Carruth, partner at Baker Tilly and HDI’s Mark Mackay and Natalie Storer, discussed with Karina Rodriguez Diaz the complex factors that play out in our markets. Valuations impact on Business Interruption Ryan Carruth Partner Baker Tilly Karina Rodriguez Diaz Manager Account Practice Manager HDI Global SE, Australia What is inflation? Inflation is the increase in price levels, goods and services consumers buy and sell. This measure is reflected in the rate of change of these prices. The decrease in these price levels is known as deflation. The best known and most publicised indicator of inflation is the consumer price index (CPI), which is the price of a basket of goods with particular weightings within that basket. As an example: Housing usually has the largest weighting of over 20%, whereas communication has the lowest of approximately 2%. These weightings change over time based on consumer behaviour. In the US for example, this kind of reweighting used to occur every 10 years, then it changed to every two years whereas now it's done annually. Other market indices which measure inflation are: If a company’s supply chain considers the import of raw materials or intermediate goods in its manufacturing process, the import price indices will be informative from a production input cost perspective for example. If a company’s client base is outside the country, the export price indices will be informative from a selling price perspective. For a manufacturer who is a purchaser or seller of intermediate goods, one of the most useful indices is the producer price index (PPI). The PPI reflects the change in price of goods manufactured at the wholesale level. In contrast to the CPI, which measures price changes to the consumer, the PPI is used to forecast inflation and to calculate escalator clauses in private contracts based HDInsight Edition 8 - page 11 Please note, all figures correct at the time of presentation, however values may have changed. Please contact our HDI team to discuss your specific requirements.
So, will this be persistent? “Forecasting inflation isn't easy in the best of times. Forecasting out 18 to 24 months and longer is next to impossible with any degree of accuracy,” Mr Carruth said. The consensus in March 2023 in the market among economists is that Australia hit peak inflation around October/November last year and this year should see disinflation or a settling back in the 2% to 4% range. “However, with recent strong employment data coming out of the US and other countries, and a slight uptick in inflation for January in the US, it's more wait and see as opposed to set in stone,” Mr Carruth said. His takeaway is: “We're in a volatile inflationary market and it's better to be conservative rather than overly optimistic.” Countries in Asia Pacific are integrated from a trading perspective: Raw materials and finished goods are imported as well as exported all over the region. A quick comparison of Australia and Thailand might give an idea of the consequences of this integration. Overall, there is little if any consistency in individual indices between these two countries. This is why it is essential to understand your business. What is my supply chain? Where am I buying input products from? In the case of Thailand, export prices have increased around 13% in 2022. So, if a company takes its intermediate products from Thailand and finishes them in Australia, producer prices may have increased by 6.5%. In the same period the selling price in Australia may have increased around 8% CPI. How does this impact our business or our client's business? One size does not fit all. In the current market, some businesses have suffered but several industries have also benefited – refineries, solar and wind generators for example. Solar and wind generators have very low variable costs of operation. Although the initial setup costs are high and there is some ongoing maintenance, many sites require very little in the way of labour. Sales prices have increased considerably, and that gain is essentially pure profit. Regarding refineries, their capacity has reduced over the last couple of years. Coupled with the Russian invasion of Ukraine, demand for refined fuels, petrol and diesel is higher than supply. This has increased the price that those refineries can ask. How has demand changed for their product in the current environment? If there are increased input costs, are they able to be passed along to the customer via increased selling price? How robust and diverse is the supply chain? Are they locked into long-term supply contracts? If so, are there escalator clauses? Do they have multiple supplier options? Are the suppliers in higher cost countries or lower? Can this be mitigated through obtaining alternative supply channels? What implications are there for business interruption values? Consequently, business owners need to consider a variety of aspects and brokers can start asking clients the following questions: Increased Volatility Available labour is tough to come by due to historically low unemployment rates. And if you can find workers, they're going to be expensive. From a historical perspective, it appears that labour costs are coming off their post-Covid highs and are normalizing, albeit at higher levels than in the proceeding years. “Whether you're a medium size business or a multinational conglomerate, taking a contemporary look at your business budgeting process and ultimate declared values is crucial in this inflationary environment.” Ryan Carruth Partner Baker Tilly HDInsight Edition 8 - page 12
Do they have multiple supplier options? Are the suppliers in higher cost countries or lower? Can this be mitigated through obtaining alternative supply channels? What implications are there for business interruption values? The Claim’s Perspective From a claim’s perspective, there's really two main issues that arise out of the current environment: the accuracy of declared values and claims inflation according to Natalie Storer, Claims Manager at HDI Global SE. Claims inflation refers to the accuracy of declared values, particularly given supply chain delays and extended reinstatement times. To have valuations right from the start is important for a streamlined and positive claims experience, Ms Storer explained. Valuations are important as they establish the correct value of the property asset or business at the time the insurance policy is taken out. Inaccurate valuations have several impacts on the claims process. “Some of the main issues that we encounter are delayed claim processing,” Ms Storer said. “Often if the valuation is inaccurate, the process will have to be delayed while we investigate and assess the true value of the property.” Occasionally this can result in disputes over the value of the property, which involves more experts, costs, and delays. Regardless of under or over insurance this very often ends up with misaligned expectations between the insurer and the policy holder. For example, the policy holder might expect a larger claim payout than the insurer is willing to provide. “And that can lead to frustration and dissatisfaction with the claims process, and that is not the experience that we want our clients to encounter,” Ms Storer said. Currently several factors cause volatility: The cost of goods and services is increasing, and therefore the cost of replacing an asset and the declared value should also be increasing. The recovery times are longer in the current economic cycle and therefore the business interruption periods are extended from what they were a few years ago. How did Covid-19 impact my historical sales? Are those levels appropriate to consider for the next 12 months? How is demand and supply affected by the current inflationary pressures? How flexible is the market to absorb selling price increases? If I cannot pass on all the increased input costs, how will my rate of gross profit be affected – positively, neutrally, or negatively? Is my estimate of time to reinstate reasonable? Is my supply chain robust and diverse enough to accommodate my needs? Do I have enough payroll coverage? And if I have not insured payroll before, should I now with the tight labour market so I can retain critical staff? Will I have access to the required technical labour to reinstate quickly? Do I have any or enough ICOW and AICOW coverage? Should I consider adding or increasing my limits? (Noting that mitigating actions to protect lost revenue might not be economical but might be necessary to minimize losses outside of the maximum period of indemnity.) Areas to investigate when updating or revising declared values: HDInsight Edition 8 - page 13
What market factors will affect that business interruption period? Supply chain disruptions have occurred throughout the world in various different industries. Labour shortages along with increased labour costs make it more difficult to get workers and then afford labour. And economic downturns are affecting demand. Natural disasters have also played their part impacting supply chains but also prolonging the business interruption period as there are a lot of claims in one place. “It's difficult to get contractors on site and difficult to get things done as quickly as you used to,” Ms Storer said. “In some of our large cases, we couldn't actually get people on site to assess losses, so that was proving difficult.” She therefore labels it the perfect storm of issues that might impact business interruption periods. Working with Clients “Clients are of course saying: ‘Well, look, I'm trying to forecast here. I'm doing my best. These are the assumptions, but who knows what's going to happen in 6 months or 12 months down the road, particularly if I have a large loss and I could be down for many months or even a year.’ So, what is necessary is a fair compromise. How can we share the volatility between us? We don't want to lock in our clients with such a rigid policy framework that the slightest undervaluation is penalized. Instead, we want an understanding that they will do their best to estimate. And the policy has some protection for insurers, but it's not punitive to the insured.” Mark Mackay Head of Energy Eastern Region HDI Global SE “We've noticed that some businesses are planning for longer indemnity periods. It is important to then not forget to adjust the business interruption values as well. We have encountered one or two claims recently, where the indemnity period had been extended, but the valuation or the declared value was still based on a 12-month indemnity period.” Natalie Storer, Claims Manager, Property & Operations HDI Global SE HDInsight Edition 8 - page 14 Please contact our HDI Team with questions Watch here: HDInsight LIVE: Valuations impact on Business Interruption Download Presentation Slides here: HDInsight LIVE: Valuations impact on Business
An Expert in Emergency Response Shaun Filer has worked in the field of international risk management, disaster response crisis and emergency management, as well as close protection consulting for nearly 20 years. He is regularly deployed as a trusted advisor and emergency team leader during international crises. His recent experience on high profile cases, includes Ukrainian, Syrian, Iraqi, Libyan, Afghan, Southern Philippines conflicts as well as the Egyptian and Thai civil unrests. He also helped in the immediate aftermath of several natural disasters. Shaun holds postgraduate and undergraduate degrees in international relations, journalism and risk management and has a military and emergency background. He is also currently completing a PhD focusing on environmental peace building and the linkages between climate science and conflict. HDI Global launched its local A&H line of business with lead underwriting manager Chris McDowell in 2020. “It was a pretty challenging time given the pandemic,” said McDowell. “However, given the work HDI’s market management team [did] supporting and connecting with our partners throughout the pandemic, it really helped us to get better exposure to our brokers.” Now three years on, corporate travel and expat cover for corporate and mid-market clients, including international programmes, remains the group’s core focus. To offer HDI Global Assist, HDI has partnered with crisis response management experts PACE First to offer 24/7 global emergency assistance. Rapid advancements in technology over the past few years has made this offer possible. Chris McDowell A&H Underwriting Manager HDI Global SE, Australia Rinnah Roque Service Delivery Manager Producing Office IP HDI Global SE, Australia Shaun Filer CEO PACE First As borders open again across the globe, the HDI Accident & Health (A&H) underwriting team believe that access to 24/7 emergency assistance has never been more important. With experience supporting a wide variety of projects from domestic and international travelers, to mining companies, professional sporting teams, or film and documentary crews going into remote areas in anywhere from Iraq to Mongolia to the Pacific. The HDI team understand the challenges for companies protecting their people at home and abroad. Travel Safety at the Push of a Button Erika Gutierrez Market Manager QLD HDI Global SE, Australia As part of the ‘HDInsight LIVE’ series, HDI experts Chris McDowell, A&H Underwriting Manager, and Rinnah Roque, Service Delivery Manager Producing Office IP, held an education workshop on Accident & Health (A&H) together with HDI partner Shaun Filer, CEO of PACE First (HDI’s third party emergency assistance partner). The session focused on Travel Emergency Response. HDInsight Edition 8 - page 15 Please note, all figures correct at the time of presentation, however values may have changed. Please contact our HDI team to discuss your specific requirements.
“Our basic product with HDI Global Assist gives customers the critical points like local alerts, a way for us to communicate with them directly, not only on a call, but a push button for two-way messaging.“ Shaun Filer CEO PACE First This allows managers with the Insured to monitor where their people are, and in the event of a crisis or emergency to push out and communicate through the platform, or even draw a circle on the map to say: “Everybody in this circle, I want to notify you of something.” An important feature of the technology is that the services are also available domestically within Australia. “Our emergency operations center allows us to actually dispatch [government] emergency services on our client's behalf,” Mr Filer said. “If people get in trouble, even while travelling locally or at their office, with HDI Global Assist, they can essentially just push a button and escalate through to us.” Just a few years ago, travel risk management only involved passive information like a flight schedule or a hotel booking. In the case of an emergency, a 15-minute call was necessary during which the insured needed to answer questions like: What is your medical or your security case? What help do you need? Where are you? While critical questions, establishing this baseline information delayed emergency response times in situations that could be life threatening. Today, as soon as customers push a button, all the necessary actionable information is transferred automatically. “We know who they are, where they are and often how to contact and communicate with their manager, if necessary,” Mr Filer said. Time can be of the essence in an emergency and this new approach takes any of that guesswork out of the initial moments, which can be critical when people might be at risk, need help and support, and don't have time for that 10 or 15-minute initial phone call. This means clients have the security to be in conversation with medical teams within moments. The premium product HDI Guardian App takes this further and allows for monitoring of devices or automated check-in schedules. Overall, PACE First services include critical communications monitoring, welfare checks, messaging, automated alerts, and notifications relevant to the traveler, all of which is visible on a dynamic global map. “Over the years, we put a lot of these little puzzle pieces together that were supporting our teams when they were being parachuted into a country after major natural disasters or civil unrest, or if there was a conflict in play,” said Shaun Filer, CEO PACE First. “There is no card in your wallet or in your passport book anymore.” Now from, monitoring, scheduling welfare checks, or a push button for escalation to PACE First emergency centers (amongst other functionality) – everything in HDI Global Assist is handled electronically and remotely. HDInsight Edition 8 - page 16
Being Prepared before Travelling It is important to communicate to clients that they have an open door if they need some review or consultation, prior to travel. It is helpful to get information on certain risks before travelling and PACE First can provide detailed country risk assessments. After purchasing HDI Global Assist, client managers get access to the global map showing location of selected employees, global alerting platform, and HDI Guardian app. An example for a corporate client could be a mining company. These clients often have a lot of domestic and global travel, including to remote areas in high-risk regions around the world. They would receive access to HDI Guardian via mobile phones for travelers and expats, but could also add satellite phones or even vehicle tracking devices. The HDI Guardian app is priced into the travel or expat policy and normally based around the number of overseas travelers. The registration process for loading employees onto the HDI Guardian app is straightforward: HDI provides an onboarding template when the policy documents are sent out. The client provides the names of the insured persons, their phone numbers, email and type of phone, whether that's Android or iPhone. The login details and instructions will be sent out individually to each person so they can download and register the app. If there is an escalation, a medical or security issue for example, HDI Global Assist will respond and can communicate and let managers know where a case has occurred. If it's considered critical, the matter will be escalated further. An example for such a situation could be civil unrest near one of the mining sites. Employees that are on the HDI Guardian technology will receive push alerts and notifications, risk updates, and the company’s assistance team can activate some additional timings for welfare checks, usually conducted in the morning and evening, to give management comfort in assuring everyone is accounted for. “At the same time that we are communicating with the HDI Global team about what's happening; we're also working through pros and cons of different actions directly with the client and their crisis management group,” Mr Filer said. The platform can also be used for sending out reminders, pandemic alerts, or general wellbeing information. “We find that HDI clients who download the HDI Guardian app are using it regularly,” Mr Filer reported. “We have people going on a bushwalk and they'll activate the ‘Monitor me’ function and we'll just have them pinging in the background. Or we have others that are leaving the office late from work or jumping in a taxi at an airport, and they send a quick message or a photograph of the taxi driver's information, so it's logged if anything comes up.” PACE First can also help with local fixers, translators, or drivers if a client is in need of additional support. HDI Global also provides International Programmes (IP) and issues policies through its network in over 175 countries around the world. In the past, HDI Global has issued such programmes in countries like China, the UK, or the US as well as Kazakhstan and Mongolia. “When implementing an IP, we need to make sure that we are actually meeting the local requirements of the country,” Rinnah Roque, Service Delivery Manager Producing Office IP at HDI Global explains. "HDI Global’s A&H Travel offer is also available as an International Programme (IP). This type of insurance is centrally managed but tailored to local regulations and therefore ideal for customers that operate and/or have subsidiaries in countries all over the world. " Rinnah Roque Service Delivery Manager Producing Office IP HDI Global. HDInsight Edition 8 - page 17
In China, for example, it is a local requirement that the provided information includes a list of employees. “In some very rare situations where we don't have any representation and no partners are able to provide a local policy for our client, the cover will be provided under the master policy in Australia, and the cover will be via the IP clause if non-admitted insurance is not permitted in the country,” Ms Roque said. “In terms of A&H, countries of risk are defined as the countries where insured legal entities or entities with employees are domiciled, and for Business Travel, where there are entities with employees who travel. For example, a client in Australia may have a subsidiary in Malaysia with employees who are travelling. In Malaysia, non-admitted insurance is not permitted so we would look to issue a local travel policy for the client,” Ms Roque said. Another example could be if a client has a local subsidiary in New Zealand, where non-admitted insurance is permitted, HDI Global can cover the risk under the master policy. Best Practice IP In order to issue a policy, we need the complete local entity name and their address, as well as a local contact person’s email address and phone numbers. It's also important that we understand how the client would like to pay the premium, whether they want to pre-pay the premium here in Australia, or if the payment should be made locally in the country for example. The same process that we do for other businesses, still applies for accident and health,” the IP expert explains. To keep clients informed on a global basis, HDI Global offers a platform called IP Web. Please contact our HDI Team with questions “This is a 24-hour platform, or portal, that customers can log onto. They can see their local policies, any claims status, or information about claims or the policy itself. In addition to A&H, HDI offers international programmes for property, marine, liability, as well as engineering and construction lines of business. “Once we have identified the countries of risk, we will prepare a programme structure. So technically speaking, clients will have a master policy, and then after assessing the countries, we will determine which countries require local policies. If a local policy is required, we will check if we have an HDI office or branch in the country. If we don't have one, we should have a partner insurer. I will then check whether HDI has a policy in the country to cover the requirements of our clients, for example a business travel or a group personal accident policy. If we don't have an existing partner in a particular country, we would explore an individual solution. I will then reach out to our head office in Germany and explore the possibility of contacting a reputable insurance company who might have the potential to issue a local policy for the client,” says Ms Roque. Chris McDowell A&H Underwriting Manager M: +61 406 591 458 Chris.McDowell@HDI.Global Rinnah Roque Service Delivery Manager Producing Office IP M: +61 (0)426 452 730 Rinnah.Roque@HDI.Global Contact - HDI HDInsight Edition 8 - page 18 Watch here: HDInsight LIVE: Travel Emergency Response Download Presentation Slides here: HDInsight LIVE: Travel Emergency Response
Khoder Chehade, Underwriting Manager Motor, Australasia at HDI Global SE says the response from the market has been “positively overwhelming”. Corporate clients are expressing a lot of interest in the product, he explained during a HDInsight LIVE online education session on Motor Fleet insurance and the claims process with HDI Claims expert Natalie Storer, and Phillip Dilger and Antonia Topic of Sedgwick. Launching at the start of 2023, the new product is on offer for all vehicle classes including Heavy Motor, Mobile Construction Plant & Equipment (including Mining) as well as Light Commercial Vehicles such as Sedans, Utility Vehicles and 4x4s. A Reliable Partnership HDI Global engaged Sedgwick as third-party claims handler for the execution of its Motor Fleet Insurance product. Sedgwick, a global provider of a range of services to insurers, brokers, and corporates, has a presence in 65 countries including Australia, and has experience handling claims across A&H, travel, property, casualty, liability, and of course motor. Similarly to HDI, Sedgwick benefits from the breadth that the different international insights offer. “We've been operating as an outsource claims management provider, a Third-Party Administrator (TPA) in Australia for a bit over 20 years now,” says Phillip Dilger, National Operations Manager at Sedgwick during the HDInsight LIVE session. Sedgwick’s teams are structured on a portfolio management approach, not a shared workflow or queue management approach. Natalie Storer Claims Manager Property & Operations HDI Global SE, Australia Khoder Chehade Underwriting Manager Motor, Australasia HDI Global SE, Australia Phillip Dilger National Operations Manager Sedgwick Antonia Topic National Claims Manager Sedgwick HDI Global SE, Australia is now offering Motor Fleet insurance as part of its extensive line-up of products for corporate clients. Led by Khoder Chehade, the HDI Motor Fleet offer is unique as all vehicle classes are insured under the one comprehensive wording Motor Fleet Insurance & Claims Process "This means that one individual consultant has ownership of a claim from beginning to end with support from within the team as required,” Mr Dilger explained. HDI Global has a dedicated claims team within Sedgwick, which aligns consultants with specific portfolios so clients then have a specific point of contact at Sedgwick. With HDI growing their client base and Sedgwick’s claims portfolio expanding, the company has committed to sourcing specific skill sets where they're required to meet the needs of clients. “One of the great benefits of Sedgwick’s global presence is that we are able to leverage learnings, trends, and insights from different countries to inform our Australian operations,” Mr Dilger said. “We’re always looking for ways to make the claims process simpler and to improve the experience of everyone involved.” Sedgwick also have a 24/7 customer service team who handle any out of hours inquiries, with the ability to cater for time-differences due to daylight savings across Australia. EVs are not an issue from an underwriting perspective or from an onboarding perspective. However, they do require specialist repair processes, as do many other modern vehicles. From a coverage perspective, HDI’s policy addresses the topic that EVs may cause damage to property whilst on charge as the batteries can be a fire hazard. This is an item that HDI also covers under the policy. HDInsight Edition 8 - page 19 Please note, all figures correct at the time of presentation, however values may have changed. Please contact our HDI team to discuss your specific requirements.
flippingbook.comRkJQdWJsaXNoZXIy MTM4OTY1OA==