HDInsights May 2024 Ed.12 HDI Asia Pacific Newsletter
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May 2024 | Edition 12 4 6 7 8 10 14 15 17 18 19 24 25 Foreword - Stefan Feldmann Hello from Hong Kong - Daniel Lau Hello from Singapore - Graham Silton HDI Global 2023 results confirm strong financial stability, Australian business grows profitably NatCat and Physical Climate Risk Assessment Be prepared - Flood Events Fact Sheet Surge in vessel fires linked to lithium-ion batteries sparks safety concerns Marine Cargo - Fast Track Claims HDI Global grow mid-market segment Geopolitical Risk and Travel in 2024 HDInsight LIVE: Corporate Nuclear Verdicts Germans in Australia: The benefits of international in-person collaboration Contents
In Melbourne, the team tee-ed off the year with a Prestige Golf Day at the Royal Melbourne as well as a day at the Formula 1 joined with HDI Global Specialty and our broker partners. Both enjoyed fine weather and an opportunity to enjoy activity and some competitive spirit. HDI Team ‘Together One of the most rewarding parts of being a leader is welcoming all our HDI team from across Australia for our annual All Staff Kick Off. Bringing together new and existing staff, and weaving relationships across our commercial and specialty businesses. This year our event was hosted by the enigmatic Shaun Kenny who led the team through a series of activities where we celebrated what makes ‘One HDI’ successful, how to build on our unique culture and inspire leadership and entrepreneurship across the organisation. A successful start to the year As we approach the busy June season, we welcome all our broker partners to contact us with any questions regarding renewals and new business opportunities. Particularly any challenges, we are here for you so please let the team know if we can assist. HDI Events It’s a timely moment to reflect on Q1 as we all began the new year full of energy and anticipation for what 2024 would bring. In February, our Sydney team welcomed over 100 broker partners for the first HDI Happy Hour of 2024. Meanwhile our local offices in Brisbane, Melbourne, Perth and the Adelaide team were also busy engaging with brokers. Queensland hosted a ‘Sunset Soiree’ in March to kick off the year with our brokers in the region. Stefan Feldmann, Head of HDI Global Asia-Pacific Managing Director HDI Global SE, Australia Foreword HDInsights edition 12 | page 4 Image: Abishesh Chettiar, Stefan Feldmann, Erika Gutierrez and Willem van Wyk welcome guests to ‘Sunset Soiree’ in Brisbane. Image: HDI Australia team gather for the annual all staff kick off 2024
In March, our HDI Global Accident & Health underwriting team and our emergency response partner Shaun Filer CEO PACE First explored Geopolitical Trends & Risks in 2024. We were delighted to also welcome our global head of A&H Christoph Schulz, who very kindly woke up very early in the morning to join the webinar and share his perspective on this important topic. Please read more on page 19 to share with your clients and support their travelling staff this year. HDI Community This year I have again had the opportunity to participate in Tour De Cure. This year the beautiful ride took us 1,300 kilometers - from Hobart to Adelaide. This Signature Tour raises vital funds for cancer research and education, and ultimately, to advance towards finding a cure to cancer. I would like to thank all the generous donors who gave to this wonderful cause and together we raised over $19,000 towards Tour De Cures mission. It is so inspiring to be part of a group with such impact and overall the Tour raised over $2.2 million which fund research, prevention and support for the thousands of Australians living with cancer. I hope this newsletter issue will give you some new insights and deliver information as well as inspiration. Please do reach out to myself and my colleagues with any questions or suggestions you might have. It is an exciting year ahead that we look forward to sharing with you all. This year we have also welcomed our latest new additions to the team who join us through our HDI Graduate Program. Each of our new recruits will spend the next rotating through various lines and areas of the business. Learning all about our business and the wonderful world of insurance. We wish them an inspiring year of growth and a long and successful future in our industry which has brought us all so much reward and opportunity. HDI International Programme & Mid-Market As we continue to grow our International Programmes, one of the early highlights for the year has been sharing our knowledge and technical expertise with our broker partners. Rinnah Roque - HDI Australia Regional Service Delivery Manager Producing Office, International Programmes - travelled to Melbourne and Brisbane to present an IP Masterclass with our strategic broker partners and guests. These education sessions have resulted in a number of new opportunities for the team to support brokers and their multinational corporate and also mid-market clients. It is terrific to leverage our local expertise and our global network in over 175 countries to implement responsive international programmes. Rinnah also set off to Singapore to work with our regional broker partners on how we can support their business also. You may have also read our recent global release on HDI’s commitment to mid market business. Here in Australia we already have a strong book and look forward to continuing to bring our expertise and strong financial backing to grow in this market further. You can read more on page 18 and please reach out to the team to learn more how they can support you with your clients. HDInsight LIVE In this issue we are pleased to share highlights from our HDInsight LIVE online seminars. In February we were delighted to welcome one of our global risk engineering experts on Natural Hazards - Wiebke Cundill. Wiebke spent four weeks in our offices training with colleagues. She also joined some of our local experts for our online seminar series to share her knowledge on NatCat and Physical Climate Risk Assessments. On page 10, you can learn more about the HDI expertise, including a new tool recently released by home office which supports clients in their regulatory reporting on physical climate risk assessments. HDInsight Edition 10 - page 3 Foreword Image: Stefan Feldmann with Ritchie Port, podium finisher in Tour de France 2020, together riding for Tour de Cure Stefan Feldmann Head of HDI Global Asia-Pacific Managing Director HDI Global SE, Australia
As we reflect on the recent events in Hong Kong, it's evident that the spirit of enthusiasm and celebration continues to thrive within our organisation. Our team has launched this year with festivities as we connect with our colleagues and community. Our Spring dinner stands as a testament to our team spirit, as we joined for a delightful meal and exhilarating Mahjong competitions. HDInsight Edition 10 - page 3 Hello from Hong Kong Daniel Lau, Managing Director HDI Global SE, Hong Kong Hello from Hong Kong HDInsight Edit on 10 - page 5 Daniel Lau Managing Director HDI Global Hong Kong Kind regards, In addition to our Spring Dinner, we celebrated the Chinese New Year in style with Lebuan’s Chinese New Year Luncheon. This occasion allows us to embrace tradition and culture while fostering strong relationships with our valued business partners. Through the symbolic act of Tossing Lohei, we ushered in abundance, good fortune, and unity, setting the stage for a year filled with success and prosperity that we look forward to sharing with you. HDInsights edition 12 | page 6
HDInsight Edition 10 - page 3 Hello from Singapore Graham Silton, Managing Director HDI Global SE, Singapore Hello from Singapore HDInsight Edit on 10 - page 5 It is with anticipation, pride and some sadness that I write this, my final update from HDI Global Singapore. At the end of June this year I shall retire, and our team will welcome Alex Tarantino to lead our growth into the future. I am so very proud of the talented team I have had the privilege to lead and work with here in Singapore. We have learnt together and built a strong network and brand reputation with our business partners in the region. Alex joins our team with exceptional technical expertise in Liability, collaborative cross class underwriting and International Programmes and is well placed to lead our team and bring the best of HDI to support our business partners as a partner in transformation. I'm thrilled to share with you the dynamic strides we've taken in the first quarter of this year with a strong start to the year for HDI Global Singapore. We were able to focus on bringing the team together in order to strengthen our capabilities internally, and foster our valued broker relationships internationally. Our team were delighted to welcome Rinnah Roque our Regional Service Delivery Manager Producing Office IP, to deliver a series of International Programmes meetings with of our broker partners. These were done in collaboration with our underwriting team and a marvelous opportunity to highlight our global capabilities in this service. With our network of 175 countries and global experience writing 5000 International Programmes, this is a strength we are keen to grow and support our local partners in. Adding to our roster of accomplishments, Kenneth Chong, our Marine Cargo Underwriting Manager, recently contributed as a panelist at the Marine Insurance Asia conference in Singapore. His discussion on "Throwing the BMW out with the bathwater" offered valuable insights into our global automotive strategy, addressing core issues like fires onboard vessels, our proactive risk management practices, and the future landscape of electric vehicles. I wish you all continued success and good health. Please do not hesitate to get in contact with myself or any of the team. All the best, Graham Silton Managing Director HDI Global Singapore Celebrating diversity and empowerment, our team marked International Women's Day with a delightful high tea. It was a momentous occasion to honour the remarkable contributions of women in our team and beyond. Our team were pleased to join together to hold a CSR initiative with Willing Hearts. The event took place to help prepare and distribute meals for families and individuals here in our local Singapore community. It was a great event to get involved in and connect with a meaningful cause.
On a worldwide scale, HDI Global lifted insurance revenue by 10 percent to EUR 9.1 (8.2) billion in the fiscal year 2023, or 12 percent after adjustment for currency effects. This demonstrates the success of the industrial insurer’s strategy as a globally active Partner in Transformation for its clients, providing excellent service as well as profitable underwriting. The growth is primarily driven by property and liability business, which resulted in a good insurance service result of EUR 770 (574) million, on the back of higher interest rates, a low level of frequency losses, and low large losses. Large loss payments were within budget at EUR 334 (381) million. Consequently, the combined ratio for HDI Global improved to 91.5 (93.0) percent. The net insurance financial and investment result before currency effects amounted to EUR 11 (169) million; this was due among other things to higher interest rates and the conscious decision to accept disposal losses when rebalancing from lower-yield investments to higher-yield ones. The operating profit rose to EUR 446 (430) million, and HDI Global’s contribution to the Talanx Group’s net income climbed by 13 percent to EUR 351 (311) million. When looking at the Australian business, both Mark Fleiser and Stefan Feldmann are positive. “The results reflect the prevailing strong market environment, coupled with a benign catastrophe season and the focus of the teams to ensure that we maintain underwriting discipline and pricing adequacy,” Fleiser said. “In 2023, we again saw strong growth in our Australian commercial business thanks to our close relationships with the market. We launched our Motor Fleet product and achieved twice our initial expectations. The Accident & Health line continues to grow, and we’re pleased to bring our expertise across all lines including Property, Engineering, Marine and Liability to brokers with mid-market clients, which now makes up over a third of our book.” Stefan Feldmann Head of HDI Global Asia-Pacific Managing Director HDI Global AU HDI Global 2023 results confirm strong financial stability, Australian business grows profitably HDI Global 2023 results confirm strong financial stability, Australian business grows profitably Reporting on the full year of 2023, Industrial insurer HDI Global SE has announced double-digit growth in insurance revenue and a further improved combined ratio. The results are backed by strong performances in the liability and property lines. HDI in Australia grew profitably in a competitive market. The Australian operations thus contributed to the positive overall result of the Germany based multi-national industrial insurer belonging to the Talanx Group. “Market conditions for specialty lines have also been favorable in 2023, despite a number of new players entering the specialty market resulting in areas of increased capacity. We grew strongly in Professional Indemnity, Aviation as well as Sports, Leisure and Entertainment. Also, we were able to expand via some new MGA relationships and maintain a strong pipeline of Delegated Authority business opportunities.” Mark Fleiser Managing Director, HDI Global Specialty AU HDInsights edition 12 | page 8
“In Specialty lines we have several exciting initiatives to further grow our Single Risk offering which will be rolled out during 2024. Furthermore, our Delegated Authority portfolio is growing, and we continue to selectively explore new opportunities. In addition, in both Delegated Authority and Single Risk business we see strong growth opportunities using our New Zealand licence,” Fleiser added to the positive outlook for 2024. Contact - HDI Feldmann added: “International Programmes have been a key pillar for our success last year with 50 new programmes established by our knowledgeable team. We are now a recognised partner when it comes to providing international solutions for our multinational clients.” Bringing the company vision of being a Partner in Transformation to life resonates with the Australian teams as well as with customers looking to find their own process towards a greener and more sustainable future. “As a leading provider in the Renewable Energy market, we provide our clients with a range of cover and insights from construction all the way through to operations in Battery Energy Storage Solutions, Hydropower, Solar parks and Wind farms,” said Feldmann. The outlook for 2024 is also optimistic. “As a combined business HDI Global and Specialty are now well above $1B in Gross Premium in Australia and a meaningful market player. As a long-term, reliable partner offering a consistent and stable market, we’ve evolved and are continuously expanding our offering in Australia and the region in the corporate and now growing midmarket segment across all lines,” said Feldmann. HDI Global 2023 results confirm strong financial stability, Australian business grows profitably Stefan Feldmann Head of HDI Global Asia-Pacific ManagingDirector P: +61 420 176 170 stefan.feldmann@hdi.global Please contact our HDI Team with questions Mark Fleiser ManagingDirector P: +61 405 330 153 mark.fleiser@hdi-specialty.com HDInsights edition 12 | page 9
This has been contributed to by the unusual triple La Niña and currently more than 50% of climate models are predicting a return of La Niña in 2024. “If this happens, it will bring our fourth La Niña in five years,” she said. In 2022, Queensland and Northern New South Wales were hit with floods. These presented significant problems for the industry, given the number of claims and the difficulties in accessing resources to manage them: Loss adjusters were in high demand as were hydrologists and other experts. In 2011, Al Gore the former Vice President of the United States, said: “The science linking the increased frequency and severity of extreme weather to the climate crisis has matured tremendously in the last couple of years.” His quote, once published in the Washington Post, still reverberates among experts for natural catastrophes. In 2022, catastrophes and natural disasters amounted to an economic loss of USD 80 billion in the Australia-Pacific region. Around 86% wasn't covered by insurance, representing a significant market gap. Flood losses amounted to around 50% of these figures. The frequency and severity of natural hazards has increased with Australia particularly vulnerable. To support clients in these changing times, HDI has developed a system called ARGOS (Accumulation Risk Geospatial Online System) which gathers data from research institutes, weather stations, and seismographs. Along with other countries, Australia has experience of the increase in Natural Catastrophe (Nat Cat) events occurring worldwide. “Our figures show that natural catastrophes are accounting for greater claims volume and severity,” said Natalie Storer, Claims Manager, Property & Operations, Australasia for HDI Global. Roughly 45% of HDI claims numbers stem from a Nat Cat event in the last two years and these have accounted for over 60% of the claim’s costs, the expert explained. “Temperatures in Australia have been increasing over the last 10 to 20 years and as we have also seen, this was accompanied by an increase in the intensity of heavy rainfall events,” said Ms Storer. “So, whilst we used to be a country of fire and hailstones, floods and heavy rainfall have been the predominant force over the last few years.” HDInsight LIVE Webinar NatCat and Physical Climate Risk Assessment “The 2019/20 bushfire season saw almost a third of Australians impacted by those events, whereas the 2022 flood and storm events impacted 70% of Australians living and working in areas affected by the floods.” Natalie Storer Claims Manager Property & Operations, Australasia HDInsights edition 12 | page 10
HDInsight Edition 10 - page 21 “He said this more than 10 years ago and indeed we do see more events and these events are becoming stronger,” says Wiebke Cundill, Senior Risk Engineer Natural Hazards at HDI Risk Consulting in Germany, during the HDInsight LIVE Webinar on Nat Cat and Physical Climate Risk Assessment. “We certainly see the effects for our clients.” Ms Cundill provided statistics from 2021, which was called “a year of extremes” with Hurricane Ida in the US creating a loss of USD 65 billion, Flood Bernd causing USD 54 billion of damage in the European Union, and another winter storm in the US adding USD 30.1 billion to the bill. Canada also counted USD 16.5 billion in flood damage that year (all total losses). Australia’s Halloween hail and storms caused about USD 675 and 550 million in insured losses in 2021 respectively. Globally, the years that followed were hardly better: 2023 saw a devastating earthquake in Turkey and Syria, floods, storms, and then a drought in Europe, storms in the US, and a flood and cyclone in New Zealand. And 2024 has already started with wildfires in Chile and severe flooding in California because of atmospheric rivers that transported hot and wet air from Hawaii. “You can see that it is happening all over and it's not a local phenomenon,” said Ms Cundill. The same has happened with extreme cold weather events that occurred suddenly in the normally warmer US state of Texas, while typically cold regions like Canada and the north of the US have seen extreme heat waves. In general, scientists have recorded a general warming of the climate notes Ms Cundill. “One trend that we can see is more heavy rainfall events which are causing an overload of run-off often overloading drainage systems,” Ms Cundill said. “So, the changing climate leads to a change in natural hazard events and climate risks.” Overall, the industry in Australia saw close to $7 billion of reported losses in 2022, and the Queensland/New South Wales floods surpassed the longstanding record holder – the 1999 Sydney hailstorm – as the largest insured loss event on record with an excess of $5.8 billion of reported losses compared to the $5.57 billion from the hailstorm event. How can industries adapt to the changing climate and become more resilient? HDI Global can support clients in this process starting by identifying what kind of exposure clients have. Do locations have wind, fire, or flood hazards? Are they next to a river, a mountain, or a steep hill and where is the water going to run off when it rains? For Australia, the statistics show that the country’s mean surface and air temperatures have increased about 1.4 to 1.5 degrees since records began in 1910. The data shows a certain trend where the southern part of Australia has seen a decrease in rainfall, whilst the northern part has seen an increase. On top of this reoccurring weather patterns like El Niño and La Niña also influence these new developments. HDInsight LIVE: Nat Cat and Physical Climate Risk Assessment “HDI Global’s risk engineering team in Australia consists of 16 engineers whilst globally the company employs more than 180 engineers. We are all keen to support and help our clients mitigate risks.” Philipp Glanz Risk Engineering Manager Australasia HDInsights edition 12 | page 11
After defining the exposure, the team works on mitigation measures and a plan to prevent these types of events from having an effect. One example is a flood emergency response plan. A simple improvement to limit losses might be a semimobile door that can be opened and closed. Other measures might include reinforcements of buildings against earthquake shock and typhoons or the elevation of production locations against flooding. Other measures that can limit potential losses are annual drainage checks, stationary flood protection, the professional installation of backwater protection, and operational emergency plans. HDInsight Edition 10 - page 21 HDI Global also plans to include data that looks at the climate risks. “At this point, the exposure information is based on historical data. Coming up, when we talk about climate risk, we look into the future,” Ms Cundill said. The team aims to offer a prognosis with a score for various scenarios for the decades leading up to 2100. There are also improvements planned for landslides, increased snow load as well as an updated wildfire and bushfire map. Whilst the tool is currently only used internally, it will soon be open to the market and made available for customers so that they can also perform their screening and site analysis. “As property underwriters, we work very closely with our risk engineering team, and we need to consider Nat Cat alongside ESG considerations. Tailored risk assessment and coverage options ultimately aid businesses in understanding and mitigating natural disaster risks. Comprehensive Nat Cat modelling for insurance policies can provide better financial security post-disaster, ensuring appropriate coverage limits and premiums for clients' recovery needs, and business continuity. By addressing Nat Cat risk and ESG considerations in insurance, businesses can enhance their long-term resilience to environmental and social challenges. Proactively managing these risks can help mitigate potential disruptions to operations, protect assets, and contribute to sustainable business growth over time as well as enhance a client’s reputation.” Jane Ravi Property Underwriter Manager Energy & Technical Risks Australasia Within ARGOS, the innovative geo-information system allows HDI Global to estimate the extent to which a particular location is exposed to natural hazards like earthquakes, typhoons, and floods. The system refers to historical and current data from research institutes, weather stations and seismographs around the world. HDInsight LIVE: Nat Cat and Physical Climate Risk Assessment The next step is then to define protection measures. If the client is still in the planning and construction process, it might be worthwhile to examine the location and avoid being in a floodplain or too close to bushland. “The goal is always to reduce the risk,” Ms Cundill said. “If you make it as low as possible, you have a higher resilience to any event that might be coming.” Currently, in addition to ARGOS, the team also include local maps and local information in their risk engineering work. After assessing the catchment and the dangers within, they also examine what the client is doing and where the weak spots/vulnerabilities might be. An example of a vulnerability might be a basement which could be flooded during a storm. HDInsights edition 12 | page 12
Contact - HDI HDInsight Edition 10 - page 21 HDInsight LIVE: Nat Cat and Physical Climate Risk Assessment Natalie Storer Claims Manager, Property & Operation Australasia P: +61 459 550 770 Natalie.Storer@hdi.global Take heavy rainfall as an example: with ARGOS, HDI Global can quickly estimate the flooding potential in a selected area. The teams can determine flood depths using different return period scenarios for any point on the map, whether that’s for limited local flooding from heavy rainfall or more widespread inundation from river flooding. To do this, high-resolution terrain models have been combined with climate models for rainfall, transforming an abstract risk into something more tangible and instantly recognizable. At the same time, HDI Global uses natural catastrophe models to determine individual loss potentials and their exceedance probability for clients. ARGOS can also provide clients with a detailed analysis of all their locations around the world. It yields an HDI Nat Cat Score Overview which allows the company risk management to understand the severity of the Nat Cat exposure at each location. “It is important to note that this isn't just important for existing industry sectors or assets. It's also important for new and emerging industries, such as renewable energy.” Haris Michaels Underwriting Manager Engineering, Australasia Philipp Glanz Risk Engineering Manager Asia Pacific P: +61 498 016 552 Philipp.Glanz@hdi.global Jane Ravi Property Underwriting Manager Energy & Technical Risks, Australasia P: +61 451 676 671 Jane.Ravi@hdi.global Haris Michaels Underwriting Manager Engineering, Australasia P: +61 498 052 656 Haris.Michaels@hdi.global Please contact our HDI Team with questions Wiebke Cundill Senior Risk Engineer, Natural Hazards P: +49 (0) 511 645 59588 Wiebke.Cundill@hdi.global HDInsights edition 12 | page 13 Watch here: HDInsight LIVE: NatCat and Physical Climate Risk Assessment
Contact - HDI Flooding is one of the most common natural hazard events that can cause widespread damages. In order to minimise the possible risk, ensure the safety of personnel, reduce property damage as well as business interruption, the risk at a site should be known and mitigation measures and emergency response plans set-up. This Preparedness Plan aims to support business owners and their employees to prepare their site for a flood that may threaten the business and its operations.. Be prepared - Flood Events HDI Risk Consulting Please contact our HDI Team with questions Click to view factsheet Philipp Glanz Risk Engineering Manager Asia Pacific P: +61 498 016 552 Philipp.Glanz@hdi.global We are HDI Global. #PartnerInTransformation Click here to view factsheet.
Surge in vessel fires linked to lithiumion batteries sparks safety concerns At the beginning of January, Genius Star XI was shipping lithium-ion batteries from Vietnam to San Diego, when a fire broke out and the crew had to alert the Coast Guard. Only a few months earlier the car carrier Fremantle Highway burst into flames with over 3,000 vehicles on their way from Germany to Egypt. In 2022 a fire on board the car carrier Felicity Age led to the vessel sinking in the Atlantic Ocean and in 2020 the Höegh Xiamen caught fire also resulting in the total loss of the vessel. More than 2,400 used vehicles were destroyed while in the case of the Felicity Age 4,000 luxurious vehicles including Porsches, Audis, and Bentleys ended up on the ocean floor. In all these cases lithium-ion batteries were cited as potentially being a contributing factor in the fire, though investigations continue. Fires caused by lithium-ion batteries pose significant dangers as they can be extremely hot, explosive, toxic, and quick to spread. They are also hard to extinguish, making them a considerable safety issue during transport. On board ships, they can lead to catastrophic outcomes with loss of goods and in worstcase scenarios human life. “Fires on vessels remain one of the biggest safety issues for the shipping industry,” Mark Barn, International Marine Claims Manager at HDI Global SE, said. “As lithium-ion batteries pose such a significant fire hazard, they have become a hot topic in the insurance industry.” An EV boom and a mobile lifestyle Due to our increasingly mobile lifestyle, the world has become reliant on these batteries. They are needed for powering many essential devices ranging from Household power storage systems, laptops, smartphones to watches plus motor vehicles plus e-bikes and e-scooters. Additionally, across diverse sectors, there is a collective push towards decarbonization and the adoption of new technologies to minimize carbon footprints. Fires onboard vessels are a major safety issue for the maritime industry. A significant rise in the number of vessel fires over the last decade is concerning for maritime safety. In this article, Mark Barn the International Marine Claims Manager at HDI Global shares how the team are watching the increasing use of highly combustible lithium-ion batteries, a “hot topic” in the insurance industry. Surge in vessel fires linked to lithium-ion batteries sparks safety concerns As lithium batteries power electric vehicles (EVs), global demand for these batteries is expected to surge more than five-fold by 2030 according to the publicprivate alliance Li-Bridge. From 2021 to 2022 alone, global electric vehicle sales increased more than 50 percent making up a total of 14 percent of all new cars sold in the world. A 2022 analysis by the McKinsey Battery Insights team predicts that the entire lithiumion battery chain, starting from mining to recycling used and damaged batteries, could increase by more than 30 percent per year from 2022 to 2030, eventually reaching a value of more than US$400 billion. Ships inadequately prepared Most of the batteries are being transported without any major problems; however, the moment the batteries are either in use, exhibit defects, or are mishandled, the potential for fire hazards looms. Lithium-ion batteries contain flammable electrolytes and have a very high energy density. This means they can overheat and cause a fire, an explosion, or something called a ‘thermal runaway’. Thermal runaway in lithium-ion batteries refers to a selfperpetuating and uncontrollable chain reaction of heat generation within the battery cells. HDInsights edition 12 | page 15
It typically starts with the overheating of a single cell due to factors like manufacturing defects, external damage, or overcharging. As one cell heats up, it can trigger neighbouring cells to heat up as well – potentially ending in a vicious cycle. According to Mr Barn, many ships lack what is necessary to deal with these risks. “Many vessels don’t have adequate fire protection nor detection and sailors are not trained well enough to fight a fire at sea particularly as vessels have increased in size and can now carry many more containers.” With Australia (next to Chile) being the largest lithium exporter in the world, local insurers like HDI Global are therefore actively preparing for an increase in claims of this type. However, they are also engaged in the battle to make the power source for our modern lifestyle safer. A representative from the International Maritime Organization (IMO), the UN's maritime agency, also revealed plans to introduce new safety standards for shipping electric vehicles in 2024. The guidelines may aim to regulate the maximum allowable charge capacity for batteries. The IMO also suggested potential mandatory measures, such as the inclusion of fire-suppressant chemicals, specialized fire-resistant blankets, the incorporation of battery-penetrating jet extinguishers, and a requirement for increased spacing between electric vehicles during maritime transport. “All stakeholders within the maritime industry have a vested interest to solve this problem,” HDI’s Mr Barn, said. “Manufactures, carriers, fire authorities, and regulators need to work together to help mitigate and over time reduce the risks as much as possible.” HDInsight Edition 10 - page 19 Contact - HDI Mark Barn International Marine Claims Manager P: +61 416 105 758 Mark.Barn@hdi.global Mark Barn International Marine Claims Manager HDI Global SE Australia “As the world grows its demand for lithium preparing for the 2030 emissions reduction targets and beyond, there's the need to have a better understanding of how lithium batteries need to be stored during transport," International safety regulation overdue Some insurers for example plead for purpose-built vessels for transporting EVs, however, it won’t be easy to regulate a global industry despite the private sector showing a clear interest in reducing the dangers the batteries potentially pose. Over the past months, the Safetytech Accelerator launched the Cargo Fire & Loss Innovation Initiative and the Cargo Incident Notification System (CINS) published Lithium-Ion Batteries in Containers Guidelines. The European Maritime Safety Agency (EMSA) presented the Cargosafe study whose objective is to identify cost-effective risk control options for cargo fires. Please contact our HDI Team with questions Surge in vessel fires linked to lithium-ion batteries sparks safety concerns Philipp Glanz Risk Engineering Manager Asia Pacific P: +61 498 016 552 Philipp.Glanz@hdi.global HDInsights edition 12 | page 16
CompletedHDI Global SEMarineCargo ClaimForm, signedby the insured’s representative Acopy of original saleor purchase invoice for thedamaged / lost items Acopy bill of lading / air /waybill / consignment note (front andback) Acopy of letter of demand sent to the carrier / shipper Photos /proof of damage Bankdetails Marine Cargo Fast Track Claims HDI Global recognise that providing a facility for our broker partners to fast track claimswill help enhance the policy holders insurance experience. Howto Fast Track a Claim MarketingDocument AnyMarineCargoclaims less thanor equal to AU$20,000areeligible tobe fast-tracked. Weaimtosettleaclaiminless than5working days Someclaimsmaybeprocessed&settledin24 to48hours, however, dependingonthe informationweneedandthecircumstances someclaimsmay take longer. marine.claims2@hdi.global Contact HDI Start here... Settlementmaybedelayedif the listed documentsarenot suppliedat thetimeof the initial claimnotification, or ifweneedmore informationtoassess theclaim. Donotmakeoracceptanysettlementoffers without first contactingHDIGlobal SE
Following the development and implementation of a focused approach in both Underwriting and Claims handling as well as streamlining products, processes, and frameworks towards the needs of mid-market clients, HDI Global now offers to them domestic and international solutions. The focus lies on simplified underwriting processes, dedicated products and an “easy to deal with” commitment to mid-market brokers. The mid-market segment comprises a wide range of industries, including, among others, services within real estate, hospitality, offices, machinery manufacturers, breweries, scientific and technical services, retail, merchandise, or consumer goods. HDI Global understands the significance of market proximity, regional personal support, and speedy services when it comes to providing suitable insurance solutions for this market segment. HDI Global has already been offering services to midmarket clients, but with recent developments, the focus has strengthened. The key regions of focus include Europe, Australia, Canada, andMexico, ensuring that clients across these areas can benefit fromHDI Global's expertise and own global network in more than 175 countries Through this, clients can rely on having one central contact point with personal local experts who possess in-depth knowledge of the markets and the respective regional mid-segment. David Hullin, Member of the HDI Global Executive Board, responsible for region Europe (without Germany), Americas, Asean, South Africa and Middle East, emphasizes HDI Global’s positioning as a Partner in Transformation for clients in the mid-market segment worldwide: HDI Global aims for mid-market segment with dedicated services and strategy HDI Global grow mid-market segment with dedicated services and strategy Industrial Insurer HDI Global is committed to serving the mid-market segment with a dedicated underwriting and claims approach in both Liability and Property complementing other lines of business. Known for a long-term partnership approach to large industrial clients worldwide, HDI Global is expanding its services to cater to clients with a turnover between EUR 20 million and EUR 500 million, providing bespoke solutions to suit the unique needs within that segment. “As our reputation for underwriting excellence and client centricity is built on the commitment to quick responses, reliable services, and worldwide compliance, our aiming for mid-market partnerships comes as a natural in times of accelerated transformation for many companies.” Dr Mukadder Erdönmez Member of the HDI Global SE Executive Board, responsible for Third-party Liability, Cyber Insurance and Motor "We take pride in offering our current and potential future partners over 120 years of expertise in risk mitigation. Our approach is to offer Insurance made by Entrepreneurs – for Entrepreneurs: Paired with stable underwriting, local expertise on-site and long-term commitment in our partnerships, our clients profit from quality products and quick service solutions globally. With the strategic focus and necessary internal processes firmly in place, our partners within the mid-market segment can focus on their core business and entrepreneurial opportunities instead of the risks that come along the way." David Hullen Member of the HDI Global Executive Board Please contact our HDI Team with questions HDInsights edition 12 | page 18
“A lot is going on in the world in 2024,” says Chris McDowell, HDI Underwriting Manager Accident & Health Australasia in a recent online seminar on Geopolitical Risk and Travel in 2024. With a record number of elections around the world, ongoing conflicts, violent unrest and weather extremes - there are a number of trends for travelers to be aware of this year that HDI emergency assistance can support. HDI Global is four years into its successful expansion into Accident & Health (A&H) cover for corporate clients in Australia and across the region. Today, travel and expat insurance products for corporate and midmarket clients in the Asia Pacific remain a core focus for the HDI A&H team. “We strongly believe that access to 24/7 premium emergency assistance in particular has never been more important,” says Mr McDowell. “HDI provide comprehensive travel risk cover connected to policy and through our partners and technology, support what we believe is a premium and proactive, emergency assistance service.” “Understanding, being able to mitigate and manage a risk has always been part of our approach and our discussions with clients. Securing before insuring has been our motivation for decades,” agrees Christoph Schulz who oversees the global portfolio from the Hannover home office as Head of Accident and Health at HDI Group. Established in 1903, HDI has a long history and Mr Schulz describes the journey evolving corporate travel products in response to clients in the online seminar. “It's always a partnership that we feel when we deal with clients and this is actually what shapes our approach until the present day. ” The current A&H products are responsive to clients who send out their staff to worldwide destinations and need to ensure their safety and security says Mr Schulz; “The clients said: ‘If we could have something like a one-stop shop, an insurance solution that incorporates all the services that we need to manage travel, the security of our employees, and has all the assistance benefits as well, from the pre-trip information to highly sophisticated monitoring, alerting and so on, this could be a real game changer. So, we decided: Let's go for it.” HDI now offers corporate travel insurance through its network of 175 countries and International Programmes service to support clients wherever their staff travel. The products are always based on the regional specifications and supported by a wide range of highly specialised service providers for medical and security cases. “The companies we work with of course, need to be best in class in every country that we start doing business in travel insurance, but also need to have an understanding of a customer journey that fit our approach,” says Mr Schulz. Currently, this expansion is focusing on the Asia Pacific region with other markets to follow such as Canada and Dubai says Mr Schulz. “Australia started doing business very, very successfully - of course partnering with organisations such as PACE First. This is a story we want to develop even further in every market we approach. This is actually what we are up for, and very proud of.” HDInsight LIVE Webinar Geopolitical Risk and Travel in 2024 HDInsights edition 12 | page 19
HDI Global Australia A&H solutions for emergency travel assistance: HDI Global Assist with crisis response management expert partners Australasian Assistance and PACE First. This means 24/7 global emergency medical, travel, safety, and security assistance services. Additionally, HDI also has agreements in place with alternate Emergency Assistance providers and Third-Party Claims Administrators if a client has a preferred choice. HDI Guardian App an additional support product linked to the policy and designed with expert crisis response partners to manage safety, security, and travel risks for clients. Expert partners in emergency response Introducing HDI crisis response partner and long-time colleague Mr McDowell says; “Shaun Filer CEO PACE First and his team are some of the most experienced in their field, certainly within this region if not globally, with more than two decades of experience in the international emergency assistance space, supporting clients, across approximately one hundred countries. And I must note that of those two decades, I've personally worked with Shaun for around 15 years on a significant number of serious events with positive outcomes. So, this certainly gives us confidence when we provide these products that need emergency assistance that clients are in good hands”. What to expect for 2024 Investigating the risks and developing geopolitical trends, guest speaker Shaun Filer CEO PACE First explains why 2024 is a challenging year for travel - and how the HDI Global Assist and HDI Guardian App, an Accident & Health emergency response solution can help mitigate risks and keep clients safe. HDInsight Edition 10 - page 21 HDInsight LIVE: Geopolitical Risk and Travel Political developments “If you've been following the media, you know that this is a big election year”, Mr Filer said. “In fact, it is the biggest global election year in human history.” 64 countries are holding national elections that could see approximately half the world's population take to the polls to cast their vote. Taiwan and Indonesia have voted already, and the biggest election of the year is of course the US. “Many experts say that the results we see this year will indicate the health and the trajectory of democracy.” Some are even saying this is a point in history where democracy versus autocracy is either resolved or “we get a decent pulse check on it,” says Mr Filer. Potential for violence and unrest Leading up to the November election in the US, even after the election results are tallied, Mr Filer warns there is potential for violence. “We're already having discussions with organizations, people that expect to be in those places, especially media organisations,” he said. “We are looking at helping their people, looking after them when they're at rallies or if there are escalations like unrest.” Corporate Travel Insurance and Services – A one-stop shop “With HDI Assist policy when connected with the HDI Guardian App is a premium emergency assistance service that is proactive rather than just reactive,” says McDowell. Talk to us today about how HDI Assist policies can support your employees as they travel. Experts in Emergency Response HDI Assist emergency response partner PACE First CEO Shaun Filer has worked in the field of international risk management, disaster response crisis and emergency management, as well as close protection consulting for about 20 years. He is regularly deployed as a trusted advisor and emergency team leader during international crises. He has recent experience on high profile cases, including the Ukrainian, Syrian, Iraqi, Libyan, Afghan, Southern Philippine 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. HDInsights edition 12 | page 20
Wars and widening conflicts 2024 began with widening and intensifying conflicts on several fronts: Ukraine, Gaza, and Sudan are the main hot spots. “Unfortunately, more and more leaders are pursuing their goals through military action,” says Mr Filer. His company therefore doesn’t see any indication that peace or peace talks could occur in any of these regions. “We put this in the unlikely category this year,” he said. Since the 1990s the world has enjoyed a reduction in the number of ongoing conflicts globally. “We got down to about a 100 ongoing conflicts recorded each year until 2012, and then it shot up to 150,” Mr Filer said. “What we're seeing now across many of these conflicts, whether we're talking about Russia and Ukraine or Israel and Hamas or the war in Sudan, is that the biggest barrier to peace is that a lot of these adversaries don't seem to share any mutual understanding of what they're fighting over.” Russia has essentially become a rogue state, he warned. “Assets have been frozen, and we have seen 12 rounds of sanctions.” The country has been cut off from most diplomatic events which means that they rally around a few groups like Iran and North Korea and work with those other states to undermine international stability. Food security Food exports are also becoming an increasingly important topic for countries dependent on food exports. “There is not a lot of excess food that is exported. The best years still see less than about 8 percent of the food that's produced globally available for export to those places that desperately need it.” As Ukraine and Russia are among the top food-producing regions the prolonged conflict has had negative effects for many more countries. Extreme weather events The frequency and intensity of extreme weather and crises where climate change is the catalyst are anticipated to continue increasing. Such crises could be reflected in food price indices or food price manipulations – aspects that can lead to food insecurity and eventually major conflicts. HDInsight Edition 10 - page 21 The weather systems can also escalate quickly and above expectations, sometimes developing from a low category into a category five in rapid time, he explains. “So, we're seeing a lot of cases where insured travelers are being caught off guard whereas if they had the information at their fingertips, they probably would've fully avoided this.” AI – It’s here to stay “I think that there's a lot of benefits from the technology but there are also a lot of opportunities for bad actors to use tech to spread disinformation and misinformation and it’s already happening,” says Mr Filer. He points to the next generation of AI that will go live this year and provide more opportunities for misuse as well. “It'll turbocharge and the difference between a level four or five on some of those AI generation models is like night and day.” He warns that there's currently no way of regulating or keeping AI out of the hands of malicious groups or malicious actors. Emergency Travel Response Tracking these geopolitical and travel safety risks is key to the success of HDI Global Assist - a 24/7 global emergency medical, travel, safety and security assistance service - provided in partnership with crisis response management experts PACE First and Australasian Assistance. HDInsight LIVE: Geopolitical Risk and Travel “During a category five hurricane in Mexico, we had groups that were proactively reaching out to us. We were able to get them out via road in secure transport back up to Mexico City. For others that stayed in damaged venues, we had to get security up and send armored security teams to go into that area because of concerns and additional risks brought in by diminished law and order in the region. This became a lot more complex and a lot more expensive.” Shaun Filer CEO PACE First HDInsights edition 12 | page 21
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