Risks know no borders – and nor do we

Military conflicts in Europe, a global pandemic, surging inflation and the United Kingdom mourns the passing of a head of state after many decades. That, in a nutshell, sums up the circumstances in which HDI was founded during the early years of the twentieth century. History does not repeat itself, but it frequently throws up remarkable parallels.

HDI was created in 1903 by industry for industry. Almost 120 years after the company's founding we define our purpose as: Together we take care of the unexpected and foster entrepreneurship. Today, with this goal in mind, the customers served by HDI Global SE include some 90% of DAX-listed companies – and our support spans the globe. Pandemics, supply chains and natural disasters do not stop at national borders – and nor do we. We are there, wherever our customers take on risks.

When damage happens on the other side of the world, German companies often find that their production is also impacted. Dependencies in global supply chains are a natural side-effect of globalisation. We cushion the losses and facilitate a rapid return to normal operations. During the Covid-19 pandemic we covered vaccine studies and had our customers' backs as a reliable partner when business interruptions were occurring all around the globe. Only recently, a hurricane such as Ian highlighted how the forces of nature have the potential to affect the interconnected economy if they destroy the production facilities of our customers or their suppliers.

Despite the historical parallels, many of these risks did not exist in the era when HDI was established: international supply chains, container vessels up to 400 metres in length, cyber risks and natural catastrophes which are increasing exponentially. Over the past 40 years the number of relevant insured events connected with "NatCat" has tripled.

When it comes to transnational business relationships and perils that know no borders, we have to respond dynamically and keep on continuously evolving. Starting in the 1970s HDI has progressively expanded into markets including Brazil, the United States, France, Argentina and the United Kingdom. In the early 2000s these were followed by Central and Eastern Europe, then South America and now the focus is increasingly turning to Asia.

Currently, we are represented by our own entities in 39 countries and we offer our customers insurance solutions in more than 175 countries through a global network. These days, Talanx AG generates more than half of its premiums outside Germany. With international business accounting for just 12.6% of gross premiums in 2000, this has been a true growth story. HDI Global alone tripled its gross premium income from foreign markets in the 2010s.

Global ambitions call for a dynamic team of some 4,500 people that make up HDI Global. They work on five continents for industrial clients with worldwide operations. We offer them tailor-made insurance solutions for machinery, property, engineering, supply chains, financing arrangements and employees – because this is the very life blood of our economy. No plane would leave the ground, no train would leave the station if their operators did not have reliable risk protection. Scarcely anyone would dare to pursue innovations. As an industrial insurer, then, our role is to make things possible, to enable the economy.

In this role we also support the great transformations of our era – which boil down to climate change more often than not. At our headquarter in Hannover we have already been operating with a net zero carbon footprint since 2019, and we want to expand this to all locations worldwide by the year 2030. We are supporting industry's progress along the same path and were one of the first to insure solar and offshore wind farms. We do not provide coverage for any planned new coal-fired power plants and we adhere to ESG (environmental, social and governance) criteria in our investment activities and in our relationships with new customers.

Yet it would only slow the entire process if we were to entirely withdraw from traditional industries. Instead, we insure customers on their journey through the energy transition. The use of hydrogen, for example, poses new risks that our experts evaluate in close cooperation with customers and reduce to an insurable level.

Without state-of-the-art industrial insurance there can be no green transformation. That is why we must continuously expand our expertise, even though our mission remains just as it was almost 120 years ago: we are the oil that lubricates the economy. Or, in keeping with the transition in energy policy: we are the wind in the sails of the global economy. The employees of HDI Global not only provide protection against risks, but also for entrepreneurship in tackling today's challenges.

It is pleasing to observe that the frequency of losses incurred by our customers is decreasing, because we bring interdisciplinary expertise to bear as we work together on preventing rather than just managing claims. Nevertheless, customers who suffer losses less often must understand that this is not a reason to scale back their insurance coverage. We are seeing that (very) large losses are rising in number because risks without borders are still a comparatively new phenomenon. Flooded factories standing idle, disrupted supply chains and lockdowns have been an eye-opener for many customers – and when it comes to cyber risks our assessment is that there is still a lot of catching up to do.

As we engage in this demanding risk dialogue with our customers, we need two pillars of world-class calibre in order to maintain the status of Talanx and HDI: the best data pool and the best people. Changing perils, risk exposures, regional differences on the policy level, the requirements of our customers and the competition among them – these are all things that our teams have to keep front of mind before they design individual solutions. Just as an example, the support we provide for liability programmes of our customers with worldwide locations necessarily has to come from different experts in multiple geographies.

In view of this complexity and global dimension, our employees have the opportunity to benefit from lifelong learning – as they support, insure, transform and, quite simply, drive the international economy. The people at HDI Global work around the world in underwriting, claims management, software development, accounting and other fields. They have trained in engineering, law, economics or humanities, on ships, in the mining industry, at universities or schools for master craftspeople. That is why we like to refer to ourselves as the "House of the Hundred Professions".

Diversity attracts top talents in search of meaningful employment. Building on a foundation of mutual trust, they create a culture of collaboration, transparency, and engagement at our company. Mixed teams work with an open mindset in modern offices or remotely on the rapidly evolving challenges facing industry around the world. Their combined know-how does not stop at national borders – and is what sets us apart as an industrial insurer.

When HDI was honoured with the title "Brand of the Century" at the end of last year, I felt much pride: in our history and in everyone who works for us. Yet given our desire to expand our status as enabler of the economy to the worldwide arena, resting on our laurels was not an option. Just as we have been in the past 120 years or so, we must always be more dynamic than the risks against which we insure our partners. The world needs evolving industrial insurers to enable entrepreneurship and protect innovation.

New technologies, global structures and climate challenges will continue to show wide variation – a stroke of luck in the eyes of those who work for us. At HDI Global and Talanx, with our worldwide expertise and our DNA rooted in entrepreneurship, we see risks that know no borders as an incentive. This is exactly what our partners value, and they generally reward us with their enduring trust – which not only leaves us grateful but also powers us forward.