Cyber-attack – the heart attack of the companies

Cyber-attack – the heart attack of the companies

From a cyber perspective, there are only two types of companies: Those that have been hacked and those that will be hacked.

When an agricultural producer gets hit by a ransomware attack, it comes close to collapsing its business. The last two years of our lives will forever be marked as the years hardest hit by the global pandemic COVID-19. But this period has also brought us other threats, namely the digital pandemic in the form of the rise of Ransomware cyber-attacks.

What is Ransomware?

It was an ordinary morning for the agricultural company which is one of the main dairy products producers in the region. The director of the company arrived, as usual, sometime before the workers came to the factory, turned on his business laptop and noticed a disturbing message: “You are under a ransomware attack, please follow the link for further steps.”

Ransomware is a type of malicious software or encryption program, placed by a hacker, that works by encrypting data on a network. To regain access to the data, it asks you to pay a ransom in exchange for a decryption key. Some researchers (Coveware) show that a minority of companies that choose the ransom payment route, end up being forced to make additional payments or never getting access to their data.

Ransomware attacks have been one of the most common threats in the last couple of years. Business interruption periods increased from an average of 15 days (2020), now to an average of 23 days (2021). It should be also noted that the business interruption costs sometimes are as high as the ransom payment, or even exceed the amount. IBM’s 2020 Cost of Data Breach Report shows us that it took around 280 days to even identify a breach in a system, which gives us an insight into the ability and power of hackers to move stealthily and silently through a victim’s system.

Cognyte company, the security analytics agency, claims that the Manufacturing and Financial Services industries are the leading targets of ransomware hit, followed by the Transportation, Technology, Legal and Human Resources industries. Some examples are:

  • In 2016, Delta Airlines faced a major network outage that lasted for five hours and cost the company 150 million USD.
  • In October 2016, there was a DDoS attack on Dyn, a company that administers a major element of the web, that took down widely used websites such as PayPal, Twitter, Netflix, Amazon, and others.
  • In 2017, Maersk, a Danish shipping company, faced a cyber-attack that disrupted operations for two weeks, resulting in a loss of about 300 million USD.

Weak point RDP

According to the UK security company Sophos, one of the most distinguished ways is the widespread use of Remote Desktop Protocol (RDP). RDP is a system which allows remote users to connect to the desktop of another computer via a network connection. Usually, it is used by organizations to allow employees to gain access to their networks while they are working remotely. If the port, that an organization uses for RDP access, is exposed directly to the internet, it is easy for malicious actors to find it, and they then attempt to gain access to an organization’s computer systems.

After the hackers gain access to the system, the next step is to break into the organization´s local administrator account. This means that the attackers are using a computer program trying to crack the passwords by trying various password combinations in quick series. The longer and more complex password, the more difficult the job will be for hackers to crack the system. Unfortunately, in our case, the local administrator´s account had a weak password combination. Additionally, the absence of Multi-factor authentication (MFA) for RDP access, allowed the hacker to gain access to the organization’s network without having to go through a second verification procedure, such as entering a verification code.

The production was blocked and unfortunately, the company did not have an offline backup stored on external storage that could be used to restore them. After the activation of the business incident plan and connection with the external incident response team, the company decided that a ransom will be paid. After the payment and receiving the decryption key, recovery was started. As the whole process was time-consuming, it took around 14 days for the system to get fully recovered.

The benefits of cyber insurance against a cyber-attack

Due to having a cyber insurance policy, the company was able to carry out the whole process of recovery of data and ransom payments with highly skilled IT professionals. The costs which were covered under this cyber-attack were, above mentioned ransom payment, business interruption losses, business incident response, forensic investigation costs, crisis PR, privacy liability, and compliance with the data protection regulatory bodies (GDPR) under the law regulated time.

Some important statistics (Indusface):

  • Organizations saw a record 225% increase in losses from ransomware attacks in 2020;
  • 53% of attacked businesses stated that their brand and reputation were damaged after a successful attack;
  • Around 26% of enterprises had to shut down operations permanently because of a ransomware attack.

If you are interested in the possible insurance offers and the level of vulnerability of your company to cyber threats, contact us and a team of our specialists will provide you with all necessary information about the further steps.

Related Insights

War in Ukraine and Cyber Insurance

Since the start of the war in Ukraine, fears of cyber-attacks due to parallel hybrid war are increasing. In this article we explain how the insurance industry is reacting and how the war clause affects conditions.

Read more …

Bogdan Santovac

Bogdan Santovac

Liability & Financial Lines Specialist

T +420 778 521 276

‘Our only focus is on our client’s and people’s needs’


Ante Banovac, a member of our Executive Board, shares his thoughts about future risks facing the insurance industry, the state of the insurance market in Serbia, Slovenia and Croatia and the role that risk specialists have in a world full of increasing risks. The interview was originally published in the Svet osiguranja, an insurance specialized publication issued in Croatia, Serbia and Slovenia. 


Insurance today is facing a number of challenges posed by the risks of the new age that are constantly increasing. What are the biggest risks today that companies should pay attention to as insurance brokers?
At GrECo we see four mega trends and their consequences as the main risk changers driving a fundamental transformation of our client’s risk landscape. These are the challenging development of our environment, leading to climate risks such as an increasing impact of natural hazards as a result of climate change, but also the reaction of the global industry adapting their business models to reach their sustainability targets. Furthermore, the digital transition leads to great opportunities for innovation with the result, that corporate assets and therefore the risk landscape of a company nowadays is increasingly affected by intangible risks such as cyber or reputational risks.

Another area that keeps our clients busy is the limitations which are arising from our globalized economy. The global pandemic and the current war in Ukraine lead to dramatic impacts on supply chains impacting prices and therefore also endangering our level of welfare. Finally, all industries are more and more struggling with the enormous lack of skilled labour, and this leads to a war for talents and changes in the labour market where employees are more and more dictating the rules.
And what do you see as the biggest challenge for insurers in responding to those risks that companies and citizens face? Are there risks that are in danger of exceeding the capacity of re (insurers), which have been insurable so far? (The issue of cyber risk, supply chain disruption due to the pandemic, and also due to other risks is mentioned …)
The situation for insurers is not easy. The new risks are challenging them and are very difficult to calculate, leading to a rather cautious approach with respect to coverage and limits. For example, capacities in the cyber insurance market are currently very scarce and insurers and reinsurers cannot provide sufficient balance sheet protection for our large corporate clients, where insurance should traditionally be the last line of defence in a corporate risk management strategy.

Another example of their difficult situation is the need to contribute to a carbon-free future. Companies must change their processes and sometimes even business models in order to fulfil their new sustainability targets over time. These measures lead to new risks. To react to those necessities insurers are looking into their ESG agenda and for example blacklisting carbon-heavy industries such as coal, because they must. At the same time, proper solutions helping this industry to manage the challenges of transformation in front of them are somewhat disregarded.  

Serbia is generally the least developed when it comes to insurance compared to Croatia and Slovenia. What do you think could and should be better? In which segments should changes be made?
I think the key components in a long process are financial education for younger generations and stable, strong and reliable domestic insurance markets together with a growing overall economy. You see, how insurance is perceived in the mind of citizens is strongly influenced by claims experiences made in the past and the reliability of institutions in general. Changing perception to the positive requires time. Serbia has some very good insurers today. Jointly, constant efforts need to be made to educate insurance takers, both private and corporate, to keep conducting image campaigns and convincing through professional and transparent claims handling. GrECo is a corporate specialist broker. We have been pioneers in developing risk awareness and understanding of insurance as one possible tool for risk mitigation in Central- and Southeast Europe for more than 30 years. Together with our insurer partners, we are continuing to contribute to this development every day.
What type of insurance do you think has a better chance of developing in Serbia, and is not sufficiently represented now?
Next to the classical and established coverages like Property damage and motor insurance lines, we see a rapidly growing need for Health & Benefits solutions. This is mostly connected to the already mentioned war for talent and skilled labour as companies are looking for ways of attracting and retaining employees. Another area which from our point of view is not yet developed enough is all lines of liability including specialty casualty lines. Those require specialist knowledge and proper consultancy, so clients would see their huge benefit. Increasing awareness of liability risks would also contribute to the overall development of the acceptance of risk consulting and advisory in Serbia.

When we talk about the activities of insurance brokers, can you compare these three markets in which you are present? What is the situation, where it is most developed, who uses your services the most in terms of the industry that is most represented in your portfolios?
In all three markets, I’d say that most registered insurance brokers are acting as generalists, offering services in all insurance lines, mostly collecting offers from the insurance market and focusing on product and price comparison, leaving claims handling completely to insurers. Those are competing with insurers and their agents directly, especially in the retail segment, servicing private individuals. A few brokers take it one step further and are also assisting clients with knowledge and expertise during claims handling, but still being generalists. Very few brokers are offering true risk management and specialty advisory with innovative solutions to improve a company’s corporate risk management. Being a strictly corporate & specialty broker, we belong to the latter group and we believe this is where true value is created for corporates. To do this in Slovenia, Croatia and Serbia you need patience in explaining the difference between a pure product comparison and price-driven approach on the one hand side and highly skilled, often very specialized teams on the other.

We are not insurance dealers, but risk advisors. Major industries we specialize in and we are advising are financial institutions, construction, Oil & gas, Power generation and distribution, Food & beverage, Tourism, Transportation & Logistics, Aviation, and Telecommunication. The need for professional risk advisory has developed and grown over the years and we believe it will continue to grow as economies in all three countries continue to grow over the longer term. Recently, the fragility of global supply chains became apparent due to the pandemic. We expect to see certain effects of nearshoring in the future. Countries like Slovenia, Croatia and Serbia have the chance to benefit from this development.

Insurers have recently faced major flood damage, but on the other hand, most assets are still uninsured against such risks. Only 35 per cent of economically relevant climate losses are currently insured in the EU. How to bridge that gap? Will insurance become more expensive precisely because of the growing climate risks?
Climate change represents one of the most critical challenges in the future in general and for insurance companies as Nat Cat risks are clearly on the rise. Because of a rapidly changing exposure arising from climate risks, there are limits to insurability and economic affordability of insurance covers for corporations. Current risk transfer strategies, relying on traditional insurance solutions alone, without adapting their facilities to these changes, will not bridge the gap. While insurers and risk consultants like us are constantly developing new, innovative concepts of coverage, corporations who have not yet done so will still need to think about Nat Cat Management – meaning analysing and understanding their risks properly, then managing, i.e., mitigating those risks technically. In the longer run, we believe those whole industries will have to transform their business models, factories, and supply chains to increase their resilience and adapt to climate change. Therefore, also our business models are transforming as we are increasingly becoming risk specialists helping our clients to thrive in a changing world.

Although insurance companies have shown great resilience in volatile times over the past two years, how will the current geopolitical instability still affect the work of insurers? And in what way? How much do you think all this geopolitical tension will disrupt general stability, the economy, and finances in 2022 when it comes to this region (Adriatic)?
The insurance industry is one of the most resilient industries and will continue to be one. The consequences of geopolitical instability in the insurance sector that we have seen so far relate to the revocation of coverage of international insurance programmes in Russia because of imposed sanctions, but also in Ukraine. Further, after many years of ultra-loose interest policies of the European Central Bank, inflation has now manifested itself in Europe while economies are not really growing significantly. We are looking at stagflation. Inflation will for instance lead to higher unpredictability of losses as higher replacement costs can be expected, but it is difficult to predict upfront how much higher. The ongoing instability of supply chains also affects replacement times, adding another element of uncertainty. So, predominantly the work of insurers, but especially professional risk advisors and brokers is affected in the way that an even higher level of diligence needs to be applied when consulting clients to safeguard them from such significant, unexpected losses. The ones best technically skilled and prepared to provide professional risk management and advisory will even benefit.

When it comes to the Adriatic region, I believe the same principle of increased diligence applies. It is difficult to say how current geopolitical tensions will translate to this region during the rest of the year and look further ahead, but I hope that we will see a general trend of de-escalation. Economic interdependencies between nations are significant and it is hard to imagine that further escalation would do any good, economically and also from a civil and social perspective for the people in the region.

However, challenging times have always also been phases of opportunity to than in calmer times innovate, adapt and improve. I am very happy to see that corporations, including insurers, became more agile, by showing efforts towards necessary transformation and adaption to this constant crisis. The insurance industry is, thankfully, wide awake and moving ahead.
Although the Croatian insurance sector has so far proved to be relatively stable during the corona crisis, could the effect of the crisis on insurance companies occur with a certain time lag?
That depends on whether we will see new, again significantly more dangerous variants of the virus or not. If yes, it is fair to assume that protective measures like further lockdowns will fuel the current stagflation and make another serious dent in the Croatian economy. This may then also influence the results of insurers. If not, I’m quite positive that such a scenario will not occur.
How should risk monitoring be approached in these unstable times (pandemic, war, disturbed international relations, pronounced climate change)?

As I stated already in the beginning, from my point of view it is most important to include a proper risk prognosis within a company´s risk management process. This means, that forward-looking companies adapt early to uncertainty by constantly applying methods for assessing their business model and their supply chains, checking vulnerabilities and potential impacts. The risk management department must be aware of these changes at the earliest possible stage, to anticipate the possible impact on their specific risk landscape and develop appropriate treatment strategies. Therefore, it is now more than ever of utmost importance that risk advisors and insurers are finally much more included in the clients’ strategic planning. We are increasingly rendering such services and we see more and more clients understanding and appreciating this. This is a good trend.

Croatia is intensively preparing for the introduction of the euro, on January 1, 2023? How will this affect the insurance industry?
Yes, after a long process of preparation and fulfilment of EU requirements Croatia will be taking this major step, which I personally welcome. In the best scenario, this will contribute to increasing foreign investment which in turn could create additional value and increase the total amount of economic assets in Croatia, leading to increased demand for insurance. The pure change from HRK to EUR itself will have no major impact on insurers. In fact, the HRK has been linked to the EUR for decades now. Many major economic transactions in the country have effectively been executed in EUR. It remains to be seen whether insurers will try to use the currency change for (unjustified) price increases. However, the insurance industry is a competitive market with sufficient choices for clients, so I believe this risk shouldn’t be too pronounced.

Croatia has a relatively developed insurance market. Where is insurance in Croatia most developed in comparison to the region? Where does the market in Croatia still need to catch up with the more developed countries in Europe?
Interesting question. Yes, I would agree that Croatia’s insurance market is generally relatively well developed when comparing it to other economies in the region, but there is not a huge difference. In fact, in the Adriatic region, the Slovenian market seems to be the most advanced. This is also reflected in the per-capita expenditure for insurance in general which is highest in Slovenia. In general, we see well-established Lines of Business and really good products, especially in Property and Business Interruption, of course, motor insurance, but also general liability coverages and to a certain extent in Health & Benefits across the region.

Unfortunately, and this is the major difference to more mature western economies, the focus for many companies seems to still rather be on basic protection of assets, based on a Casco mentality translating into possibly no or low deductibles. This shows that understanding of risk- and insurance management is still on a level which offers potential for improvement. This is where we need to catch up. However, this is changing for the better. The understanding of benefits and the value of professional risk management is increasing among Croatian corporations and in fact, there are some very mature companies in this respect we service in already for many years. Those companies are blazing the trail for others and the number will increase.

We observe that the understanding of risk and risk management today correlates with the size of the business rather than with any specific country in the region. The more mid-sized companies learn how to analyse and calculate all their business risks – hence, knowing their total cost of risk (TCOR), the more we will see purchasing behaviour moving closer to more developed western European insurance takers. At GrECo, we are passionate about helping companies increase their awareness of a holistic approach to risk.

GrECo recently acquired MAI CEE. What exactly will that acquisition bring you?
We like to see this transaction rather as joining forces than an acquisition. This is a strategic investment into a joint future. Unlike private equity or other financial investors, our shareholders are thinking long-term and our full focus is on servicing our clients, being a trusted and loyal partner to them offering first-class specialist solutions. After thirty years of dedicated work, GrECo is the leading independent insurance broker & risk advisor in Central Eastern and South Eastern Europe today. This region is what we call our home territory. We are constantly striving to improve and strengthen our leading position by offering talented people from the region a superb platform to develop and grow. MAI is also an independent broker, traditionally rooted in CEE and SEE, just like us.

Also, MAI is home to many incredibly talented and motivated people. I know this first-hand, as I have been deeply involved in making this transaction happen. Together we will be expanding and improving the portfolio of our professional services for our clients. MAI brings, among many other things, superb expertise in servicing international business, first-class international network affiliations and strong Health & Benefits and HR advisory into the Group. We are proud that MAI has chosen to shape the future of risk advisory in Eastern Europe together with us.

Until recently, you were at the helm of GrECo nova, an international network of brokers. Who is gathered in that network and what is its basic role?
GrECo nova is is our global specialist insurance broking network which provides our clients with decisive benefits in all their global ventures. What we do here is ensure GrECo’s quality of service for our multinational clients worldwide. We are having a wide range of long-standing partnerships with other leading independent international brokers in their parts of the world. Under our network GrECo nova, we foster active collaboration of insurance experts who are sharing our culture and values. As the international broker landscape is dynamic, we work with them on a non-exclusive basis, constantly monitoring the quality of services via a sophisticated process. We go the extra mile and have a team that is travelling extensively meeting partners in person around the globe. This way we build trust beyond the usual level and our clients can feel this in the international servicing we put together for them every day.

How much can a broker actually contribute to a company in terms of choosing the right policy and achieving the best price?
The broker is the client’s advocate and expert. He represents the client in front of the insurance market. If the client understands the value of a broker, then the broker is selected carefully, maybe in a broker tender, and appointed exclusively. The broker speaks thoroughly with the client in the analysis phase, gaining a full understanding of all aspects of the risks the client is facing and forming a risk mitigation strategy. Then, the professional broker and risk advisor – not only the insurance dealer as described previously – can engage in a serious process of what we call marketing the risk, or broking. He can approach all insurers, locally and if needed internationally, making it clear that he is appointed exclusively, and the negotiation is about the best possible terms for the risk coverage at the best possible price for his client. This very often means designing the coverage instead of selecting an existing insurance product. The outcome for the client in such cooperation is usually very good. The value of the cooperation between client and broker is then periodically assessed, say once a year, or every three years.

This still happens too rarely in South-eastern Europe, unfortunately. What we often see is that companies appoint multiple brokers, very often not engaging in a risk dialogue before. They think the more brokers they appoint, the better the result will be because there is a higher probability that someone will bring the best price to them. However, the opposite is the case. This is very important to understand: when multiple brokers are appointed, then the brokers who are supposed to be the clients’ advocates and experts are having a difficult task. All those brokers go to the different available insurers. The insurers then have the difficulty of not knowing which broker will be the one whose offer will be selected by the client and hence, usually settle on one offer and send it to all the brokers to maintain fair competition. A deeper conversation about the risk between broker and insurer is often neglected and the risk is not marketed in the best way. The outcome is that, while the offer may be cheaper, it may often also be lacking fundamental aspects of coverage and is hence not the best possible solution for the client. Although not in anyone’s interest, the broker in this case in effect becomes an agent of the insurers, an insurance product dealer. This can seriously harm the client in case of a major claim when the client then finds out what he has bought.

So, the right broker, appointed exclusively, can bring enormous value to the client when engaging in a risk dialogue first, setting the right risk mitigation and insurance strategy, before approaching insurance markets. Then, marketing the risk as the exclusively appointed broker can make all the difference.

GrECo is a family business, does it give it any advantages over other brokers that are mostly owned by funds?
I believe yes. At first sight, it might seem that for a client it does not matter who is the owner of a broker. But, what does matter is the people performing services for the client. Now, there is a saying that when you care about your people then they will take care of your clients with all their hearts. I believe this to be true and we are offering a lot to our teams.

The first is stability. GrECo has a long tradition of sticking closely to its people, especially during difficult times and providing them with a very stable business environment. For example, during the pandemic, there were no layoffs and no salary cuts at GrECo.

Second, continuity at the management level. We are a hands-on, flat organisation and management is very much approachable to everybody, decisions can be made quickly and without complicated processes. Also, management is carefully selected, and there for the long-term. There is no hire-and-fire mentality. This helps us to set a strategy, pursue it and establish much deeper trust with our people. In our daily work, we don’t need to focus on some financial investors’ or stock market analysts’ expectations. Our only focus is on our client’s and people’s needs. We believe that this is more attractive to skilled employees and talented young people than working for PE-backed brokers who are strongly EBIT-focused and interested to resell the company after a determined period. While we are a very successful company, those owners are in the investment banking business, not in the corporate insurance broking business. We are. And people, as well as our clients, can feel this.

You recently became a member of the Executive Board of GrECo Holding. Where did you come from in insurance and among insurance brokers, how did your career develop and what do you think brought you to that high position?
Yes. And I am very grateful that our supervisory board and our shareholders are placing so much trust in me. I started my career in 1997 in Germany as an apprentice, working for one of the major German insurers. I went through all departments from property-, motor-, liability-, and health- to life insurance and claims and enjoyed a very good, classical insurance education. I went into sales and client servicing after this and learned what it means to understand and satisfy clients’ needs while running my own brokerage company. During this time, I also studied insurance management and economics in Munich and attained my bachelor’s degree. I continued my professional education at the Chartered Insurance Institute in London and became a Fellow of the CII. Finally, I completed my studies with an MBA in General Management in the UK. I joined GrECo in 2014 and had the chance to contribute to our Group’s international development, always putting people first, working hard and (hopefully) smart. I guess when you love what you do this is visible to others and can be inspiring.

Related Insights

How bad was drought this year in your region and how much insurance would help to protect against losses?

How dry has it been this year in your region and how much insurance would help to protect against losses?

How dry has it been this year in your region and how much insurance would help to protect against losses? Our GrECo Soil Moisture Deficit Monitor can provide the answer about 10 850 locations in Central and Eastern Europe!

2022 breaks all records in some parts of Europe, being one of the driest and hottest years! The dynamics of soil moisture in dry 2022 compared to 2021 can be clearly seen in the video below.

The browner the area in the chart above remains for a significant time (more than 30 days), the more hostile the drought is.

Drought negative outcomes

Such a big drought leads to many negative consequences in many industries, especially in agriculture, energy, logistics, and forestry. For example:

  • Expected decrease of corn yield in Hungary (30% more)
  • Massive livestock death in Italy;
  • Big shortage of water in the UK, France, Spain and Portugal;
  • Hydropower generation, which relies on water to produce electricity, has fallen by 44% in Spain, and 20% overall; 
  • Some nuclear plants in France have had to reduce output as the rivers have been too low and warm to cool the plants;
  • River Rhine’s water level fell so much that shipping was affected;
  • Low water levels in the Danube River exposed the wrecks of dozens of German warships, sunk in late 1944 to block passage to the Soviets;
  • In 2022 as of today, there is 735 000 ha of burnt forest in EU countries or currently under fire, which is already 2.3 times more comparing the annual average for 2006-2021! How much Europe is burning at the moment you can see in the charts below.
Fire danger forecast
Percentage of burned areas

Why is drought on the rise?

This is believed to be the result of a global warming trend that is due to intense human activity, especially in the last 50 years. We witness the increase in greenhouse gas in the atmosphere (more than 30% compared to the 1950s) and deforestation for agriculture (40% of forests were lost). It led to the shift in the average temperature by 1°C compared to the pre-industrial era, and thus resulted in large changes in the weather produced by ocean streams. This is evidenced by more extreme temperatures, heat waves, higher wind speeds, more hail, and uneven distribution throughout the season leading to no rain when plants need it or, vice versa, heavy destructive rains and floods.

How to quantify the severity of a drought event?

To quantify and visualize it, we use soil moisture data set from ‘ERA5 hourly data at single levels from 1959 to present’, provided by the European Space Agency. The data is stored in 25 x 25 km grids as in the picture below.

Soil moisture data set

We have developed a monitor tool that clients can use to get calculations from us by sending individual requests. Once we identify your location in CEE/SEE region from the drop-down list, a simple Excel tool will identify the ERA5 grid and extract data for further analysis and calculations.

Examples from several places are as follow.

Debrecen data
Extent of soil moisture deficit
Bratislava data
Extent of soil moisture deficit

As we see from the charts above, in areas around Debrecen and Bratislava, the 2022 year was the worst compared to the last 30 years, at least. For example, in Debrecen, it was 45.8% dryer than the average year in this region. The farmers would get insurance compensation in the amount of 25% of crop value if they signed a parametric drought insurance policy.

Why is the satellite soil moisture index the best parameter to insure drought?

  • Direct factor, impacting crop development/quantity for food processing
  • Combination of rain, temperature, wind, crop density, soil
  • Parameter independent of the parties to the insurance contract
  • Its value can be double-checked by the farmer/food processor
  • No field inspections are required
  • No paperwork to indemnify the loss
  • Fast insurance pay-out

Related Insights

Maksym Shylov

Group Practice Leader
Food & Agriculture

T +48 22 39 33 211

The Winter is coming: Can renewables break dependence on Russian gas?

One thing is clear – Europe needs to cover gas demand with alternative sources. The EU energy security is compromised if there is no diversification to cover Russian gas imports.

One thing is clear – Europe needs to cover gas demand with alternative sources. The EU energy security is compromised if there is no diversification to cover Russian gas imports. EU gas imports account for over 1,500 TWh and need to be switched into an alternative source.

Energy security concerns are sparking lively debates not only in the politicians’ offices, boardrooms, and conferences. This topic has made its way to family dinner tables, parties, and pubs. There are wild stories to be heard with opinions being polarised and swaying in both directions. Although it may seem that we are facing the impossible task of shifting from fossil fuels to renewable energy sources, public polls actually show a high degree of consent (9 out of 10 Europeans agree) regarding the EU’s energy policy priorities to ensure secure, clean, and affordable energy for all Europeans, according to a new Eurobarometer survey published by the European Commission.
The main questions are evolving around the feasibility of energy transition and the corresponding timeline. It is not a matter of if, but how and when. Our Energy, Power & Mining team looked closer into this issue.
As of March 2022, 85% of the EU gas demand was imported. Thereof 34% came from Russia and only 17% from Norway. The dependency on Russian gas has grown significantly within the EU, some countries being fully dependent on the single source, as the diagram below indicates.

Source: GlobalData, Eurostat

Over 30% of the imported Russian gas is being used for power and heat generation, and an additional 25% is used by the residential sector followed by industrial production with 21%. It is hardly a surprise that Russia’s ability to weaponise energy only accelerated pressure on consumer prices, global supply chains and the labour market.

The road towards alternative energy sources

One thing is clear – Europe needs to cover gas demand with alternative sources. The EU energy security is compromised if there is no diversification to cover Russian gas imports. EU gas imports account for over 1,500 TWh and need to be switched into an alternative source.
The International Energy Agency (IEA) has elaborated a 10-point plan for Europe. The plan is divided into 4 major action fields as follows:

Gas oriented actions

  • No new gas supply contracts with Russia (15 bcm contracts to expire by the end of 2022, and 40 bcm by the end of the decade.)
  • Replace Russian gas with gas from alternative sources (30 bcm from other countries)
  • Minimum gas storage obligations to enhance market resilience (higher injection will add to gas demand and push up the prices.)

Energy efficiency oriented  actions

  • Speed up the replacement of gas boilers with heat pumps (reduces gas use for heating by an additional 2 bcm in a year)
  • Accelerate energy efficiency improvements in buildings and industry (reduces gas consumption for heat by an additional 2 bcm a year)
  • Encourage a temporary thermostat adjustment by consumers (reduce gas consumption by 10 bcm a year(!))

Renewables oriented actions

  • Accelerate the deployment of wind and solar projects (could bring the gas use by 6 bcm)
  • Maximise generation from existing low-emission sources such as bioenergy and nuclear (can bring 70 TWh reducing 13 bcm of gas use in electricity)

Market oriented actions

  • Enact short-terms measures to shelter vulnerable electricity consumers from high prices
  • Step up efforts to diversify and decarbonise sources of power system flexibility

Research shows that the successful implementation of the plan can eliminate the demand for Russian gas by 2030. The renewable share of Energy has been growing steadily since 2004 currently reaching 23%. Hydrogen is perceived as a support to the gas sector. Renewable Energy Directives (RED) are assessing the possibility of installing blending obligations for increasing the sustainability of the European gas system from currently 1% to 20%, but not without major grid and infrastructure adjustments.

Apart from reducing the dependency on Russian gas, which now seems possible, there are various other aspects of the energy transition to consider as well. But for the moment, keep calm and follow the plan. So far so good.

What about the risks?

We read and hear surprisingly little about the uncertainties, unknowns, and associated project risks of such undertaking. Known unknowns are what drive many scientific experiments, business intelligence and data analytics and refer to information whose existence is someone aware of but does not possess. They can also represent potential risks. They can also represent potential risks. Far worse are the unknown unknowns, pieces of unidentified information, or “things  we do not know that we don’t know”.

The plan addresses several items, which carry inherent limitations in their nature and can, therefore, be considered severe project risks. For example, selling and installing 30 million heat pumps in the shortest term possible is a challenge even without limited manufacturing capacity globally, supply chain pressure and logistical difficulties.
Accelerating renewable energy generation capacity (EU requires over 900 TWh additional capacity by 2030) seems extremely unlikely for the reasons mentioned above and impossible without the addition of new manufacturing facilities, ideally closer to home, and not overseas. This means that technical and technological sacrifices will need to be made to accomplish the colossal task in a very short period. Furthermore, new personnel must be hired and trained to a very high standard demanded by the ever-increasing complexity of the renewable generation machinery (especially wind turbines). The recent crises caused by post-COVID shortages of staff in European road transport and air travel industries demonstrate just how difficult is to mobilise and ensure the supply of qualified labour to meet the demands of the green energy business.
Also, the grid, gas transport and storage infrastructure will require more than a major overhaul to adopt hydrogen blending due to the physical and chemical properties of hydrogen (highly corrosive, existing networks were not built with that in mind).
Lastly, it would be interesting to read the estimates of the capital expenditure required to upgrade the entire EU’s transmission and distribution grid systems to accommodate the change of topology coming from the replacement of a small number of centrally dispatched generation assets (located near the largest industrial electricity users) by a large number of distributed renewable sources located across the entire continent and in the neighbouring seas.
Until then, Europe will have to keep its coal-fired plants going (for example, Germany has already initiated a legal proceeding to abolish the prohibition of operating thermal coal plants beyond 2022-23).
Besides, 2030 is still 7.5 years away, yet the winter will be upon us in just a few months.

Related Insights

Zviadi Vardosanidze

Group Practice Leader Energy, Power and Mining

T +43 664 962 39 04

Adam Riley becomes new Group Practice Leader Health & Benefits for GrECo

GrECo has appointed Adam Riley as Group Practice Leader Health & Benefits, a newly created executive leadership role, to run, build and develop GrECo’s specialist Health & Benefits business across 17 countries throughout Central & Eastern Europe (CEE).
Adam joins from Howden Group where he was Director of Global Sales, Employee Benefits, part of their specialist Global Employee Benefits Practice Group. Adam was also the Howden One International Network Global Employee Benefits Manager for Howden’s own international network. Previously, Adam held senior roles at Aon, Portus Consulting and Pannells in the UK.

Georg Winter, CEO GrECo Group commented: “We warmly welcome Adam to GrECo and are delighted he has joined us at this very important juncture in our growth. Adam is highly regarded and well-respected across the Health & Benefits profession, he brings significant experience, insights, and importantly as we have already seen, a fresh outlook to GrECo. On behalf of the Executive Board, I personally wish Adam every success in the role.

So, Adam, welcome to GrECo! Why did you decide to join GrECo?
Following the acquisition of MAI CEE, GrECo has become the leading specialist insurance broker & consultant across CEE. The creation of my new role to run, build and develop GrECo´s growing Health & Benefits (H&B) business reflects the demands of clients and employers across countries in which they operate. We will relaunch our H&B offering across CEE, and wider international markets and thus follow our growth strategy to become the leading Health & Benefits consultancy across CEE, which further enhances the value proposition for clients, partners and carriers.
What key topics are you seeing employer’s discussing?
Beyond insured benefits, employers are looking at other factors which are part of the wider HR & organisational strategy. Areas such as, ESG (Environment, Social and Governance), alignment of benefits with corporate objectives, employee value proposition and achieving a balanced work / life harmony across their domestic and international workforce, are impacting decisions around benefits design and strategy.
What do you feel employers are looking for from a H&B partner?
A great question! Employers want to work with a trusted loyal partner who will provide greater support and tailored and progressive solutions, coupled with expert and professional advice, ensuring they have the right benefits, strategy, and direction in place to meet the changing needs of their employees and business.
Tell us about the Adam, outside of work:
I’m married, with two daughters. I also love SCUBA diving – and am a PADI Assistant Instructor. When I’m not talking H&B, the two most fantastic places in the world are either being with my family, or underwater!
Thanks, Adam. A final word from you?
Joining GrECo in their next phase of strategic growth is hugely exciting and provides an amazing opportunity to build and run their H&B business. I am hugely excited to be part of this team and its future strategy.

Related Insights

Beyond International Programs – Cover Exclusions for Russia, Belarus and Ukraine

Insurance cover exclusion papers

For ongoing insurance programs with inception before the start of the Ukraine war, there is in most cases still insurance cover through the agreed home country Master contracts, DIC and FInC covers until next renewal.

The European insurance and reinsurance markets are currently not providing any new covers for property and business interruption risks in the territory of the Russian Federation, in Belarus and, with a few exceptions, in Ukraine. For ongoing insurance programs with inception before the start of the Ukraine war, there is in most cases still insurance cover through the agreed home country Master contracts, DIC and FInC covers until next renewal.
However, the geographical scope will be restricted for all upcoming renewals and new contracts, and the countries mentioned will thus generally be excluded from insurance cover. This primarily affects the designated locations previously insured under the programs, but the exclusion goes beyond that and applies equally to any non-specified risk and assets located in those territories. In the past, such risks were included in standard insurance contracts, for example, by special clauses for small foreign risks (offices, small storage places etc.) or by the automatic temporary inclusion of “New business locations”. In Business interruption, all supply-chain disruption and NPDBI endorsements may be concerned.
It should therefore be checked in all upcoming renewals whether there could be a gap in coverage because of the general exclusion of those territories, which has to be discussed with the client.  Unfortunately, the only remaining alternative is to try to buy insurance cover for these risks from local insurance companies with the support from our local co-broker.
Even if property insurance is the main topic here, it should be noted that a similar exclusion for risks that arise within the affected countries can also be expected to prevail in the other lines of insurance.

Related Insights

How do Food & Agriculture companies insure their plants abroad?

International Insurance in Agriculture

Multiple positive benefits come with international insurance programs.

International or Local Insurance?

When an enterprise has a wide range of operations in more than one country, a convenient form of insurance ensures the entire enterprise, together with foreign entities, in an international program.

This is a fitting solution for companies with subsidiaries, commercial agencies, warehouses or production plants abroad.

Advantages of the international programme?

Multiple positive benefits come with international insurance programs.

They allow for controlling the scope of coverage and the cost of insurance from the level of the parent company by one person responsible for the risk or insurance. It is easy to obtain a homogenous and possibly the broadest scope of insurance coverage for the entire company without leaving any gaps. International programs usually mean higher limits and broader protection than those locally available for individual companies or plants.

Thanks to their wide scope and uniform structure, international programs come with a lower premium. This is not always guaranteed, but in most cases, the premium is lower than one negotiated with many different offers for individual companies/subsidiaries.

The conclusion of an international program allows a higher level of deductible. A group of companies, acting as a whole, can retain a higher share than a single entity. The higher risk levels remaining with the client, the smaller share of risk transferred to the insurer and the lower the final premium.

In the international program, people responsible for risk or insurance have access to all claims data, which allows for better analysis of causes and minimization of unacceptable risks. Finally, control over claims also means more effective claims handling by insurers.

However, there are several elements where international programs will not always be sufficient, and a better solution would be insurance taken on the local market. For example, there are risks exclusive to one company which do not exist at a group level (e.g. crop insurance). Also, we should not forget insurance that requires local service (e.g. health or accident insurance for employees).

As seen above, from the parent company’s point of view, international programmes have many advantages but do not always cover 100% of the risks associated with the activities of local companies. Therefore, the best solution is to combine both insurances. Use an international programme for those risks and assets managed at the group level and attach local policies (to the extent that the programme does not offer full coverage).

Based on this assumption, the best solution for the client will be to use the professional assistance of an experienced broker in both the development of international programmes and with a good understanding of the local market in the many countries where he actively works. GrECo is such a choice.

Related Insights

Zsolt Varga

Practice Leader
Food & Agriculture

T +36 20 292 33 73

35 ways to improve crop insurance

A farmer who already have crop insurance and for those thinking of getting one

Some advice for farmers who already have crop insurance and for those thinking of getting one.

Adverse weather conditions are common companions in our lives.  It is difficult to predict weather conditions, even if there is a long experience from the past. Global climate change and the probability that bad things may always happen lead us to thinking about how to insure this uncertainty.
The following text is our message to the farmers who already have crop insurance and those who are envisaging to buy an appropriate product.

First of all, why do I need crop insurance? 

In the practice of farming risk management, there are several tools for dealing with weather risks, in particular:

  • use of weather forecasts;
  • application of irrigation systems;
  • technologies of minimum tillage;
  • use of more drought-resistant varieties / hybrids;
  • diversification of crops, varieties / hybrids, growing regions, sowing dates;
  • external borrowing, government support, aid from friends after a damage has occurred.

Is this enough to be sure that I, as a farmer, will have guaranteed yield and financial results?

Of course, not.
The best irrigation technologies and moisture saving practices will help to prevent or mitigate the loss, but, unfortunately, not in full. It is like in aviation, where people care for the utmost safety of flights, but there are still parachutes and oxygen masks on board.
Some farmers rely on the strategy to compensate losses of bad years by the yield surplus of good years. However, such practice is getting more and more problematic, as we are facing more often than before consecutive bad years (e.g. 2018 and 2019 in Poland and Lithuania). Sometimes there are even three bad years in a row. Imagine!
Moreover, such a self-retention strategy for losses requires actually more money than buying insurance.  You, as a farmer, can say “I will no longer buy a new Range Rover right now, as I have to freeze my funds to cover my loss caused by the next drought”.
In some CEE countries, farmers do not have a long-term risk management strategy and live just as they are, despite facing a lot of risky situations. If you really think to sell your farming business at any time, the value of your company will be much higher, if there is a stable annual cashflow that is supported by an effective crop insurance policy.

And let’s not forget about your health! A farmer sleeps better when he has an appropriate insurance policy, he feels much safer, especially if his cover is provided by a recognized insurance company, who cares for long-term relationship.

Find the right insurance company

You can trust your partner after you have made a thorough check. It is true that there are sometimes complaints about insurance products and companies. But on the one hand people tend to speaking 10 times more about bad experience than about positive events. On the other hand, mistrust can be a result of misunderstanding. First of all, we recommend to our farming clients to understand who their insurers really are.
Some points for you to consider and to ask your insurance agent:

  • Who is the shareholder of the insurance company?
  • How long do they exist?
  • Who reinsures the risks of damage to your crops?
  • How much will the insurer really pay from his own account in case of a catastrophic weather event, i.e.  when the other farmers will also suffer loss?        
  • What was the ratio between collected insurance premiums and payments in the past?
  • How many people with agronomic education or practical experience in agronomy work in their staff?          
  • How many crop insurance contracts do they have in their portfolio and how many insurance claims were made?        
  • Are there any substantial loss payments per single claims?  
  • Are there any farmers who received significant payments and can recommend this insurance company to you?

Realize the gaps in your coverage

The second thing suggested by us is that you understand your insurance cover.
In CEE/SEE markets it is difficult to find the ideal crop insurance.  Due to the nature of agriculture itself, detecting the ideal insurance solution is generally not easy. But there are some insurance markets that reach some level of excellence thanks to their long-time tradition of public and private partnership in agriculture. However, they do not work in most cases for Central and Eastern Europe … We hear very often from European insurers about their “low risk appetite”!
Our checklist to investigate your coverage is as follows:

  • Is the sum insured high enough to cover potential loss? 
  • How is the yield to be insured defined?
  • When does the coverage incept and end?
  • How fast will my crops be admitted for insurance?
  • Are there any additional indemnity limits?
  • How is the yield loss estimated?
  • What is the methodology of calculating the predicted harvested yield?
  • Are all my production perils covered? 
  • How high is the deductible?
  • How is the deductible applied (per field, per loss, per crop, per farm)?
  • Are there any additional franchises or deductibles?
  • Are all my crops covered?

If you are just starting with crop insurance, we also advise to make historical simulations of pay-outs – how much indemnity would you have received if you had had this crop insurance contract in the past, i.e. when your loss had really occurred?
However, please be aware that in a short-time perspective you always pay for insurance more than you may get back in loss payments. But think of the fact that the insurance premium has to contain reserves for the probability of catastrophes and a possible deviation from short-term (10-15 years) statistics.  Some new losses might occur on your farm, that you did not experience in your past farming history. Moreover, the climate change trend is not quite optimistic and, as a rule, does not lead to expectations of better yields…
If something is not possible to insure (lower deductible, higher limit, a specific peril, early risk period etc.), keep in mind that some gaps in the coverage can be eliminated by alternative risk transfer solutions, like parametric insurance, weather derivatives and captives.

Mind the insurance wording

You are definitely right that insurance wordings are boring and difficult to read, but “the devil is in the details”. When it comes to the big loss, all such details will be relevant.
Please, be careful with the following clauses of insurance wording:

  • Is your insurance contract really complete with all wordings? It may happen that some insurance terms & conditions are not provided to you for your consideration. They might contain additional exclusions from insurance coverage, as well as other clauses of significance, like special warranties.
  • There should be no contradiction between single wordings. Otherwise you need an additional clause that clarifies which stipulation is the right one in a given situation.
  • Is there a right of the insurer to terminate the contract unilaterally during the contract period?
  • What are the definitions of the insured risks?
  • How is the stipulation in respect of change in risk during the policy period?
  • Is the methodology of loss estimation fully documented and clear? 
  • Are all documents and additions related to the insurance contract (incl. crop survey protocols) signed by the authorized people?
  • Is the insurance company obliged to leave an original copy of any crop/loss survey report at once on the farm?
  • Is there any deadline stipulated for crop surveys after the loss has occurred?
  • Is the farmer allowed to leave some samples for an alternative expert opinion?
  • How does the “gross negligence clause” look like?
  • What are the deadlines for the insurer’s right to postpone their decision on claims payment?

Find the right partner to help

And last but not least: Never be alone! Find the third party who can help you in case of any problem with insurance products or insurance companies. You can ask for the help of the professional broker, as he is highly skilled and experienced in respect of insurance wordings, he thoroughly knows the insurance markets and he has developed good working relationships with crop insurance risk carriers.

Related Insights

Adriana Cavescuone

Adriana Cavescuone

Account Manager
Food & Agriculture

T+40 21 302 24 09

Diving into Supply Chain Insurability

Workers working on supply chain insurability

Insurability in relation to supply chains is currently only possible in rudimentary form, as the insurance industry is also not yet in a position to map complex supply chains transparently. Individual market participants such as Swiss Re are currently working on digital solutions.

GrECo Risk Engineering implements and controls the Business Continuity Management (BCM) of numerous clients. The question of whether BCM can also identify and manage risk potentials within the supply chain arises more and more frequently.

BCM prepares companies to regain their ability to deliver as quickly as possible after a business interruption or shutdown. Acting instead of reacting is the motto here.

Identifying loss events within a company, assessing them and finding effective preventive measures requires a lot of experience and methodical knowledge. But it also ties up considerable internal company resources in order to be best prepared for the worst-case scenario. Risks that affect a company externally, such as the dependence on suppliers or entire supply chains, make the issue far more difficult.

Most manufacturing companies operate extensive systems for supplier selection and evaluation. The focus is often on delivery reliability, quality, price and economic parameters. However, the consideration of suppliers in terms of their exposure to operational risks such as fire or natural hazards is often neglected. In the case of direct suppliers, this is still possible with a corresponding expenditure of resources and can be argued to the supplier as necessary.

Where transparency ends – Supply Chain Insurability

However, when it comes to the supplier suppliers, the limits of what is organisationally, legally and economically feasible are quickly reached. “Deep-diving” into supplier structures thus belongs to an exotic discipline that hardly anyone can afford at present. How can a company now prepare for supply chain disruptions or better protect itself against them?
Insurability in relation to supply chains is currently only possible in rudimentary form, as the insurance industry is also not yet in a position to map complex supply chains transparently. Individual market participants such as Swiss Re are currently working on digital solutions to identify locations via extensive databases, which can lead to supply bottlenecks across industries in the automotive sector, for example. In most cases, however, any cumulative losses cannot be sufficiently estimated, and a risk transfer is often not possible. It is therefore essential to actively address this risk within the company.

  • Step one: The first step is to identify the most important suppliers and estimate possible loss potentials. This assessment is necessary in order to be able to set priorities objectively and to compare the necessary effort with the benefit.
  • Step two: The second step for risk managers is to dive into the deeper structures of the supply chain for the top three to five suppliers in order to shed light on the suppliers on which these suppliers are dependent, which, if the worst comes to the worst, will also affect their own company. However, evaluating risk exposure could be difficult. After all, there is no direct business relationship with the suppliers of the suppliers and thus no basis for carrying out a risk analysis directly on site.

One approach that is recommended in this case is to raise awareness among one’s own key suppliers so that they collect appropriate risk information from their suppliers or commission experts to identify possible potential exposures. If neither of these is possible, knowledge of one’s own “white spots” in the supply chain is still a parameter that should flow into the selection of suppliers and lead to the examination of alternatives. This is also part of a practised and practicable business continuity management.

Related Insights

Johannes Vogl

General Manager GrECo Risk Engineering

T +43 5 040411160

Product Contamination Insurance – Risks and Liabilities

Food and Production Contamination Insurance

Product Contamination Insurance offers a much broader range of cover than classic recall insurance and provides cover for a catalogue of costs.

Companies operating in the food industry can face many problems leading to significant losses due to incidents of product contamination. The topic is important, particularly for those businesses that operate outside their local market.

Exporters need additional organisational and financial support when reacting quickly to a real or potential threat to property or the life or health of consumers in various parts of the world caused by their product.
According to several studies, as many as 58% of companies have been affected by events involving food recalls.

The risk of a product recall is always present

The product recall insurance offer is designed for any client who places food on the commercial market, including both unprocessed products (e.g. meat or seafood) and highly processed finished products (e.g. cold cuts pasta, confectionery, beverages).

Due to the nature of the products sold and their storage requirements, great care should be taken by those who distribute, for example, fruit and vegetables. These products are sensitive to storage conditions. Improper storage of eggs and dairy products can even lead to health problems and illnesses for consumers. It is also crucial for manufacturers who use nuts, grains or spices in their plants to be mindful of the risks associated with possible contamination of their product by these allergenic agents.

Product withdrawal from the market can happen for multiple reasons. It could be microbiological contamination, i.e. contamination of the product with bacteria; it could also be physical or chemical contamination. Mislabeling, use of unapproved ingredients, or even failure to observe the proportions between individual ingredients may cause the claim and the need to recall the product. These circumstances lead to the product being considered non-compliant or even dangerous for consumers and a recall for the entire batches of finished products.

One example is a German company with a turnover of EUR 100 million that had to incur additional recall costs in the US and UK after listeria bacteria was found in its meat products. In the end, the loss amounted to EUR 90 million.

A bottle manufacturer from Poland received a $10 million claim related to having to recall several million bottles of beer. Only three bottles had cracks, but all of the bottles placed on the market were recalled for customer safety reasons. Insurance covered the loss.

What are the reasons for liability?

Liability reasons can be multiple. Accidental contamination means ingestion of the insured product has led or may lead to bodily harm. Examples of contamination include listeria, E. coli, salmonella or foreign bodies (e.g. plastic/metal in the product).

Malicious product contamination is the actual or likely deliberate alteration/contamination of a product. Often it is done by disgruntled employees who have access to the facility or product.

Product-related extortion happens when a person or group threatens to extort money by deliberately tampering with a product, e.g. contaminating it. Government withdrawal represents a forced or ordered withdrawal by a government or regulatory body. It often includes suspension of operations and applies whether or not contamination is present. Finally, adverse publicity is any reduction in sales caused by alleged, but not actual, contamination.

What can you expect with Product Contamination Insurance?

Product Contamination Insurance offers a much broader range of cover than classic recall insurance and provides cover for a catalogue of costs:

  • Recall replacement costs (including product value), damage-owned and third party costs and expenses.
  • Interruption of the insured’s business and loss of profit – inter alia if the facility is closed due to contamination and needs professional services to survey and disinfect the facility. Even one day of downtime generates a loss, and prolonging it increases costs.
  • Increased labour costs – the cost of staff working overtime or employing extra people to clean up the contamination/recall or disinfect the plant.
  • Reputation restoration costs refer to the cost of bringing the brand back to its pre-recall condition. Includes sales and marketing costs, like giving a discount on your next product purchase or promotion where if you buy one product and get another one for free.
  • Product recall liability damages are any damages that the insured is legally obliged to pay to its customer in the event of contamination. Damages may include loss of client profits, rehabilitation expenses or reimbursement of purchase costs.
  • Consultant costs refer to the expenses of expert consultants who will guide the insured through the crisis. A pre-incident fund is also available in the policies, and it may include reviewing crisis management plans and providing food safety training.

This article is a part of our Foodprint publication focusing on issues and risks facing the Food & Agriculture industry. Read the publication and learn more about insurance solutions and the growing importance of risk management and alternative solutions like parametric insurance.

Related Insights

Stephan Eberlein

Group Practice Leader Financial Lines

T +43 664 962 40 60