Insurance from Copacabana to Ponta da Piedade

Insurance From Copacabana to Ponta da Piedade

José Manuel Fonseca, CEO of GrECo nova partner MDS Group, talks to GrECo nova Network Coordinator Jonathan Höh about the special features and differences of the two largest MDS insurance markets: Portugal and Brazil.

The two countries have many things in common, such as language and their dynamic growth, but on closer inspection, they could not be more different. Jonathan Höh and José Manuel Fonseca take a closer look at the insurance markets of Portugal and Brazil.

MDS is the market leader in Portugal with almost 300 employees in 9 local offices and in Brazil among the top 3 insurance brokers, with more than 500 employees in 12 locations.

HÖH: José Manuel, tell us something about the insurance markets in Portugal and Brazil.

Fonseca: Let’s start with Portugal. Here, the insurance market is highly developed – in terms of population – at just under 5%, but of course much smaller than the Brazilian insurance market. However, Portugal is currently experiencing a growth spurt due to the events of the last few years. For example, the pandemic has led to an increased demand for health & benefits solutions. We are experiencing an upward trend, especially in health and accident insurance, which is expected to continue. In addition, Covid-19 and the global natural disasters have unfortunately led to a massive hardening of the market in Portugal as well. In property and business interruption insurance, liability insurance, but also in financial lines such as D&O and cyber, capacities are tumbling and premiums are rising, in some cases massively. In summary, the Portuguese insurance market is characterised by stronger demand for personal insurance, especially health insurance, and despite the tough market environment, also for cyber and D&O insurance. In addition, there is significant growth in retail and insurance related to e-commerce platforms, B2B2C as well as online sales.

The Brazilian insurance market is also developing well. The main drivers here are agriculture, livestock, health and technology, with the latter gaining tremendously in importance due to the exponential increase in teleworking. We expect this trend to translate into increased demand for cyber insurance in Brazil as well. Agricultural insurance has also seen the largest growth in recent years, with a 30% increase. Other booming areas, partly due to the pandemic, are surety and credit insurance.

Brazil is also attractive to foreign investors but is considered a high-risk country in terms of stability, corruption, bureaucracy and currency fluctuations. Therefore, hedging political risk is important.

HÖH: Let’s go into a little more detail. Where do you see the main differences?

Fonseca: In Portugal, an EU member, most insurance regulations are similar to those in other EU countries. After all, they are based on EU regulations and directives. For example, motor vehicle liability insurance has been compulsory for forty years, and the scope of coverage is at the European level. Brazil also has compulsory third party motor insurance, but at such a low level that it does not provide sufficient minimum protection. This means that international corporations are well advised – especially when travelling on business with rented cars – to purchase the so-called “non-ownership clause” as a protective cover in their global liability programmes to guarantee a minimum level of protection.

Brazil, unlike Portugal, is a broker market. This means that in Brazil it is mandatory to purchase insurance through an insurance broker. Another key difference that is relevant for large international companies, concerns the reinsurance capacity. In Brazil, reinsurance is highly regulated. Many companies have to reinsure through the largest Brazilian reinsurer IRB, Instituto de Resseguros do Brasil, while in Portugal risks can be freely placed on the international reinsurance market. 

HÖH: What distinguishes the MDS Group as a partner for the industry?

Fonseca:
MDS was founded in Portugal over 35 years ago. From the beginning, we have strived to build a global company that challenges standards, sets trends, modernises processes and expands business areas and portfolios. With our presence in seven countries – Portugal, Brazil, Spain, Angola, Mozambique, Malta and Switzerland – MDS is a strong partner for the industry and an independent leader in several markets, with Portugal and Brazil being our two largest markets.

Since 2017, we have also been Lloyd’s broker, incidentally the only one from a Portuguese-speaking country.
We will continue to focus on digital transformation as one of our strategic priorities, investing in technology, software development and teams of experts.

For example, we have developed an app that allows our clients to access their insurance portfolio easily and quickly via mobile phone. To meet the need for efficient processes, we are also using digital tools to manage most administrative tasks, enabling both our clients and our teams to invest freed-up time resources in high-quality activities.
 
About José Manuel Fonseca
Jose Manuel Fonseca has led the MDS Group for 20 years, growing the company from a small broker to a giant in the Portuguese-speaking region. He has 35 years of experience in the risk and insurance industry. Fonseca is also chairman and founder of Brokerslink and a former vice-president of FERMA (The Federation of European Risk Management Associations) and a board member of CIAB (The US Council of Insurance Agents & Brokers). In 2018, he was awarded the “The Broker Leader of the Year” award by FERMA.

About MDS Group
MDS was founded in Portugal over 35 years ago. With an active presence in seven countries – Portugal, Brazil, Spain, Angola, Mozambique, Malta and Switzerland – MDS is a strong player in the European brokerage landscape and an independent leader in several markets. The company employs 900 people who manage a premium volume of 650 million EUR and generate a turnover of 80 million EUR.


This article is a part of our latest Spotlight publication focusing on supply chain issues. Read the publication and learn more about how you can protect your business from changes and unpredictable supply chain disruptions.

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Jonathan Höh

Network Coordinatoron

T +43 5 04 04 396

José Manuel Fonseca

MDS Group CEO

Insurance Market Update Central Eastern Europe (CEE)

Europe coming together – also in insurance

Like in other economic areas, differences between the Eastern European countries and the rest of Europe are also disappearing in insurance. CEE states have travelled a long way after the fall of the Iron Curtain: they started at a very low point of insurance volume, but insurance penetration has steadily been growing, “Western” insurance practices and legislations have been introduced very fast. Today the CEE insurance market consists of both subsidiaries of international groups and strong local companies.

Whereas at the beginning there was only motor insurance and industrial insurance in the focus, the population can by now afford better insurance for their property as well as life insurance. Only liability insurance remains behind, as the jurisdiction is still not at the high level of protecting the interests of claimants like in the rest of Europe.
For this reason, the change in underwriting behaviour we are currently facing is somehow smoother on the CEE markets, but the general strategy of international groups and business exchange with reinsurance will lead to similar situations like in other highly developed markets.
For the most recent developments on the CEE insurance markets we have picked Poland, Czech Republic and Russia as a model for other markets.

Poland

In 2020 the Polish insurance market achieved a premium volume of 20.7 bn PZN (4.6 bn EUR) in Life insurance and 40.7 bn PZN (9 bn EUR) in Non-Life. Insurance penetration stands at 3.7 %, thus reflecting the country’s overall picture as one of the well-advanced economies among the Eastern countries. There is a typical consolidation tendency on the insurance market, as shown by the recent sales between international groups: Nationale Nederlanden bought MetLife, Allianz took over Aviva and Uniqa purchased Axa. Despite these changes, most European insurance groups are active in Poland, contributing largely to the capacity of the market along with major Polish insurer PZU. For overall market figures see:www.piu.org.pl

For many years, Poland has been a rather low-premium market due to high competition and relatively good results in most lines of business. This has changed by now in industrial insurance, where international standards and practices are more and more adopted. So, we have seen the same tendencies like in Western Europe at the last renewal and are expecting them for the renewal(s) to come:

  • more underwriting information required in order to support a policy of selective underwriting, but still no withdrawal from certain branches or occupations;
  • increase of deductibles;
  • price increase in PDBI and Cyber of 10 % – 20 %, and of 20 % – 30 % in D&O, thus more moderate than in other countries.
  • CAR insurance is well developing due to the booming construction industry in the country, but bad loss experience in civil engineering for roads, hydrotechnical plants and tunnelling is leading to a reduction of market capacity, available only at higher price.

One of the great changes the Polish economy will have to face is the transformation from coal as the country’s most important energy source, to other, “green”, sources. Although this will take some time, opportunities for innovation of both the technical bases and insurance solutions will positively influence the insurance market.
Still, one of the main concerns of the insurers is to obtain higher market shares, which leads on the one hand to product innovation and product enrichment in life insurance and to a wild price war on the other.

Czech Republic

The Non-life insurance premium of this traditional industrial nation amounted in 2020 to 94.7 bn CZK (3.6 bn EUR) and the Life insurance premium reached 46.5 bn CZK (1.8 bn EUR). This results in a good average insurance penetration of 3.2 %. Market shares of the insurers working in the country remain stable. After the integration of former state-owned market leader Ceska pojistovna into Generali a short time ago, the market is dominated by the big European insurance groups. Generali will also reach out to integrate their company in neighbouring Slovakia into Generali CZ, thus again creating one market for both countries.
The insurance market has gone well through the Covid-19 pandemic, as the peril was excluded from all wordings except travel insurance. It seems that the market will become interesting for MGAs working with the capacity of German and British insurers. The year 2020 was relatively good for the insurance market with the same claims experience like in the previous year.

  • The general underwriting policy remains unchanged except for some insurance lines like D&O, cyber and similar financial lines, where local carriers follow the approach of the international markets, reducing the capacities and increasing the price by 10 – 20 %.
  • In industrial insurance, pricing remains stable and is rather competitive.
  • There is also a strong tendency to increase prices in motor insurance for all clients with a long-term loss ratio above 60 %. There is a high stability in the scope of coverage provided, with no signs of restrictions.

Russia

The Russian insurance market consists of 229 market players (154 Insurers, 57 Insurance brokers, 18 other insurance related companies), but their number is decreasing (e.g. minus 13 within one year) due to the consolidation between local insurance groups. Despite the enormous size of the nation, business is concentrated in Moscow, with 10 insurers collecting 70 % of the whole market’s premium of 865 bn RUB (10 bn EUR) in non-life and 430.5 bn RUB (4.9 bn EUR) in life insurance.

Supervision of the insurance market by the Central Bank of Russian Federation is quite effective, focusing on financial stability and good business standards, approaching the high levels valid in the European Union. After the restrictive measures by the state in connection with Covid-19 in 2020, the insurance industry is recovering and will reach a growth rate of 8 % in credit and life insurance and of at least 3 % in non-life insurance until the end of 2021.

There is still a soft market for property and casualty insurance, as well as employee benefits and the marine lines, but, like anywhere else, a hard market in financial lines such as D&O, Cyber and Crime. After price increases of 20 – 30 % in D&O in 2020, a further 5 – 10 % rise has been registered at this year’s renewal, all at rather limited capacities. If, in all lines, a major reinsurance share is needed due to the size of the risk, the strategy of the international carriers will influence local underwriting decisions, leading to the well-known price increase and other measures.

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Andreas Krebs

Andreas Krebs

Head of Insurance Mediation Services

T +43 5 0404 229

In the jungle of insurance taxes

An overview of taxes, levies and other charges for policyholders in CEE countries.

The possibility of companies not receiving payment for their products sold or services performed always exists. Poor payment discipline, insolvency procedures, political risks, risks and prevention measures we faced in relation to COVID-19 pandemic are the ones which can jeopardize company’s financial security. In most jurisdictions around the world insurance premiums are subject to indirect taxation, such as VAT, Goods and Services Tax or a specific tax, such as insurance premium tax (IPT), stamp duty or other levies. Over the past few years and in line with a global trend of governments’ positions to take profit from bigger market turnovers, a growing number of countries have introduced or increased insurance premium tax and parafiscal charges.

In most of Eastern Europe, but definitely within the European Union member countries, insurance services are generally exempt from VAT, and most EU Member States have introduced a tax or levy on insurance premiums. The variety of taxes on insurance premiums can be a burden for insurers writing global multi-jurisdictional programmes, as they need to understand which taxes apply in countries where risks are located. Insurers often need to administer and pay taxes in those countries, and historically there has not always been a high level of compliance when it comes to “foreign” insurance taxes. Non-compliance is still an issue, and application of local taxes should be agreed with the insurer considering the size of each risk.

  • One of the major issues for the correct calculation of taxes in international programmes and for the tax payment in the state where the tax is due, lies in the principle applied by individual tax legislation. Most of these tax laws stipulate that the insurance tax is due in the country where the (property) risk is located, the company activity is deployed or where vehicles are registered (principle of risk location).
  • Some countries, like Germany, add to this basic principle the stipulation that the tax is due in their country, if the policyholder is a national citizen or company (principle of policyholder). The obvious conflict between the two principles may be solved by superseding EU regulation or by a double-taxation agreement. Each case must be examined individually.
  • The third principle that applies at least in EU countries is that insurance of international transports and credit risks is exempted from taxation. There are other special rules for the insurance of diplomats or travel insurances, but this would lead to far in this general survey.

With these considerations in mind, brokers are becoming more concerned about their obligation of correct advice giving in respect of foreign insurance taxes. Although in most cases the insurer will transfer the tax amount to the respective tax office abroad, the policyholder remains liable for the correct tax payment and is held directly responsible by the state that does not receive the tax in accordance with their legislation. It is the duty of the broker to check at least the correct tax calculation by the insurer.

Insurance Premium Taxes in Eastern Europe

In Eastern Europe, IPT is still in its early stages and the amounts collected remain relatively low, when compared to Western European standards. Among the territories that joined the EU in 2004, multiple countries have not yet introduced a Western European IPT regime. This is the case in Estonia, Latvia and Lithuania but also in the Czech Republic. Bulgaria is an example of low insurance premium taxation. Slovenia and Slovakia, in turn, have IPT rates closer to those applied in Western Europe and with a limited number of exemptions.

Hungary has introduced a so called IPT regime, but in fact it is based on an insurance levy to be paid directly by the insurer in accordance with the size and structure of his portfolio, following a sliding scale model. This means that the insurer must not put insurance tax on his premium invoice. Of course, he is allowed to consider the levy among his costs in the premium calculation.

The same levy principle applies in Romania or Poland, where insurers have to pay direct contributions to the state for various reasons but are not allowed to charge the policyholders directly. They will be hidden, however, in the overall premium calculation.

Looking at the non-EU countries in Eastern Europe, almost no IPT regimes can be observed. Serbia imposes a 5% insurance tax payable by the insured on all non-lifelines except health, accident and credit. In Ukraine, a levy calculated on gross written premiums (GWP) has to be paid by locally admitted insurers and reinsurers (excluding any inward reinsurance acceptances and without deduction of outward reinsurance remittances) and other contributions to funds have to be paid by insurers for almost all non-life lines.

Russia does not apply insurance premium taxes payable by policyholders. However, there are several levies to be paid by insurers from GWP into various reserve funds as well as a compensation fund run by the insurer associations to protect policyholders in the event of an insurer insolvency.

In Georgia, Armenia and Azerbaijan multiple levies on all non-life classes including inward reinsurance apply. In Azerbaijan the supervisory levy is collected on all classes of insurance.

In view of the various terms used for describing insurance taxes, levies, contributions, stamp duties etc., we recommend differentiating between:

  • Insurance taxes = always paid separately by the policyholder and shown clearly in the premium invoice
  • Additional taxes = also paid by the policyholder, apply to some lines of business only; e.g. fire brigade tax for policies insuring fire risks, motor insurance tax in connection with Motor TPL insurance
  • Levies and similar contributions to the state or to funds (also called parafiscal charges) = paid by the insurer and being part of his overall expenses

Increasing international discussions

While taxation, including insurance taxation, remains a largely sovereign matter, a number of prominent tax issues are increasingly being discussed at international or EU level. In recent years, for instance, policymakers have been seeking ways to ensure that companies pay their fair share of tax and avoid profit shifting to reduce their tax bills. Due to the cross-border nature of tax evasion and avoidance, this effort requires international cooperation. This development also touches the area of insurance premium tax and levies.

There are discussions on EU level to have insurance taxes replaced by ordinary VAT. This would mean that indirect insurance taxation becomes common use throughout the Union and associated partners, but the implementation will still take some time, as it is not considered to be a major issue to be solved.

Ensuring Compliance for GrECo clients

Giving advice on correct insurance taxation to clients is an integrated part of our service delivery. All GrECo employees have access to information material in this respect from international sources, selected local information and internal news. Under its compliance policy, the GrECo Group is continuously monitoring all developments in taxation in GrECo markets and offers evaluation of complex insurance taxation cases where a more thorough study of legal texts and practice is needed.

IPT in CEE (July 2021)

IPT in CEE (July 2021)

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Andreas Krebs

Andreas Krebs

Head of Insurance Mediation Services

T +43 5 0404 229

We think and live internationally

The demands on risk and insurance management are naturally complex. This is especially true in the management of international groups of companies.

The opening up of the East and a few years later the accession to the EU have boosted the Austrian economy.

GrECo also recognised the opportunities at that time and started on the path towards internationalisation more than 30 years ago. An independent department was established in Vienna, the “Central Account Management”, or CAM for short, which manages all the insurance interests of globally active groups of companies.

The CAM team focuses exclusively on this client segment. It is also responsible for the so-called incoming business, i.e. investments by foreign companies in Austria. The account team also manages the own international network GrECo nova, which acts in the interest of the clients.

Local and international know-how

As with purely national insurance solutions, international programmes also begin with an intensive examination of the risk. This is the basis for the risk financing strategy, from which the insurance principles are derived.

Specialised knowledge is required for the correct design of insurance programmes. It is important to know local regulations and special features. GrECo is in constant exchange with international partners and accesses databases to take all current trends and country specifics into account when designing contracts. This makes consultancy challenging, not least because the circumstances are developing dynamically.

Monitoring & Controlling

Central monitoring and guidance are an essential element of GrECo’s service for international clients. In this context, claims management plays an important role. Of course, our experts are also available worldwide to advise clients on site if necessary.

In addition to providing top service on global insurance programmes, the CAM team also handles regular reporting, often using its own GrECo Online Services. The decisive added value comes from quality control and analysis of the data. In addition to an accurate overview of costs, we also create a basis for decision-making. We develop all digital solutions in-house, which allows us to respond quickly and individually to our clients’ needs.

GrECo nova – surprisingly individual

GrECo nova has been working with the majority of its international partners for a very long time. This is a great advantage, as trusting relationships have been built up from this. We and our partners share the independence and identity of owner-managed companies. Moreover, many of our partners are market leaders in their home countries.

The cross-national and cross-organisational cooperation is tried and tested and based on internationally recognised service standards that regulate all aspects in a binding manner. This creates clear structures. Contractual agreements allow for enforcement where necessary. In practice, the advantages of independent selection of the local service team are even more extensive. The right broker partner is selected by the CAM team according to regionality or sector know-how and not hired via an anonymous international desk.

Turnstile Placing Hub

GrECo nova also makes mutual use of the partners’ specialised knowledge and direct access to international experts in various industries or insurance sectors, so that cooperation is lived in the sense of “best of all worlds”.

This also applies to access to capacities. Via Placing Hubs, we access all relevant international players in the insurance and reinsurance market. This allows us to individually configure the best solution in each case.

The CAM team is not only professionally active around the world, but also thinks, feels and lives internationally. This can be seen, among other things, in the universally shaped leisure time behaviour of many team members. One colleague, for example, is a passionate mountaineer and tackles the 6000-metre peaks of this world. Another colleague is a table football player with international tournament experience. In general, the team is a good mix of long-standing GrECo employees, including real GrECo veterans, and young talents, some of whom completed their apprenticeship at GrECo and were then able to develop further.

Communication skills in demand

Communication has a prominent position in the CAM team. This, of course, concerns – very obviously – language. Among the team members, there are many language talents who speak several languages at once, including Chinese. But even more than language skills, the experts need communication skills, especially when it comes to the tension between central decision-making and local implementation. In addition, in international business it is essential to understand the special features of local markets and to design an optimally adapted solution.

Flexibility, of course!

The activities of our clients on different continents require intensive travel. The experience of the last few months shows that there are unfortunately limits to the exchange via virtual channels, especially when it comes to risk consulting or claims management.

But it is not only activities that can be planned, such as risk surveys, that are carried out with élan by the CAM team. By their very nature, international groups of companies are much more frequently involved in M&A activities. It can happen that an insurance due diligence has to be prepared at very short notice, often within a few days, and/or a planned deal has to be provided with a suitable transaction insurance (warranty & indemnity).

Roland Litzinger is pleased: “I am proud of the achievements of our team of around 30 experts. We can confidently claim that our bundled competence, combined with extensive experience, is outstanding.”

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Roland Litzinger

Head of International Business GrECo Austria

T +43 664 210 50 13

Challenge is our different states with very different cultures

Tusher Thakker, CEO at PERAJ INSURANCE BROKERS talked to Jonathan Höh, GrECo nova Network Coordinator about the variety of languages in India and how excellent client service can lead to long-term client relationships.

HÖH: India will be the most populous country in the world. India has, arguably, greater linguistic diversity than any other large country. The precise number of languages spoken in India is probably over 1,000, but it is often hard to define when one language begins and another ends. How does this affect business? How do you cope with this varieties?

THAKKER: Well, the number of spoken languages, regional, folk etc. is said to be over 3000. However, we have Hindi as a national language which is taught in almost every school. Also, most schools in major cities and towns are English medium schools where Hindi is taught as a language, but overall teaching is in English. Most legal documents including insurance policies are printed in English. Language has never been a barrier in growth. In fact, India has become a huge IT hub because of a very large, young English-speaking population.

HÖH: What are the biggest risks that foreign companies operating in India need to be aware of?

THAKKER: So far, the major risk has been frequent policy changes in various sectors but that seems to have changed. The government seems to have adopted long term goals and have set up policies accordingly. Sometimes, infrastructure projects get affected when there is a difference opinion between state and central government.

HÖH: How do India risks differ from those in other countries?

THAKKER: Infrastructure is not at the same level as in Europe, the US or even China. That can be a “challenge” or a risk at some point. I would say the other “challenge,” which is not so much a risk, is that we have different states with very different cultures, different languages, and different consumer behaviour. That can be an extraordinary situation for companies that want to be present throughout India.

HÖH: What regulatory challenges are companies facing? What types of insurance are mandatory?

THAKKER: The current government is very industry friendly. A lot of new Economic reforms have been introduced and the latest budget presented on February 1st has been very well received. Non admitted cover is prohibited but some multi-national companies still rely on the master policy for D&O cover with no local policy. This can be a big issue and it is mandatory for stock listed companies to have a local D&O coverage in place. Other mandatory coverages include MTPL and a public liability act policy when storing or manufacturing certain, specified hazardous materials. The “cash before cover” law presents a challenge when it comes to global programmes as we often receive invoices / quotes very late and sometimes after renewal.

HÖH: How do you cope with these regulatory issues?

THAKKER: It is a standard practice for us to keep our partners updated with developments in India, be it regulatory or market practices. To cope with cash before cover issues, we keep regular contact with the local fronting company and global brokers well before renewals. Wherever possible (if accepted by the local fronting company) we advise the client to place deposit money, if invoices / quotes have not been received.

HÖH: Can international insurance programmes be implemented? Which special features must be considered?

THAKKER: Programmes can be implemented, all lines. Recent development however is that on PDBI local tariff rates will apply even on programme policies´. One must always remember that India has cash before cover law and that Indian clients are used to low deductibles. In general, local deductibles are much lower than programme policies for almost all lines. We closely interact with controlling brokers particularly on scope of cover. Generally, our observation is that when submitting terms to master insurers, local fronting companies often submit narrower terms.

HÖH: Please describe Peraj incoming business servicing capabilities?

THAKKER: Peraj has been in international business since 1978. We take extreme care to have a diplomatic and delicate approach with clients. We endeavour to spend time and efforts on confidence building with clients. More so when programme policies are to be implemented when local terms appear better. We try to engage clients in conversation, answer all their questions and allay all their fears and apprehensions. Generally, when the appointment is from HQ, the local client tends to get apprehensive. We give them comfort and confidence that we are by their side, to take care of all their issues. The entire team speaks fluent English in addition to local regional languages.

HÖH: Can you tell us about your most complicated case when dealing with international clients?

THAKKER: A large cement producer was setting up a very big and complicated project in this region. The quarry was being set up in the North East border of India and the cement plant was to be erected in Bangladesh, the two to be connected with a closed conveyor belt, 17 km long (longest in the world) crossing the international border and a river. North East was and is still a troubled state with Naxalite activities (insurgency group). The Bangladesh market was too small to be able to write a risk of the size the client was proposing (in fact the entire capacity was just about 5% of the requirement). Owing to challenges mentioned above, international reinsurers were unwilling to write lead terms and we had to arrange most of the capacity from India. The leading broker assigned us the task of placing the risk locally. The year was 1996 and we managed to do what was necessary. This client is still with Peraj although globally brokers have kept changing.

Tushar Thakker
Tushar Thakker is the owner of Peraj insurance broker and leads the broker as CEO and Director for more than 30 years. He is well known in the global risk management community and has strong relations to brokers around the world.

About Peraj
Peraj is the oldest intermediary services company in India for direct/retail broker related services. Peraj is a pioneer with 65 years’ experience in the industry. A very high client retention rate reflects the quality of services and the ability to service all lines of insurance. Peraj provides services not just across India but also Nepal and Bangladesh.

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Jonathan Höh

Group Sales & Market Coordination

T +43 5 04 04 396

“You need to have a detailed strategy to succeed in Japan!”

Simon Wallington, Managing Director at the GrECo nova partner Cornes in Japan discusses with Jonathan Höh, GrECo nova Network Coordinator the rise of foreign investment, regulatory issues of insurance and the importance of “hanko” in Japan.

HÖH: What role does foreign direct investment play in the Japanese economy?

WALLINGTON: By way of background, Japan has had less foreign investment when compared with most of the other major developed nations. This is mainly because for a long time, they have sought to nurture and protect their own companies until they were strong enough to trade and compete in the global markets. In some cases, foreign companies have entered the market and then withdrawn once they found the barriers too difficult to manage. For example, eBay Inc who entered the Japanese market in 1999 but had to withdraw in 2002 due to local competition. Fortunately, the situation has recently changed and foreign investment in certain industries is now rapidly increasing.

Japan is potentially a very attractive market for many overseas companies because it has a very large and sophisticated customer base of over 120 million and represents approximately 10% of the world’s economy. However, it is a tough market to break into because Japanese customers can be very demanding, with different tastes and needs requiring overseas companies to redesign or redevelop their products. Examples of this in the past have included cars, mobile phones and toothbrushes.

HÖH: What are the biggest risks that foreign companies operating in Japan need to be aware of?

WALLINGTON: The size of the market requires substantial investment and there is usually fierce competition from long established competitors (depending on the products and industry). A detailed market research and strategy is an absolute necessity to succeed in this country.

In addition, Japan has always been a very bureaucratic country with lots of regulations, permissions, certifications, procedures, offices and authorities requiring approval procedures. These don’t normally exist to such an extent in most developed countries and it requires a lot of patience to navigate through these.

On the physical risk side, Japan is reported to have around 5,000 minor earthquakes recorded per year (more than half measure between 3.0 and 3.9) and around 160 earthquakes with a magnitude of 5 or higher. Having said that, the building construction regulations are such that most of the infrastructure can withstand all but very strong earthquakes. Other natural perils such as flood, typhoons and windstorms are becoming more regular and stronger as climate changes make their presence felt.

HÖH: What are the main facts of the insurance market in Japan? How do the key indicators compare to European markets like the German insurance market?

WALLINGTON: The Gross Written Premiums of 114,818 million USD in Japan are rather low compared to 126,005 million USD in Germany. This clearly indicates that the Japanese insurance buyers do not purchase as much insurance as these other countries, in particular business interruption insurance.

The major lines of insurance include Motor (40.2%), Liability (19.6%), Property/Commercial (18.4%), Marine (4.7%) and Other (17.1%).

Additionally, the market share of the top big 3 Japanese insurers represents 86% of the Japanese premium, indicate a strong concentration and power base in these 3 insurers.

The largest Claims in FY 2018-2019 were natural disasters including eight typhoons totalling 29.3 billion USD/ snowfall 3 billion USD / heavy rain 1.8 billion USD although this is somewhat less than major earthquakes such as the Tohoku earthquake in 2011 which resulted in 15,782 killed/4,086 still missing/128,530 dwellings destroyed & losses totalled 236 billion USD.

HÖH: Can international insurance programmes be implemented? Which special features must be considered?

WALLINGTON: There are literally thousands of International Programmes in place in Japan through fronting policies for foreign companies operating in Japan. As non-admitted insurances in Japan are illegal (apart from marine, aviation, reinsurance and overseas travel), companies must have their global insurers/brokers arrange for fronting policies to be issued by either their licensed subsidiary in Japan and if they have none, then by a correspondent licensed insurer/broker.

Additionally, when purchasing insurance in Japan it should be noted that the Insurance Policy Wordings need to be first approved by Japanese FSA. In addition, the collection of insurance premiums is critical as Japan is a “cash before cover” jurisdiction and the fronting policies are only effective once the premium is paid to the insurance agency such as Cornes. Insurance premiums need to be paid by a policyholder who resides in Japan in Japanese yen and not from overseas parent companies.

Policy wordings are available in Japanese or English depending on the type of insurance and the insurer. The compliance laws in Japan require insurance agents to explain each type of insurance and get the local subsidiary’s ‘sign off’ that they understand and agree to the renewal terms even when the terms are agreed by their head office.

HÖH: What are the first steps for foreign clients regarding insurance?

WALLINGTON: Once, we at Cornes, are advised of a new client and the fronting policy(ies), we introduce ourselves to the local subsidiary’s contact and the fronting insurer(s). We then re-confirm the terms, run through the insurances with the local client representative (as required under Japanese law), raise an invoice and issue the application forms (one required for each policy every year). Japan is a “cash before cover” jurisdiction so cover commences only once we, acting as the insurer’s agent, receive the premium. Every application form requires the client’s registered “hanko” (stamp) and insurers will only accept the originals of these forms before issuing the policy documents although the pandemic and WHF restrictions has meant that some insurers accept copies for the time being.

Cornes Insurance Agency prides itself on its professionalism and we have established a comprehensive servicing and follow-up system in place to ensure we give every client a friendly and professional service. Our incoming business service capabilities are our lifeblood and we insist that all account managers have a minimum level of English. In addition, we currently have two persons who can also speak and write Spanish and one who can write and speak German.

Our insurance license enables us to not only manage the client’s general and financial risk insurances but also assist them with their Employee Benefit insurance needs – two of our account managers used to work for Japanese Life Insurance companies. All account managers are required to pass the Japanese Insurance Agency exams before being allowed manage clients. In terms of our international business experience, we have an average of 10 years per account manager.

Simon Wallington

Simon holds the title of ACII from Chartered Insurance Institute as well as the NIBA diploma that allows him to practice as an insurance broker in Japan. He worked in 3 different countries starting in London as a trainee in 1977 before becoming account manager and then moving to Tokyo in 1985 where he was branch manager at Sedgwick. After just over 5 years in Tokyo he transferred to Sydney where he managed a portfolio of corporate clients. Afterwards Simon joined JLT as Director of Asian Business Development. His role soon extended to include local Australian and European clients, such as major Japanese and Korean corporate conglomerates. Since 2010, after working for InterRISK in Sydney for 5 years, he joined Cornes as Managing Director responsible for all aspects of the Insurance Division.
Email: simon.wallington@cornes.jp
Phone: +81 357 301650
Mobile: +81 804 2004459

About Cornes
The Cornes business was founded in Yokohama more than one-and-a-half centuries ago in 1861 by Frederick Cornes and his partner, William Aspinall. Initially trading in silk and tea, the business quickly expanded to include the import of cotton, metals, consumer goods, coal and other raw materials. The company was also a pioneer in the Japanese insurance market starting with its appointment in 1868 as the first Lloyd’s agent in Japan – a position that is still held today. With the development of its maritime and insurance operations, Cornes paved the way for new services-based industries in an age when business was still dominated by trade in material goods.
The 25 employees in the insurance division located in Tokyo and place over 26 million EUR premiums into local and international insurance markets. The insurance division of Cornes has specialised knowledge and expertise across several industries enabling clients to benefit from tailor made programmes that extend beyond the market’s standard insurance products. They look after over 700 clients with global programmes ranging from property & liability, cyber and D&O to Group Life Insurances working in conjunction with the global brokers and agents overseas.

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Jonathan Höh

Group Sales & Market Coordination

T +43 5 04 04 396

Ensuring compliance of international insurance programmes: Eurasian countries

Before the collapse of the Soviet Union and the declaration of independence of many former CIS countries in the early 1990-years, two state companies had a monopoly for all insurance business. Ingosstrakh wrote all reinsurance and international insurances requiring hard currency and Gosstrakh, sometimes via its branches of the Soviet network, covered domestic risks that could be insured internally.

Since gaining independence, the Eurasian countries have substantially been replacing and modernizing their insurance legislation inherited from the former Soviet Union. However, compliance with local legislation remains complex for multinational companies covered by international insurance programmes.

In general, there are multiple ways to cover a Eurasian risk of a multinational corporation under an international insurance programme. One can purchase insurance locally if the market capacity allows or install a local fronting policy and reinsure the risk to a central capacity provider. Other possible solutions include non-admitted insurance or coverage via a financial interest clause.

Local Market Placements

As in some other post-Soviet economies, insurance spending in % of GDP remains quite low, also impacted by constraints in macro-economic conditions, restricted bank lending, and currency devaluation. This results in market premium primarily depending on the compulsory classes of property and MTPL, supplemented by voluntary premiums across all classes related to the major corporate businesses in the oil, gas, energy, real estate and construction sectors.

However, usually local market capacity is not enough to cover large corporate risks of foreign direct investors. Additionally, the wordings do not match the standard of Western European countries and regulatory complications, such as the required filing of forms with authorities, make local market placements difficult or impossible. Therefore, brokers advising multinationals with business interests in Eurasia try to organize global coverage.

Non-admitted Insurance

Non-admitted insurance refers to placement of risks outside the regulatory system of the country where the risk is located and by an insurer that is not licensed in that country. Non-admitted insurance is not permitted in almost all the former CIS countries because the law provides that insurance must be purchased from locally authorized insurers. There are only some minor exceptions for highly specialized risks such as Marine and Aviation.

One exception is Armenia where a foreign insurer can transact business through its locally registered branch, which does not need to be locally capitalized. While foreign insurers are not allowed to market their products in Armenia without having a local license, anyone can buy, quite legally, a non-admitted policy. This is not market practice, and there might be significant practical obstacles for corporate businesses, such as not being allowed to consider non-admitted insurance premium as tax-deductible, and potentially having to treat incoming claims payments as income subject to local taxation.

When it comes to non-admitted insurance, the requirements of the law appear to be adhered to, since it is difficult to effect insurance other than with the locally licensed insurers in the absence of exchange control facilities for non-admitted placements. However, international firms that operate in the Stan-countries (Afghanistan, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan, Uzbekistan) are likely to arrange most of their insurances on a worldwide-program basis, placing only those parts of their covers with the local markets that they are absolutely obliged to. Technically, this may be strictly illegal under local law in some countries, since even DIC and DIL (Difference in Conditions/Difference in Limits) covers seem to be proscribed. But, certainly in the case of liability master covers, and particularly when neither premium nor claims recoveries are recorded through local accounts, the law is difficult to enforce.

In the strictly controlled economic and political environment, purchasers of non-admitted insurance are likely to face severe penalties for breaches of the law. Another potential solution could be central coverage via a financial interest clause.

Financial Interest Clause

A financial interest clause (FINC) is a provision within a global or master policy that covers the parent company’s diminution of financial interest when losses are suffered by its worldwide subsidiaries. A loss suffered by a subsidiary causes a reduction in the value of the parent’s financial interest in the subsidiary, for which the parent is indemnified under the FINC in its home country.

However, these are the top 4 limitations to keep in mind:

  • First, because the parent is the only insured under the FINC and the subsidiaries are not actually insured, claim payments must be made to the parent and not the local subsidiary that faced the damage.
  • Second, since the local subsidiaries are not the insureds, providing evidence of local coverage to third parties is not possible.
  • Third, any recovery under the FINC is limited to the parent’s interest, while the subsidiary’s actual loss could be greater than the parent’s financial interest loss.
  • Fourth, no premium should be allocated to or paid by local subsidiaries.

Given the above limitations, GrECo believes that local policies are the most secure option facilitating compliance, local servicing and claims payment in most jurisdictions, including the highly regulated markets of Eurasia. To overcome the capacity restrictions of local insurance markets, fronting solutions are the most feasible option.

Fronting

Fronting is a recognized feature in Eurasia for many of the larger risks, particularly those with an international connection, because of the general prohibition of placing non-admitted cover.

In most cases state insurers are the only authorized insurers in the country and should a risk require to be fronted, it would have to be through these companies. Some of the state insurers might require assistance in producing wordings for the more complicated risks but welcome every opportunity for involvement in international risk. This is not only for the premium it produces, but also for the access it affords to product innovations that might be turned to commercial advantage in the indigenous market. In the rare cases where there are also foreign licensed insurers the process is much easier since those are usually set up for this specific purpose.

Fronting, and reinsurance generally, are usually subject to a statutory minimum retention by the cedant, and in certain cases, subject also to a withholding tax. In some Eurasian countries the local law requires (re)insurers or reinsurance brokers to offer a certain percentage of the risk to domestic reinsurers before offering the risk to foreign reinsurers. Reinsurers used must have a good credit rating, usually better than A- or B+ Standard & Poor’s or AM Best. Additionally, the state insurers will require a fronting fee, usually in the range of 2.5% to 7,5%.

GrECo Eurasian Desk

Deciding on how to cover exposures in countries with a very specific and strict local legislation is always a balancing act between central control and local compliance. GrECo can be your one-stop-solution for covering the Eurasian countries, which have a challenging trading environment. We have established a regional entry point to provide top solutions and always deliver our high service standards. We coordinate the business via our Eurasian Desk in Moscow while in the various countries, GrECo has established partnerships with leading local brokers. This way we provide constant servicing and ensure uniform reporting to our clients.

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Jonathan Höh

Network Coordinatoron

T +43 5 04 04 396

Ante Banovac

Head of Group Sales & Market Coordination

T +43 5 04 04 372

“As brokers, we have to be on top of things all the time”

Andreas Schmitt, new member of the board of GrECo, talks about the advantages and disadvantages of international insurance programmes and why it is important to focus on the needs of clients.

SPOTLIGHT: You have been working for an international insurance company for the last 20 years. In your opinion, how will international insurance programmes develop in the future?

SCHMITT: The current pandemic has certainly put a slight damper on globalisation. The question will be whether this damper will have a long-term effect. Therefore, it is not possible to give a general answer to this question, because the development of international insurance programmes depends heavily on the development of companies. In addition, the regulatory framework in individual countries is constantly changing, which makes it difficult to implement a truly international insurance programme.

SPOTLIGHT: What do you currently recommend when advising a client on this subject?

SCHMITT: It is important to deal intensively with the company: How and in which countries is the company positioned? What is the company’s culture, is it centrally or decentrally managed? What are the individual dependencies of the production locations? Who and where are the company’s customers? We then jointly analyse the operational risk. To this end, we draw on the expertise of our risk specialists, among others. Thereafter we check which of these operational risks can be insured, develop an insurance philosophy together with the client and only then can we make a recommendation. In the end, this can be a fully integrated insurance programme, an internationally coordinated insurance programme, a mixture of both, or local solutions in the respective countries. The added value for the client ultimately defines the solution.

SPOTLIGHT: What exactly are the differences?

SCHMITT: With local solutions, each country takes care of its own insurance coverage. The advantage of this is that local management usually has a high level of acceptance because local, individual wishes and requirements can usually be implemented. These wishes and requirements are actually not relevant for the group of companies and are therefore often not included in the international insurance programme. The disadvantage is that each country does what it wants, which makes it difficult to achieve a uniform safety standard in the group of companies. The costs for the group of companies are often many times higher in total, since, for example, the insurance sums have to be made available per country.

In the integrated programme, on the other hand, insurance is managed and purchased centrally by the Group. Where necessary, local insurance policies are installed. The disadvantage: a limited insurance market. The advantage: a uniform security concept and often lower insurance costs overall.

The internationally coordinated insurance programme and the mixed form (e.g. Europe in an integrated programme, the remaining countries with local, so-called non-program policies) attempt to combine the advantages of the two above-mentioned forms, but have the disadvantage that they are rather more administration-intensive.
However, these are only rough indications, there are many more advantages and disadvantages. To know which is the appropriate way always depends – as mentioned earlier – on the company and its positioning, philosophy, etc. Basically we are talking about the decision centrally (fully integrated insurance programme) versus decentrally (no insurance programme).

SPOTLIGHT: Why might it make sense to insure certain risks in one country separately and thus outside the insurance programme?

SCHMITT: Every insurer has a different underwriting policy, i.e. what kind of risks they want to insure and what kind of risks they don’t. Sometimes it even happens that within an insurance group the individual national companies act differently in this respect. An example: Insurance company XY in Austria does not insure a foundry, whereas the sister company in Bulgaria does because it has had positive local experience with it.

SPOTLIGHT: Does the respective market phase of the country also play a role?

SCHMITT: Definitely. Take a current look at Eastern Europe. This market is far from being as well developed as Germany and Austria, for example. It may well be that a local risk is sometimes insured more cheaply than in Austria or Germany – although it must be said that the internationalisation of insurers counteracts this, because that is exactly what the large insurance groups are trying to avoid. It will be exciting to observe this. As risk and insurance managers, we have to keep our eyes on top of things in order to get the best out of it for our clients.

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Andreas Schmitt

Andreas Schmitt

CTO GrECo International AG Risk & Insurance Technique

T: +43 5 0404 270

„Great potential for the insurance culture in Mexico“

Interview with the insurance broker Howden Mexico

Jonathan Höh of GrECo nova (a global network of insurance specialists) spoke with Howden Mexico about major risks facing foreign companies and the specifics of the local market.

According to statistics, Mexico employs 61% of the workforce in the service sector, which accounts for 60.1% of GDP. The technology-, information- and software development-sector in particular is growing due to the good quality of the workforce and low operating costs. But medical services and tourism are also growing faster than in Western countries thanks to low service-costs. In 2018, Mexico recorded a record number of visitors, estimated at 41.4 million according to the Ministry of Tourism.

Although, according to the Mexican Association of Insurance Institutions (AMIS), the insurance sector recorded a real increase of 5.37% in the first quarter of the year compared to the same period last year, the declines were significant in some sub-sectors such as automobile and accident insurance. In addition, a general decline in business of 5.4% is expected at the end of this year or in the beginning of 2021. Currently all companies in the insurance-sector are suffering from the low demand and also affected by reorientations in their business-activities.

HÖH: Can you tell us some of the key facts about the Mexican insurance market?

HOWDEN MEXICO: The insurance culture in Mexico is weak, so the growth potential is very high. Per capita-insurance-consumption in Mexico is low, compared to other Latin American countries and lags behind Brazil, Argentina, Chile, Colombia – and even Peru. It is important to make insurance accessible to the people by developing technological business strategies. A large part of the population does not even know where to buy insurance.

The insurance with the highest penetration is car-insurance, with 30% of the total fleet of vehicles in Mexico, mainly because a significant percentage of cars are bought on credit and insurance is therefore required. Immediately after this comes life insurance, with a penetration of 10%.

HÖH: What are the biggest risks for foreign companies?

HOWDEN MEXICO: The risk for foreign companies is primarily the legal uncertainty and – due to the current crisis – also the economic uncertainty of the country. We also have a considerable risk of natural disasters such as hydro meteorological risks and earthquake risks. Another risk is the high theft of vehicles and goods. And the health-risk should not be underestimated: too high a proportion of the population suffers from obesity.
In 2017, Mexico ranked fifth in the world in terms of losses due to cyber-attacks, with financial institutions accounting for 20% of these losses. Recently, some banks were again the victims of a cyber-attack that caused almost 300 million pesos of damage (editor’s note: approx. 11.5 million EUR). Therefore, one of our greatest concerns is operational-security and that the information of companies offering services or products online is protected.

HÖH: Can international insurance-programs be implemented? And how does Howden Mexico provide customer service, how do you coordinate with the controlling brokers?

HOWDEN MEXICO: Insurance-programs can be implemented for companies that have are a representative office, partner or a branch of a firm headquartered in other countries. In particular, the requirements for quality, service and KPI standards must be taken into account. This requires a structure with a solid, dedicated and experienced support team for large and/or international business as well as representative offices in the countries of the respective regions. Currently, we have established an international business area within Grupo Ordás Howden that largely meets these criteria. Customer service is provided through the signing of a service-agreement, which is reviewed with the customer at least once a month. The coordination through the controlling broker is coordinated through written agreements, emails, telephone and video conferencing.

HÖH: How many years of experience has your team in international customer service?

HOWDEN MEXICO: We created the capacity for the international insurance business two years ago. The team consists of two people, Vice President Arlen Cooper and a senior executive, Perla Hurtado. Both speak English and have years of experience in international business. Arlen Cooper has been in the insurance business for 15 years and Perla Hurtado for ten years.

HÖH: What about the strong automotive sector in Mexico? Do you have proven capacities for this sector, and what specifics have be taken into consideration here?

HOWDEN MEXICO: Grupo Ordás Howden has a large team in the automotive sector. We are leaders in the insurance market here. This year, however, it will be a major challenge for Mexico, which relies heavily on the automotive sector, to recover and reach pre COVID-19 levels.

HÖH: What regulatory challenges are Mexican companies facing? What types of insurance are mandatory?

HOWDEN MEXICO: Currently, Mexico does not have clear and specific regulations, so the biggest challenge is to maintain information security even without these regulations. Since April 2013, the only compulsory insurance that exists in Mexico is car liability insurance.

HÖH: How high is the tax burden in Mexico, and how strongly does it affect the activities of insurance brokers?

HOWDEN MEXICO: Currently, companies in Mexico must pay 30% income tax plus additional 10% of dividends and 10% of employee profit sharing. However, companies do have access to deductions and often end up with lower rates.

Insurance policies are tax deductible. For example, no value-added tax is levied on life-insurance policies. This is an advantage for companies and it is the responsibility of brokers to point this out to companies.

Arlen Cooper I Vice President International
Phone: +55 797 81083, email: acooper@ordashowden.mx

Grupo Ordás Howden
Founded in 1982, Grupo Ordás Howden is a leading company in the Mexican insurance market with strong expertise in all lines of insurance. Headquartered in Mexico City, the company is characterized by a strong client focus, exceptional talent and an entrepreneurial ethos. In addition to expertise in motor insurance, an experienced international desk and industry practices, an impressive technology platform helps to provide even better solutions to customers in many different lines of business.

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Jonathan Höh

Group Sales & Market Coordination

T +43 5 04 04 396

Africa is the fastest growing region in the world

Jonathan Höh from the global network of GrECo nova insurance specialists spoke with pan-African insurance broker OLEA about the conditions in and peculiarities of that fast growing – but largely unstable – region.

HÖH: Why do we often have the wrong idea when we think about the size of Africa?

OLEA: For a long time, Europe was deliberately enlarged on maps to symbolise its power over other continents and countries. This is why Africa appears much smaller than it is in reality. In fact, Africa has a total area of 30 million km². Compared to this, China and the United States each measure just 10 million km².

HÖH: Are you expecting major growth in Africa in the coming years?

OLEA: Africa is the fastest-growing region in the world, even faster than South East Asia. Six of the 12 fastest-growing countries in the world are in Africa. The emergence of a new middle class and considerable improvements in economic governance are two important factors for long-term growth. Logistics is becoming more and more important, as are telecommunications and energy.

HÖH: What are the main risks for European companies doing business in Africa?

OLEA: Aside from the complicated political environment in most African countries, political violence and terrorism must also be taken into consideration. The World Economic Forum identifies the failure of national governments, financial crises and illicit trade as the main risks in this region. Social instability and the provision of resources are also problematic. Energy price shocks and water crises are possible.

HÖH: What does the African insurance market look like?

OLEA: The insurance market is still very immature throughout Africa – with the exception of a few markets like South Africa. Market penetration is below 3%. Ten countries account for 90% of all premiums paid on the continent. However, many markets in Africa are currently making progress in the insurance market. This development is boosted by an active regulatory agenda and reform, as well as by active steps taken by insurers to improve the immature market practices. The commercial insurers benefit from the growth of the energy, electricity and mining sectors and other affiliated infrastructures. M&A activities are rising, as new investors are being attracted to the continent and interregional activity is increasing, especially from South Africa.

HÖH: What special aspects of international insurance programmes must be considered?

OLEA: We are overseeing an increasing number of pan-African insurance programmes at OLEA. As there are different regulations for insurance policies in Africa, compliance with the local standards of each individual market is really crucial. This is a particular challenge due to there being 40 different insurance regulations in Africa. However, it is possible for the share that has to be placed in Africa due to regulatory requirements to be reinsured by renowned international players. The African reinsurers are rated from A- (Africa Re) to B+ (Continental Re). The minimum capital requirements were recently increased from 1 to 5 billion XAF/XOF (approx. 7.6 million EUR) in order to ensure that the insurance companies active on these markets remain strong and solvent.

HÖH: What regulatory challenges are companies confronted with? What insurance policies are mandatory?

OLEA: Insurance policies are increasingly being regulated in Africa. The CIMA code governs insurance in 15 different (mostly francophone) countries. It stipulates that risks of a member country may only be insured with an admitted insurer. The local obligatory shares have also been increased from 25% to 50% in order to keep more premiums in the countries (certain risks such as vehicles or health are retained completely). It is also important to bear in mind that these are “cash before cover” countries. This means that there is no cover before the premium has been paid. In addition to motor vehicle liability insurance that is obligatory according to the CIMA code, the insurance of imported goods is also mandatory. Even if the insurance in Portuguese- and English-speaking countries is regulated differently, these countries are increasingly tending to adopt rules from the CIMA zone (e.g. cash before cover). It also necessary in certain countries like Ghana, Kenya or Tanzania for local companies to utilise the local capacities before taking out offshore insurance.

HÖH: There are more than 50 countries with different languages in Africa. OLEA has established a network of branches and partner companies to cover such a large area.

OLEA: OLEA currently has branches in 24 countries and partners in 12 additional countries. We offer the same service quality everywhere, no matter whether French, English or Portuguese is spoken in the country concerned. That’s why we have appointed a network country manager in each country, who is able to answer all queries in English and is employed to deal with international programmes. We have also appointed a German-speaker as GrECo nova country coordinator to look after and help GrECo’s German-speaking clients.

HÖH: What do you focus on when advising clients and what special skills have you developed?

OLEA: The OLEA management team is based in Paris and consists of approximately 10 people. We know Africa very well and regularly spend time at our subsidiaries in order to understand market developments and the needs of our clients. It is very important for us to have a subsidiary or partner in almost every African country, as the legal environment, the market and the requirements are very different from country to country.

We established OLEA Specialities a few months ago to help our clients with their specific risks, as it is sometimes difficult to find solutions. We also regularly use an IT tool that is unique on the African market and offers our clients and partners access to all data they need to track their portfolio.

Thank you for your time!

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Jonathan Höh

Group Sales & Market Coordination

T +43 5 04 04 396