Is Your Glass Half-full Or Half-empty? World Optimist Day!

World Optimist Day

Optimist Day is a global annual celebration falling on the first Thursday of February. The day’s key theme is focussed on building and sustaining a positive future!

The World Health Organisation says: “Work is good for mental health but a negative working environment can lead to physical and mental health problems”. Furthermore, depression and anxiety have a significant economic impact; the estimated cost to the global economy is +USD 1 trillion per year in lost productivity.

But what is an optimist?

An optimist is someone who has positive views about their place in life and the future. Ultimately, an optimist is more likely to think good things will happen and can see the positive side of many situations, but there are wider benefits too! It is simply a state of mind, about creating new ways of thinking, acting and behaving, but also how we work with and respond to one another.

With the geopolitical and global economic backdrop currently being faced by us all, we have never experienced this level of permanent uncertainty before! We are undergoing times of permanent change. In times of uncertainty and change, being an optimist, all the time is hard. We’re not perfect and have to work on it unless of course you’re lucky enough to be a natural-born optimist.
 
It helps people deal better with the negative experiences, and grow, since they have perceived setbacks as opportunities for growth, as well as protecting against depression — even for people who are at risk for it. An optimistic outlook makes people more resistant to stress!

Optimism and business culture

An optimist is more than someone who just believes things will work out, as they are also people who work hard to build a positive future. Similarly, optimism also makes people have a better disposition. Unlike their cynical counterparts, they offer hope and positivity to the people, which then also helps them forge good social relationships. As humans are social animals, therefore, having better relationships is good for mental health as well.
 
Business culture is a key part of the employee value proposition and, as businesses continue in the “war for talent”, a core recruitment and retention tool! If you have an optimistic team or employee(s), optimism is what allows for sustainable and prolonged growth, and positive workplace culture. It drives successful outcomes for both individual and business performance.

Whereas pessimism will slowly bring people down, create strains on relationships and could lead to a negative and toxic workplace culture – one that contains dysfunctional behaviour, poor communication, and even low morale. This naturally impacts individual mental health and leads to poor Wellbeing outcomes.
 
Poor mental health and conditions such as depression, anxiety and stress, which can lead to suicidal thoughts and suicide, are a growing problem across the globe. The wider impact to family, friends and colleagues cannot be measured.

The impact on your wellbeing

Helen Keller is worth remembering – keep your face to the sunshine and you cannot see the shadows. Maintaining a positive, optimistic attitude to life is the best way to avoid being overtaken by negative, pessimistic thoughts. Optimism has such a significant impact on your mental and physical Wellbeing. Research shows an optimistic outlook carries (certain) advantages, such as better health, greater achievement, less stress, and greater longevity.
 
For me, it is clear – in the current state of the global and domestic economies, Wellbeing and optimism play integral roles in the resilience of our workforce.
 
I definitely take the glass-half-full approach, but when the glass-half-empty feeling creeps in, it provides a chance to stop, think and, importantly, reassess the situation. As an optimist, I focus more on what I have, and what more can be done (with half a glass of water) than seeing that half the glass is empty and will eventually have nothing left in it!
 
Let’s take a moment, every day – not just on February 2 – to think about how we can adjust our state of mind. That half-full glass has lots left in it!

Adam Riley, Cert PFS 

Group Practice Leader Health & Benefits

T +44 (0) 7507 788 144

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GrECo Health & Benefits bolsters its senior team

Preslava Gencheva joins GrECo

Preslava Gencheva joins Adam Riley to further build the Health & Benefits business across the Central, Eastern and Southeastern Europe (CESEE) region.

With its continued success, GrECo has appointed Preslava Gencheva as Deputy Group Practice Leader, Health & Benefits, in a newly created group leadership role. This role further reinforces Adam’s Health & Benefits strategy to become the leading risk management adviser and employer of choice throughout the CESEE region. Closely working with Adam, Preslava will support him in building, developing and the day-to-day running of GrECo’s specialist Health & Benefits business across its 17 CESEE countries.
 
Preslava joins from Karoll Financial Group where, for 14 years, she held several roles, more latterly Commercial Director. In a client-facing role, she successfully developed sales and marketing strategies, efficiencies for sales and operational processes, and managed sales across their 70 offices and 200 colleagues.

Adam Riley, GrECo Specialty, Health & Benefits commented: “We warmly welcome Preslava to GrECo and are delighted she has joined us at this very important juncture in our growth. Preslava is highly regarded and well-respected in our profession, bringing significant experience, insights, and a fresh outlook to GrECo Health & Benefits. We continue to attract high-calibre individuals and top talent, and the appointment of Preslava truly reflects how, as an independent family-run risk specialist business. GrECo is renowned for its people, reliability, stability, and independence.
 
She will play a key part in our growth strategy as the leading Health & Benefits consultancy across CESEE, which further enhances our value proposition for clients, partners, and carriers. I am looking forward to working with Preslava to continue the success of our Health & Benefits business across the CESEE region, and personally wish her every success in this new group leadership role.
 
So, Preslava, welcome to GrECo! Why did you decide to join our company?
When Adam and I started talking, I already knew of GrECo, and seen the business become the leading specialist insurance broker & consultant across the CESEE region. I had also heard in the market about the refreshing new strategy Adam had created since he joined in July last year, as well as the new direction and journey the GrECo Health & Benefits business is headed and knew this was the natural next step in my career!
 
The creation of this new role to help Adam run, build, and develop GrECo´s growing Health & Benefits business is so important as it reflects the demands of clients and employers across countries in which they operate.
 
What do you feel employers are looking for from a H&B partner?
Employers are looking for a specialist consultancy who understands their business, their employee requirements and above all else is seen as their true partner to provide sustainable long-term H&B solutions. Having talked with many HR and Benefit professionals, it is clear Health & Benefits is no longer just about insurance solutions, it is now about developing & providing appropriate risk management solutions for employers, which are both relevant and sustainable for their multinational and multigenerational workforce, now and able to evolve in the future.
 
Employers are expecting much more from their broker – more sophistication, wider knowledge, and are looking for their Health & Benefits adviser to provide appropriate and tailored solutions and delivering true thought-leadership. This is where GrECo Health & Benefits really adds tremendous value!
 
Tell us about the Preslava, outside of work.
I am married, with one son. Healthy living has become more and more important and plays a key part in my family life. For me this is to care for my physical and mental state and, as a family, we practice this through taking part in active sports including snowboarding, paddling, mountain tracking and tennis, and taking care of my mind by reading good books and meditation!

Thanks, Preslava. A final word from you?
Joining GrECo in their next phase of strategic growth is hugely exciting and provides an amazing opportunity to help build and run their Health & Benefits business. I look forward to working with Adam and being part of his team and its future strategy to become the leading Health & Benefits risk management adviser and employer of choice across the CESEE region, further enhancing the value proposition for clients, partners, and carriers!

Adam Riley, Cert PFS 

Group Practice Leader Health & Benefits

T +44 (0) 7507 788 144

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More Procurement & Logistics Resilience for Donau Chemie

DonauChemie-Pischelsdorf-Industriepark

Krystle Lippert, Strategic Sales Manager at GrECo in Austria, has spoken with Dr. Gerald Dums, Head of Purchase of Technical Equipment & Logistics at Donau Chemie AG about supply chain problems and procurement and logistics resilience.

The past years have shed light on the downsides of the very same globalization that has been responsible for stable economic growth for a long time. The consequences of recent negative events are disruptions in trade and supply chains, order backlogs, rising energy and transport costs, and more. Whether earlier events or most recent geopolitical developments, such as the war in Ukraine, nearshoring and so-called “glocalization” are now moving into our focus.

Lippert: Donau Chemie recognised the changing trend long before the pandemic and the supply chain problems that followed suit. Out groundbreaking works for a new plant in Pischelsdorf to expand the product portfolio already began in 2019. It is Europe’s first production plant for amidosulfonic acid. What brought about this decision and which role did short distances play for procurement and sales?

Dums: Short distances in procurement and sales and therefore proximity to customers are part and parcel of our corporate philosophy. Besides the quality and availability of our products, our customers really value our other pillars of success: our personal service, the short response and delivery times as well as our solid reliability.

Because of our customer proximity we knew that the European market cannot provide amidosulfonic acid and relies on Asia for deliveries. This triggered more research and eventually the erection of a new plant in Pischelsdorf. The ready availability of the raw materials and the perfect storage and distribution opportunity on site in Lower Austria positively impacted on the feasibility study.
 
Lippert: Since there are no similar plants in Europe for this core process, there must have been a huge influx of customers during the pandemic, especially since China still grapples with lockdowns. How important is procurement and logistics resilience for your customers?
 
Dums: During the feasibility study, we already received positive feedback from prospective European customers who signalled their keen interest in our idea to erect an amidosulfonic acid plant in Pischelsdorf. Increased flexibility due to shorter delivery times, more reliability and security of supply, no loss of quality due to long sea transport and rapid availability have become increasingly important for our customers, over and above a high product quality and more attention being paid to ecological aspects.

Furthermore, an additional European supplier also increases the procurement and logistics resilience of customers. The recent lockdowns showed the negative impact in a most dramatic way. Within days, goods were no longer available, means of transport became a scarce commodity, container vessels jammed harbours, and transport routes were closed. Customers desperately searched for goods and alternative transport facilities, at times to no avail.
Within weeks, the prices for the “white powder” skyrocketed. Building up new procurement and logistics resilience became the order of the day. The obvious dependence on producers and logistical flows supported our decision to plan and erect Europe’s only amidosulfonic acid plant in Austria.
 
Lippert: What is your experience with international competitors from Asia? How do your customers rate short-term availability vs. price?
 
Dums: The pandemic and the dispute between Russia and Ukraine have shown that the global flow of goods can quickly come to a halt, causing existential crises among customers. In the medium term, such crises will continue to have a significant impact on our world economy and dictate prices. That is why customers have shifted their focus on short delivery distances and a more stable (European) framework. We have used our strength as a local producer to our advantage and continued to provide our customers with important industrial chemicals despite tough conditions. Of course, product prices play an important role but reliable quality, supply security, flexibility, and short delivery distances have become crucial and decisive factors for customers. 
 
Lippert: At the GrECo Risk Day we learned that logistics experts expect the complexity of supply chains to trigger a bullwhip effect. Do you share this view?
 
Dums: Yes, indeed. The global production and transport sector’s current complexity and dependency needs an optimal setting to work. Any change or deviation in the system will cause a ripple effect at all levels. The consequences have already become visible and may hold more surprises in store in the years to come. Planning, transparency, and the implementation of resilient systems coupled with forward-looking management qualities will certainly be helpful.
 
Lippert: If we consider that globalisation and the search for increasingly cheaper alternatives was placed higher on the agenda than local added value and short delivery distances, do you think this behaviour is a conscious decision made by customers or is it rather driven by politics?
 
Dums: The principles of a free market economy and globalisation have undoubtedly contributed to the wellbeing of our society. It has its merits and still applies. However, in my opinion, a critical evaluation and an adaptation to solve the global existential survival crisis – and thus protect our planet – are desirable and necessary. Political decision makers are key in determining the course for future economic areas and the habitat we live in. The creation of long-term sustainable wealth must be our common top priority. The restructure of economic areas, transport routes and supply chains can contribute a lot in this regard. Our project for a new amidosulfonic acid plant serves as a prime example.

DonauChemie-Brueckl

Donau Chemie plant in Brückl, Carinthia

Lippert: Considering Europe’s energy crisis, does Donau Chemie also plan to erect new plants at new locations, and is Europe still an attractive manufacturing market?
 
Dums: Donau Chemie relies on organic growth. Over and above that, we are evaluating possibilities to expand our portfolio – like we did when we decided to bring the amidosulfonic acid production back to Europe – and tap into new markets. Alone in the last two years, we invested about EUR 35 million in our plant in Brückl in Carinthia. We erected a new distribution warehouse and filling facility, a new synthesis with heat extraction as well as a salt treatment facility for solar-dried sea salt.Container ship crews – mostly Asian – were no longer allowed to board or leave a vessel. Container ports came to a standstill, and the entire cycle of transporting and shipping goods was bogged down – until today.
Lockdowns which blocked the global economy ensued. As the restart did not take place simultaneously, the world economy struggled to restore its rhythm. Add to that the war, following Russia’s invasion of Ukraine. While Ukraine has become the main supplier of raw materials and intermediate goods for many industry sectors, the Western world saw itself forced to act by imposing sanctions on Russia.

Sanctions, not only harm Russia’s economy in the medium and long term but which negatively impact the energy supply chains of the Western world in the short term.

About Donau Chemie:

The Viennese based company counts among the largest in the chemical sector. It produces and distributes base chemicals such as clorine, sodium hydroxide solution, hydrochloric acid or calcium carbide, manufactures application-specific compounds, and produces and distributes activated carbons. Donau Chemie products are mostly found in consumer goods in the field of cosmetics, household and technology.

Dr. Gerald Dums

Leitung technischer Einkauf und Logistik Donau Chemie AG

Krystle Lippert

Krystle Lippert

Strategic Sales Manager GrECo International AG

T +43 664 962 40 37

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Gediminas Dauksa to further develop the Transportation & Logistics practice

Gediminas Dauksa GrECo

GrECo Specialty has appointed a new Group Practice Leader for its Transportation and Logistics Specialty.

Gediminas Dauksa will work with all GrECo Group countries to combine and expand the expertise we currently have in the Group. He will lead new projects and engage individually with countries and various teams to grow our presence in this vital industry sector.

Tell us something about your career path?
I have been a logistics insurance broker for nearly two decades. I had the privilege of launching risk management programs for automotive logistics, project cargoes, very thief attractive commodities, and niche markets like oversized cargoes during that time. I also focused on managing and preventing claims. Logistics insurance, for me, is being the first when it comes to innovations, as every case needs a unique approach. It’s being the last to call a day because you never know when you will get the next challenging cargo. It’s about chasing premiums and profits equally and respecting the risk because a simple freight is never simple enough.
 
What are your plans as the new Group Practice Leader Transportation & Logistics at GrECo?
I believe that the GrECo Group provides knowledge from the center of excellence to all group employees, allowing the development of stronger client relationships across the region by developing specialties and practices on the group level. The Transportation and Logistics practice will aim to grow business in the logistics industry. We will achieve that by developing specialty know-how across the GrECo offices, identifying new business opportunities, and aligning the group resources to realize these goals best.

Who is Gediminas Dauksa in private?
When I’m not trying to figure out puzzles of logistics insurance, you can find me sailing. The moment when you leave the harbor, turn off the engine, raise the sail and feel the movement of the boat powered only by nature is magical. Nothing beats a good game of chess during the winter when the sea is harsh. Besides that, I am a long-time supporter of FC Arsenal and McLaren F1 teams.

Gediminas Dauksa

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Geopolitics Shapes the World to Come

Geopolitics Shapes the World to Come

Our multipolar world and its myriad of geopolitical forces presents us and our clients with a vast, multidimensional array of risks. As bleak as this may sound, geopolitics and its impact on energy also offers a number of opportunities.

Poverty, unemployment and social strife

Energy price increases readily translate into increases in consumer and producer price inflation. This prompts households to cut down on spending, businesses to shut down as they cannot sell their products and services at sustainable prices, and rising unemployment levels perpetuate the vicious circle of recession and inflation. 

What may be seen as healthy belt tightening in affluent countries of the Western world, can in lesser developed countries reduce access to food supplies, electricity or running water.  Eroding living conditions could lead to large-scale social unrest and profound changes on the political scene, challenging international relations and shaking the world order even more then currently experienced.  Energy supply has been used by countries such as Russia as a vector for power projection for many years now and is currently used as a weapon of war not only against any single country, but to challenge the global status-quo.

Climate change

Assuring the security of energy supply requires rearranging existing energy production and delivery infrastructure around the world to reflect the new geopolitical reality.  Whilst in the long run it may bring about much coveted decarbonization and decrease in greenhouse gas emissions, in the short and medium term this would require increased levels of production and shipping of raw materials, energy carriers, parts and equipment virtually around the globe to build the requisite infrastructure.  This, in turn, means increasing the carbon footprint and global pollution, degrading the environment and accelerating the climate change processes.

Business risks

An increased volatility of energy prices (and resulting volatility of virtually all price indices that are impacted by energy prices) means increased levels of business risks for all entities undertaking any kind of business activity.  From oil traders through manufacturers to crop farmers, everyone can suffer or benefit from this as the maxima for both upside and downside will increase. 

This development will increase the demand for risk management services and all kinds of hedging or risk transfer instruments.  To some extent, this will require the assistance of modern technologies, such as artificial intelligence and big data. 

Energy asset prices

If the increases in energy prices are not a temporary feature but are there to stay (which might also result from factors other than geopolitical forces), it follows that price of assets used for energy generation, transmission and distribution will increase as well to in line with cash flows, they generate until a new cost-benefit equilibrium is reached.  The side effect will be increased competition for raw materials, parts, equipment, services and labour as everyone will be rushing into the energy sector to benefit from rising asset prices.  This effect can already be seen to a large degree in the field of renewable power generation and storage.

Technological advancement

The challenges of energy security in the light of global geopolitics, compounded by the demands of decarbonization to thwart adverse climate change present a vast spectrum of opportunities for innovators who can advance new technologies in energy production, delivery, storage, management and saving.  Whilst the invention of a breakthrough technology that could be deployed on a large scale to change the way the entire world operates is unlikely (although not impossible), there is a lot of room for incremental advances that, given increasing energy prices, will make research and development expenditures worthwhile for successful entrepreneurs.

Global development

It is estimated that the global scale decarbonization effort requires capital expenditures worth USD 1 billion every day until 2050.  This does not include the cost of responding to geopolitical challenges which, as far as energy is concerned, have been briefly outlined above.  This presents a huge challenge for business, governments, financial institutions, and individuals who all form a kind of global labour force tasked with making this change happen. It also offers tremendous opportunities for growth and development, for making the world a better place, more prosperous and healthy, and one that can offer more benefits to more people. 

GrECo – Making change happen

Geopolitics will still be a major factor impacting global energy markets and energy security across the world. However, if the world population manages to turn these challenges into opportunities, then increased prosperity and improved distribution of wealth across the planet could turn geopolitical forces into everyone’s favour. 
 
As all these processes will be impacting the global risk landscape in a major, perhaps unprecedented way, the years to come will be a challenging and hopefully rewarding time for the risk management and insurance community worldwide.  Our role during this time of change in the global economy and technology, prompted to a large degree by energy geopolitics and climate change, is to help make the transition process smooth and predictable to the fullest extent possible for those entrepreneurs and institutions that will be responsible for making this change happen.

Pawel Kowalewski

Practice Leader Power & Renewables Division

T +48 507 085 066

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The Perfect Storm – Managing the Geopolitical Shift in Construction

perfect storm - construction insuance

With the aftershocks of the pandemic, the ripple effects of the Ukraine war, and more frequent and severe natural catastrophes that affect our climate and today’s population, we are at a crossroads, and the construction sector is no exception.

In the wake of the Ukraine war and the world-wide vulnerability experienced during the Covid pandemic, priorities have changed. The pandemic and its economic effects disrupted our traditional understanding of what is a given and what is to be expected. It also accelerated what the common world view may have thought probable or even possible.  When the Ukraine war erupted, it revealed the believe that economic competition would remain the main battleground in our world.

All the while, the voices proclaiming that mankind had chosen a path that is neither sustainable nor compatible with the resources available would not fall silent. Nonetheless, seals and certificates distinguishing low energy, low emissions or sustainably produced products have gained increasing acceptance.

Construction challenged by sustainability and supply chains

In terms of the United Nations’ 17 sustainable development goals, urgent action needs to be taken to combat climate change (goal number 13). Is it just another empty resolution or is there more than meets the eye? The ESG framework has been called into life as a way of assessing companies’ environmental, social and governance performance. It takes a close look at the value creation chain from raw material extraction to the final product and incorporates circular economy principles of reusing resources where feasible. The construction industry is caught in the middle of it all.

Increased cost of materials and energy, rising inflation and a shortage of skilled and unskilled labour pose an unprecedented challenge to an extremely fragmented industry. Its big players often choose to subcontract the majority of their project work. Hence, the availability of subcontractors, the flexibility of their workforce and the accessibility of products and materials are key to even get started.

The pandemic and the Ukraine war have both shown how fragile optimized supply chains are. While efforts were made to optimize costs, maintain quality, and sustain just-in- time principles, companies had to grapple with reduced resilience as a side-effect. 

While resilience is essential, the disruption of life – at least in Europe – had an immediate effect on the construction industry, highlighting several areas of concern.

Where is the workforce?

Human resources became scarce. The workforce that used to be able to simply cross borders was no longer available. Travel restrictions were in place – whether due to the pandemic or the war – and many Ukrainian men went back home because they were enlisted in the military. This added to the problems which employers in the construction industry already experienced before the war.

Then there is the psychological effect. Investment decisions are heavily influenced by trust in a stable and predictable environment. Assumptions in financial models, allocation of resources and long-term commitments are all made against the background of expectations of how the world could look tomorrow. The new reality challenges decision makers in that they have to acknowledge that developments thought of being unlikely or just theoretical are realistically after all. Increased tensions between NATO and Russia ignited by a war in the middle of Europe were not something that would figure as a concrete threat scenario in many business plans. It will take time until trust and understanding of the changed dynamics settles in.

Shifting trends in supply chains


The global supply and value chain for construction materials can be divided into four distinct stages:

  • raw materials
  • material production
  • retail and
  • end users

Large companies dominate each step and assert their power, especially in the retail phase. The producers of raw materials are mainly global giants and very large aggregate mining providers who offer their large-scale production to leading international construction companies.

Their business must tackle the challenges posed by a construction materials market that is increasingly exposed to events around the world. Hence, the focus is shifting to reshoring, nearshoring and friendshoring.
As military conflicts, increased regulation, trade wars and inflation continue to present new risks, these supply chains will also have to adapt.

The cost of it all


Soaring energy prices, despite having already increased before the Ukraine war, exacerbated problems for the construction sector. Many of the materials used in contemporary construction are based on an energy-intensive production, with steel and cement being only two key examples. In addition to these highly relevant input factors hampering production, the construction operations themselves are equally affected, compounding the effect.

On top of it all, inflation leads to rising construction prices. This makes even public infrastructure authorities reconsider their investment plans in the hope that lump sum contracts or at least partly guaranteed contracts become available again.

Optimism prevails


While the above may seem to draw a gloomy picture, this is not the sentiment perceived in discussions with market proponents. A shift in priorities and a more acute awareness for the changing environment, coupled with necessary steps that need to be taken to move forward prevail. The focus is on productivity and increasingly also on sustainability. What seems to dominate the industry is an unwavering getting-things-done mindset despite the knowledge that there is change on the horizon which is approaching faster than expected.

Richard Krammer

Group Practice Leader Construction & Real Estate

T +43 664 810 29 63

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Embedded Insurance Gives People Peace of Mind

Embedded insurance solutions

The biggest problem of the insurance industry today is the fact that the sales of an insurance product are separated from the sales of the core product or service that the insurance is associated with.

As a consequence of such “separate sales”, the insurance product is often rejected by customers as an unappealing hassle, causing a huge gap in protection in the end. And, due to market changes in terms of digitisation, climate change and lack of innovation, this gap is just getting bigger and bigger.

Buying insurance online is still a major issue for most customers because of the complexity involved. That is why most insurances are still sold offline. True, customers research online but cannot make a purchase online.

Closing the gap with embedded insurance

One solution is to embed the insurance into the digital service offering. This means offering the insurance on the spot, when the need is there and when the risk is a top priority for the buyer. Embedded insurance bundles the insurance coverage or protection while the customer purchases a core product or service. The insurance is no longer sold separately to the customer, but it is provided as a standard feature of the core product or service. The customer thus gets a more affordable, relevant, and personalised insurance when its needed most.

Looking ahead in volatile times

If we look at what happened all over the world recently, what is currently happening and if we are wondering what will still happen, we will agree that we are facing massive, serious, and stressful life events. Whether the Covid-19 pandemic, the war in Ukraine or a potential blackout crisis – events like these hit us physically, emotionally and financially. Consumers all around the world have felt it and continue to face extreme consequences. Many have lost their jobs and many are tackling with a decrease in income.

Events like these dramatically change consumers needs and preferences, making them more open to new, innovative products and new ways of purchasing products. More importantly, customers now want to reach for simple and affordable products with obvious, yet strong value propositions.

Consumers are looking ahead, they are trying to plan and find ways that will protect their life, health and well-being. They want to be better protected, just in case they must deal with a new crisis. They have become proactive rather than reactive. Insurances that will cover their hospitalisation expenses, life insurances with an emergency funds availability or protection of their income is what they are now focusing on.

They are looking for innovative products, embedded solutions and new ways of insurance distribution. Consumers expect the insurers to understand their needs and satisfy those in easy, direct and most affordable ways. They want insurers to help them feel somewhat normal again and provide them with new ways of engagement.

The role of embedded insurance

Embedded insurance helps customers when they need it most. It provides them with the possibility to protect their lives, their health and their lifestyle at the right point in time.

One example is an electricity company that decided to offer customers a free-of-charge bill protector insurance that covers customers’ electricity invoices in case of unemployment or a work inability.
They found a way to show their customers that they care and that they are there to help when things get rough. They also show them how much they appreciate their loyalty. This is exactly what customers expect during volatile times.

Embedded insurance can help people recover from the stress of the pandemic, the economic effects of the war and other serious life events by adding great value and combining it with great insurance solutions via new distribution channels and new ways of customer engagement.

Sources:
https://www.ey.com/en_gl/insurance/how-can-insurance-protect-the-customers-who-need-it-most
https://www.micglobal.com/reasons-why-embedded-insurance-future/
https://medium.com/digital-diplomacy/embedded-insurance-cbc408ebfb7
https://www.albion.vc/blog/why-we-are-excited-about-embedded-insurance-2021
https://www.linkedin.com/pulse/embedded-insurance-3-trillion-market-opportunity-could-simon-torrance/

Alma Ribanovic

Group Practice Leader Affinity

T +43 664 962 40 17

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Geopolitics and Energy are Closely Intertwined

For the past years and certainly since 24 February 2022, we have had many opportunities to witness the power of geopolitics, its decisive impact on domestic and international politics and the supply of energy throughout the world. 

The geopolitical flow of energy

As far as the sources of energy are concerned, we must take a closer look at their primary and secondary dimension:

Primary sources of energy are those that are extracted (such as natural gas) or captured (such as solar energy), whereas secondary sources of energy refer to the products that derive from the transformation of primary sources.   Electric energy is a typical secondary source as it is the product of transformative processes such as controlled combustion of natural gas in a thermal power plant or conversion of solar energy into electric current within a photovoltaic power panel. 

Then there are the facilities that ensure the production and supply of primary and secondary energy – for example, refineries, power plants, electricity grids for transmission and distribution.  The infrastructure for production and delivery must be built and maintained in good order.  This requires parts and machinery to be produced from raw materials, most of which are available only in certain parts of the globe, and which need to be extracted, processed and shipped (often through many different countries) to factories (some of them being located in other parts of the world) and then transformed into OEM parts and equipment, which are shipped to the final destination (crossing once again many state boundaries). 
 
This constant flow of various forms of energy, raw materials, intermediate products, parts and machinery as well as the security of energy is dictated by physical and human geography – and its barriers.

Case in point: Coal vs. Clean Energy

An interesting example is Europe’s import of coal on a mass scale.  Under immense pressure from the European Union, financial institutions and a vast number of generously bankrolled activist pressure groups, many governments decided to scale down coal production, effectively not allowing any investment in developing new production infrastructure.  As with most extractive industries, the lead time from the investment decision to commencement of commercial operation is several years, especially when public procurement is required. 

Russia’s military invasion of Ukraine prompted a sharp increase in wholesale gas prices (approximately by a factor of three within several days). The ensuing uncertainty then prompted an increased demand for coal (a natural gas substitute for heating and power generation) both from businesses and private households as the demand could not be met by the decreasing domestic production. 

At the same time, several widely used coal transport routes become inaccessible because they originated in or passed through Russia or the war zone in Ukraine.  Wholesale coal price indices rose sharply as a result of skyrocketing global demand and contracting supply. For example, the ARA index often used by EU traders rose by about 140% in seven days since 23 February 2022 and in December 2022 traded at approximately a 30% premium from that day. But that was just the beginning. 
 
The additional demand from Poland alone, estimated at around 10 billion metric tons in 2023 (the equivalent of around 170,000 Panamax or up to 50,000 Capesize carriers), is putting significant stress on the existing transport infrastructure, including seagoing vessels, inland transit carriers, port terminals, transhipment and storage.  This infrastructure is generally finite and cannot quickly be scaled up: for example, there is a limited number of available dry cargo vessels or sea terminals capable of unloading and handling large amounts of coal. 
 
As is always the case, the vastly increased global competition for finite extraction and transportation resources translates into price increases and high levels of volatility until a new equilibrium is reached.

The security behind energy supply security

As far as the security of the supply of energy is concerned, we must consider two aspects.
 
First, there is the physical availability, which in simple terms answers the question whether a requisite amount of energy can be delivered to the destination in the required form and quantity.  For example, in December 2022, a large part of Ukraine was deprived of electric energy because both power plants and the delivery infrastructure (transmission and distribution grids) were, to a large extent, destroyed or captured by Russian military. 
 
Second, even if physical availability can be assured, the cost at which energy can be obtained by end users can be very expensive, making the use of energy either uneconomical (for businesses that cannot pass on increasing costs to end users) or adding an undue burden on the cost of living, eroding living conditions, causing poverty and social unrest which, in the end, might bring about political changes both locally and on a large scale.  For example, because of the Russian aggression against Ukraine, the Western world is moving away from purchasing and using Russian hydrocarbons. The resultant sharp increases in market gas prices through 2022 have caused many energy-intensive businesses across Europe to fail or to temporarily scale down production, as has already happened to the fertilizer industry.
               
Because of complex value and supply chains linking geographically remote points of production and delivery of energy to the end user in requisite form and at acceptable cost, the entire global energy system is subjected to forces that themselves are the product of many geopolitical vectors.  Notably, the situation in Ukraine has not only negatively affected the energy security and energy supply in many countries, especially in Europe, it may also cause profound ripple effects in the entire world.

One of the victims of rising energy prices is the fertilizer industry. The concentrated production of fertilizers and its increase in prices will eventually affect food production around the world. In the short term, this will lead to possible food shortages.  Add to this the limited number of crop exports from Ukraine (before the war Ukraine was the world’s major producer of foodstuffs) which could have far-reaching effects in poor countries that rely on cheap imports. 

Bleak future?

What seems to be a local event might easily have global consequences and energy, being the equivalent of the pulsating human blood stream, is the means that can spread and exacerbate negative consequences around the globe.

Pawel Kowalewski

Practice Leader Power & Renewables Division

T +48 507 085 066

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Sustainability Reporting – is it Fact or Fake?

Sustainability Reporting - Fact or Fake

In recent years, companies have increasingly been publishing ESG reports and providing interested readers with insights into their strategies, objectives and measures. If one compares such reports, it is noticeable that there is no uniform procedure for preparing the report and there is often no information on the data basis and the standards applied.

Thus, some readers of such reports probably also ask themselves whether there are any regulations for this or whether the data have been checked in any way.

Status quo in recent years

In Austria, for example, only large corporations are currently required to publish a non-financial statement in the management report. The requirements for the content (regulated in the so-called NaDiVeG) are very general and include, in addition to a general description of business activities, the topics of the environment, social issues, employee concerns, respect for human rights and the fight against corruption. The most important non-financial performance indicators have to be reported. The Supervisory Board and the members of the Board of Management are responsible for reviewing this data; the auditor merely confirms the existence of the report. For the type of data determination and the scope of reporting, reference is made to various frameworks, such as the GRI (Global Reporting Initiative), but there is no obligation to apply them.
 
Another type of report are the so-called environmental statements. These are prepared by companies that participate in the EU’s voluntary EMAS (Eco Management and Audit Scheme) system. These reports usually focus on the topic of environmental protection and are checked and verified by so-called environmental auditors according to specified procedures and contents.
 
Some companies also publish information on their greenhouse gas emissions, e.g., related to the product or the site. This data is often – though not always – verified by independent third parties. This can be recognized by the reader of this information by the fact that there is an “assurance statement” in the report in which the verifier confirms that the data has been determined in accordance with a standard (e.g., ISO 14064) as well as correctly.

Uniform EU regulation from 2024

The new EU Corporate Sustainability Reporting Directive (CSRD) will set new standards in the European Union from 2024. Not only will the scope of application be gradually extended from large corporations to small companies, but also.

  • the scope of the report is specified in more detail,
  • a uniform digital reporting format is introduced, and
  • an obligation to have the reports audited by external third parties.

Standards for the type of data to be reported and the collection are also to be defined by the EU in the course of 2023.

Conclusion

Not all sustainability reports are the same – source information and audit status are currently not easy to identify, there is a lack of uniform regulations – there are therefore major qualitative differences in terms of professionalism and orientation. More transparency can be expected in the future.
 
GREG’s experts will be happy to support you in designing and optimising your sustainability report and the associated data management.

Sabine Bradac

Sabine Bradac

Risk Consultant GrECo Risk Engineering

T +43 50404 896

Johannes Vogl

General Manager GrECo Risk Engineering

T +43 664 883 805 04

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The New Focus on Talent

focus on talents

Digital transformation, demographic change, increasing complexity and a global virus are leading to a continuous process of change. For those responsible for Human Resources, this situation brings new opportunities and challenges.

The need for highly qualified employees is growing. Aging teams in digitized work environments are increasingly creating skills gaps. Recruiters are no longer required to select ideal candidates for filling critical positions from a flood of applications. Those times are in the past. The tide has turned, the recruitment processes are more about arousing the applicants’ interest in the company with the help of employer branding activities.

Talent Identification and Management

The magic word is talent. But how do companies succeed in attracting talent? 

Let’s start with the meaning of the word. The term talent can be represented in different ways. What is undisputed is certainly the expectation of talented people to make a valuable contribution to the company’s success. Talents are mostly associated with people outside the company. 

But what about those talents who are already part of the organization and whose potential is (still) undiscovered?
In the “War for Talent”, HR strategies are based on three key factors:

  • Recruitment
  • Education and Development
  • Retention

The relation between looking after current employees and attracting new talent shows what makes a company the workplace of choice, which key factors are necessary for this attractiveness, and how companies differ from the competition.

Learning and Development

Professional training and individual development, flexible career paths and a broader range of tasks are of great importance to the new generation of employees. Attractive employers, therefore, offer a learning and development strategy that integrates learning into the workplace and draws individual learning and development paths.

We believe that GrECo is a great place for great people, where every employee has the chance to learn and work independently and bring in ideas. We developed a sophisticated internal learning and development programme, because we know that lifelong learning is a major factor for new generation of employees.

Learn more on our Careers page.

Employer Branding and New Work Culture

More and more applicants are screening potential employers for their commitment to climate protection, diversity and inclusion, ethical decision-making, and sustainable finance. Generations X, Y and Z in particular, are looking for ways to contribute to change with their work and are increasingly opting for companies that live their Environmental Social Governance (ESG) responsibility and present it transparently.

A realignment of the corporate DNA is therefore based on social responsibility and the creation of sustainable and secure jobs. This requires a work culture that puts people first, even in the time of digital transformation.
The workplace of future needs basic conditions that create space for new things, promote a culture of mistakes and feedback and stimulate social exchange to enable innovation and creativity. Companies need to keep that promise they make in job interviews, on social media and in publications, and remain authentic in their stories.

Gabriele Andratschke

Head of Group Human Resources

T +43 664 962 39 18

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