New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change.

Agriculture serves as a crucial foundation for the food supply chain in every society, playing a pivotal role in the subsequent processing and distribution of food.

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change. We delve into the forthcoming EU regulations, explore
advancements in the insurance sector, and observe alternative risk and insurance solutions.

Efficiency and effectiveness are paramount in ensuring the success of this industry. While digitalization offers numerous advantages, it is imperative to address the potential cyber exposures that arise from relying on this technology. Additionally, the risks of employee misconduct and third-party criminal activities can significantly impact the financial stability of any Food & Agriculture enterprise.

Maksym Shylov

Group Practice Leader
Food & Agriculture

T +48 22 39 33 211

Related News

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more …

Webinar “Climate risks in Food & Agri industry”

In our recent webinar “Climate Risks in Food & Agriculture: Compliance With New European Regulations, Risk Assessment, Mitigation and Alternative Risk Transfer” we shared information about the new EU regulations and requirements in the area.

GrECo Group and AXA Climate have conducted the first mutual webinar on climate risks concerning EU regulations, adaptation and insurance. More than 50 participants attended this event.

Hu-Ann Pham, who is the Head of Industry Adaptation at AXA Climate introduced current European regulations and requirements related to physical climate risks and talked about how to adapt industrial assets in food & agriculture to climate change.

Lucile Dauger, who is the Agri-Product Manager of AXA Climate, presented how companies in food & agriculture can be better prepared for ongoing and future climate changes.

Maksym Shylov, GrECo Group Practice Leader in food and agriculture, outlined the main ways to insure weather risks, and crop and parametric insurance in particular for agriculture and the whole food supply chain.

You can find the full webinar recording on our Youtube profile.

Maksym Shylov

Group Practice Leader
Food & Agriculture

T +48 22 39 33 211

Related News

Meet our client: The OMME Hungarian Beekeepers’ Association.

Zsolt Varga, Hungarian Practice Leader for Food & Agri caught up with Péter Bross, President of OMME, to discuss their latest policy and why it is unique to them.

Varga: Please can you tell us a little bit about the OMME Hungarian Beekeepers’ Association? 
Bross: The OMME is a professional beekeepers association. We have over 14,000 members, consisting of local SMEs and private entrepreneurs producing honey. We represent and support our members in many ways from providing advice and best practice to guidance and help to participate in projects financed by the EU and Agricultural Ministry of Hungary, such as buying new equipment and medicines for the bees, and fostering mutual marketing campaigns.

As an association our situation is unique because we represent so many private individuals who in theory should have their own individual insurance policies. But we wanted to offer our members another insurance option, insuring their risks as a collective.

Varga: What sort of insurance needs do you have?
Bross: Initially we required only a liability insurance scheme for our members.  As a professional beekeeper organisation, we felt it was important to provide appropriate assistance to both the injured party and the beekeeper in the event of damage to the beekeeper’s business. We are also working to improve the relationship between the public and beekeepers, and insurance plays an important role in that.

More recently we have invested in a property insurance scheme, which will be launched this year. We took this decision partly because of our positive experience with GrECo and partly in response to the increasing number of cases of damage experienced by beekeepers. Our weather is becoming more and more volatile, with more frequent periods of severe drought and floods caused by sudden and heavy rainfall. In 2022, several apiaries suffered major losses that could have been mitigated with the correct insurance in place. Our latest insurance policy cannot be privately bought from any insurer in Hungary.  It’s unique in Hungary, and indeed in Europe as a whole, because it insures all of our members en masse against risks brought about by climate change and also against the bees being killed by the ever-increasing use of pesticides or other such chemicals.

Varga: Was there any resistance from your members or from the General Assembly to providing insurance?
Weber: I am the International Director and I work diligently with my team of 12 in the international division. My role is to work closely with our international partners and in-house brokers and risk managers to tailor solutions for their specific needs, supporting them throughout the whole process. We distinguish ourselves by providing excellent customer service, which has secured us ongoing relationships with some clients for over + 60 years!  It has also meant, over the years, that we have been able to increase both personal and business lines.  We focus on always providing our clients with a wide range of integrated services which solve their problems, offer the best solutions, and the best cost-benefit without sacrificing quality.

Varga: Is it costly for your members?
Bross: Quite the opposite.  The financial burden for our members is low.  With the two insurance programmes, it only costs each beekeeper on average 10 Euros per year.

Varga: So how does the insurance policy work?  How do you prove whose bees did what?
Bross: That’s the tricky part.  As with all insurance claims, each one is unique, and this is particularly true in the beekeeping sector because it is a very specialised type of livestock.  It is extremely difficult to determine whose bees caused the damage, because, for example the bees do not have any unique markings and can’t be restricted to property boundaries.

When we do experience an incident, the beekeepers report it to our central office and our county advisory network helps with the submission of claims.  This then gets passed on to the experts at GrECo who liaise with the insurance company and follow each claim through to the end. It’s a remarkably smooth process.

Varga: Can you provide us with some examples of incidents that your members have faced?
Bross: Unfortunately, there have been many.  In terms of liability cases, last year a hiker was attacked by bees. She was stung several times and broke her glasses while fleeing. Our liability insurance didn’t just cover the injuries, but also the damage to her personal property.

Another memorable case was a bee attack on an ostrich farm, which resulted in the death of several birds.  It was an interesting case because they are exotic animals worth a princely sum.  Despite this, the insurance company still settled the claim. The following year, the problem happened again. However, thanks to successful mediation, the damages were settled amicably for both parties.

And, in terms of property claims, we have already experienced claims for damaged property due to gale force winds. But it’s not just the weather causing issues for beekeepers. On New Year’s Eve, revellers broke into an apiary and destroyed several hives. Naturally, a police report was filed, and within 30 days, the insurance company paid for the damage.

Varga: Is there anything else you’d like to add?
Bross: Successful claims such as these have really opened the Association’s eyes to the need for insurance for our members, where previously it had been strongly felt none was needed. We think, we have found solutions to the most common beekeeping damages. We are thrilled such a unique insurance programme could be established in Hungary and we hope that we can serve as a good example for beekeeping organisations in neighbouring countries, and anyone else in need of out of the ordinary insurance policies.

Natalia Zaborovska

Péter Bross

President of OMME

Natalia Zaborovska

Zsolt Varga

Practice Leader for Food & Agri Hungary

T +36 20 292 33 73

Related Insights

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read More …

Five reasons why you should be using drones to help your agri business optimize precision farming

Are you using drones in your agri business yet?  If not, here’s five reasons why you should be.

Farming today looks incredibly different to operations twenty years ago.  Gone are the days of guessing weather patterns and crop yields.  Over the years we have seen the modern farmer utilising technology to his/her advantage to provide a more efficient farming process.  Today, drones are playing a major part in modernising farming further and proving to save farmers money by increasing the efficiency of their farming methods, boosting their crop yields, improving their sustainability, reducing their risks, and providing more accurate data for their insurance companies should they ever need to make a claim.

Are you using drones in your agri business yet?  If not, here’s five reasons why you should be:

 
1. High-resolution images for precision farming

Precision farming is key nowadays and drones are proving to be a very valuable tool in helping farmers to achieve their precision farming goals.  Agri businesses often need to create accurate aerial imagery of a specific area and using drones is an extremely cost-effective, fast, and unquestionable way to achieve this.  A drone’s high-precision GPS enables you to photograph the same area over time (hourly, daily, weekly, monthly) simply by programming the exact co-ordinates for the spot you want to study.  The drone’s software then splices the images together to create a highly accurate, invaluable orthophoto.  This birds-eye view will provide you with insights about subtle changes to your crop quality that you might not be able to see at ground level, as well as conditions that are often not visible to the human eye, such as pest infestations, water stress and fertilizer needs.

 
2. Precise spraying with drones

Drone usage is not just about taking photos and footage to forewarn farmers of changes to their crops.  Many in the agricultural industry are using drones to spray crops, typically in areas where it would be difficult for machinery to do the job.  Drones are used in this way to complement rather than replace traditional spraying methods whilst improving your sustainability. Their accuracy and efficiency in this capacity is phenomenal thanks to the use of sensors which can identify not just the plants you want to spray, but the specific parts of the to be sprayed. This precision means less money spent on spraying crops that don’t need spraying, and less of an environmental impact on nature living in your fields.

 
3.  Beyond liquid sprays: application of granular materials

A drone’s use goes beyond the spraying of fertilizers and weedkillers too.  Those in the know are using their spraying drones to reseed grassland, spread granular fertiliser, feed aquatic animals such as fish and shrimp, and many more uses besides.   These jobs can be done remotely and autonomously, saving you more time and money.

 
4. Exact damage assessments

At a time when extreme weather is causing many problems for the agricultural industry, drones have proven to be a god send because they can be used to accurately assess the damage caused by different natural forces. The advanced sensors built into drones can estimate the extent of the damage caused by wildfires, storms, or other natural incidents, as well as use machine learning to estimate the number of missing or damaged crops.  This means you can correctly assess the economic impact of any climate-related incidents and plan a precise replanting workflow for your crops.  This data is also useful for any insurance claims you may have to make.

 
5. Environmental health assessment with drones

Drones are also able to help you with your sustainability footprint and reporting.  You are now able to use them to not only precisely monitor how each operation is progressing in your fields, but also to assess the impact of your operations.  Thus, enabling you to draw concrete conclusions and continuously refine your farming methods for a more efficient and sustainable outcome. In many situations, studies like these have revealed things farmers hadn’t previously thought would affect their yields.  For example, drones can be used to test water in irrigation ponds, identifying potentially harmful bacteria or chemicals before watering the crops.  They can also monitor irrigation systems for any potential leaks before it becomes an issue for crops.

Whatever the nature of your farming business, if you’re not already using them, drones are undeniably one of the next steps for you to consider revolutionising your agricultural practices and management.  They are timesaving, money-saving, sustainability-enhancing, and provide invaluable data for both you in your everyday farming practices, and your insurance company if you ever need to make a claim.   Just don’t forget to insure your drones!

Natalia Zaborovska

Zsolt Varga

Practice Leader for Food & Agri Hungary

T +36 20 292 33 73

Related articles

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more…

Does the Food and Agriculture Industry Really Need Commercial Crime Insurance?

How to calculate your products desirability and evaluate your commercial crime risk.

Imagine, if you will, that you are a poultry business.  Your product is highly desirable: chicken is the most widely bought meat globally.  Have you ever thought about how easy it is to steal poultry?  It is an extremely portable product and due to the nature and volume of sales it is surprisingly straightforward to steal.  A faked invoice or paying-off the warehousemen or guards on the gates of the processing plant will allow a thief to drive right up to the plant and collect their haul.  From here, it is very simple for your thief to sell-on your product.  People want poultry products and whilst cheap poultry may raise a few eyebrows, it is unlikely people will turn down the opportunity to buy cheaper food, particularly in the current economic climate. Selling on a stall at a food market or arranging with a retailer to buy the products is an easy route for your criminal to take, especially as the police are less likely to question the sale of chicken in these environments.

 
Assessing the desirability of your products

Agribusinesses deal in the most stolen goods worldwide bar cash and, as a result, the sector has seen numerous large losses worldwide – predominantly in basic food stuffs such as milk, meat, bread, and cereals rather than finished products.  Employees working together with outside groups can cause large losses incredibly quickly. So, how do you calculate the desirability of your product to a commercial criminal?  It is a straightforward process of analysing how desirable, portable, and saleable your product is.  If you can answer yes to these three questions when considering your product, then you are at a high risk of being a target for commercial crime.
 
Desirability – Do people want / need your product?
Portability – Is it easy to steal, especially in large volumes?
Saleability – Is it easy to sell and would it attract attention to the seller selling it?

 
Which employees are the most likely to commit a crime?

There are several ways businesses could be exposed to crime, both from within the organization because of employee infidelity and from third parties.  With every employee comes a plethora of risks that a business opens itself up to.  From an addict or an employee caught in a compromising situation, to dishonest staff members who want to defraud the company for a share of the profits, there are endless possibilities of how your teams can put your company at risk and the losses incurred are not covered by your standard property damage or business interruption insurance contract. So, what should you look out for?  How do you know who is likely to steal your products, or partner with criminals to rip you off?
 
Employees with addiction issues are a prime concern for any organisation, and not just because of their decreasing performance levels.  They start out not wanting to commit fraud, but their addiction rapidly turns into a problem for the employee. Typically, they will have a drug, alcohol or gambling issue and will ‘borrow’ money from the company to rectify an immediate problem, always with the intention of paying the money back. However, as their addiction worsens, the problem usually spirals out of control and they start taking more and more to fix their predicament, finally realizing that they cannot repay it; then they run. Whilst not the largest losses these can reach some big figures and €1m is not uncommon, although figures in the hundreds of thousands are more likely. 
 
Another scenario could be that a member of staff is found in a compromising situation and criminals find out and use this circumstance to blackmail them by forcing the employee to carry out some tasks to either enable them to access your business (electronically or physically), or to simply force the employee to steal directly.  It can be anyone in a company, and losses can be from around €50,000 for a straightforward taking of cash from the safe, to millions of Euros because they granted access to the computer systems.

 
Types of commercial crime

Fraud by employees in any business sector, including food and agriculture, comes in many guises.  Invoice fraud can very quickly become costly to an organisation.  A member of staff who has control of tendering or contracts might conspire with a supplier to inflate invoices. Normally they split the difference between the ‘real’ price and the stated price. This means that either poor quality services are supplied, or overcharged services with reasonable quality are provided.  If the member of staff is allowed a level of autonomy in this area it can be hard to detect as they will often receive fake quotes to cover the fraud.  
 
Delivery fraud is another possibility and often works hand-in-hand with either blackmail or general corruption. A gang will find a suitable member of staff who has access to warehouses or other storage facilities and find a way to get them to aid them in their plans. This can be through a simple cut of the profits (Improper Financial Gain) or through blackmail. Either way the staff member will grant them access to the facility through either forged paperwork or being there themselves to open the door. Whole lorry loads of goods can be taken in this way and losses can mount up quickly. It is only when the goods are not paid for that the loss is discovered, which can often be some time down the line. Securing against this can be difficult as the papers to release the goods will be official and unlikely to be queried at the gate.  
 
More complex frauds are social engineering and fake presidents, which have the same method at their core. They both rely on a level of trust either built up over time or gained by electronic means. 
 
Social engineering can take the form of regular phone calls building-up a rapport, or targeted emails (finding out the hobbies of a member of staff and then sending them links – Spear Phishing), or even working on an out-of-work friendship which then turns into a request for help. All of these come under the social engineering banner. Once trust is established there will be a request to transfer funds, either for a legitimate looking reason or to help the person conducting the fraud. Once the money is transferred the contact usually ceases immediately.
 
Similarly fake presidents can fox even the sharpest of employees.  Criminals make a call seemingly from the CEO, CFO, or someone else senior in the business. It typically occurs on a Friday afternoon with a request for an urgent transfer of funds.  The reason given is usually that if the transfer does not go ahead then a deal will fall through to the harm of the company. The call will seem to come from the senior member of staff but will be the criminals who have hacked your phone systems to make it seem like it is the phone number of the person they are impersonating, or used email addresses which are one letter different to the senior employee.  A less sophisticated version of this is hijacking emails and changing bank details at the last minute to the fraudster’s account. 

 
Minimising losses

As we can see from the above, “non-tangible damage” (financial) losses, caused by infidelity of employees or third-party criminals, can cause quite a big gap in the balance sheet of any Food & Agriculture enterprise.  To minimise your losses, these types of risks should be covered by additional commercial crime insurance policies, and employees should be educated about possible fraudsters and their tactics, so they know what to look out for and how to deal with it if they come face-to-face with a fraudster.

Brian Alexander

Group Practice Leader Financial Institutions

T +43 664 962 39 17

Related articles

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more…

Parametric insurance – rapeseed: Bessé and GrECo sign an exclusive distribution partnership agreement

Bessé, leading French insurance consulting firm, and GrECo, largest independent risk and insurance management advisor in Eastern Europe, announce the signature of an exclusive partnership agreement to extend the distribution of the parametric solution “Rapeseed Germination.” Based on an innovation developed by Bessé in collaboration with AXA Climate, the joint project between Bessé and GrECo now enables the deployment of a European parametric insurance solution.

A unique innovation for the agro-food industry

Bessé, with its strong focus on innovation, is a pioneer in the field of parametric insurance. In France, the teams have developed a unique insurance product for stakeholders in the oilseeds sector in response to growing climate risks affecting the cultivation of rapeseed: increasingly dry summers deteriorate the growth potential of this crop, from the earliest stages of its development. The solution developed can cover the risk associated with rapeseed germination and is particularly designed for seed companies and grain dealers’ organisations.
Unique on the market, this product is the only solution that can determine the quality of rapeseed germination at field scale, through biomass measurement.

This innovation, developed by Bessé’s experts, is gaining popularity among agro-food operators: almost 80,000 hectares are already covered in France, and it was deployed for the first time in Romania in 2022.

Working together to develop a European parametric insurance solution

Satisfaction in France and confirmation of the solution’s ability to meet the rapeseed crop insurance requirements open new development perspectives in European countries with a strong agricultural sector.
This situation has naturally led Bessé to collaborate with GrECo in CEE. After working together for several months to understand the needs of the stakeholders in these countries and adapt the solution to local particularities, the partners have signed an exclusive distribution agreement, which is already being deployed in the sector.ion.  

Jean-Philippe PAGES
Head of Bessé Large Risks Department

We are delighted to have signed this distribution agreement with GrECo. Like us, they have agro-food experts in their teams as well as solid knowledge of agricultural and parametric insurance. I am proud of this joint project that has led to the development of a European insurance solution that meets the new needs of the agro-food industry. This partnership also confirms the pertinence of Bessé’s strategy and supports our ambition to continue to innovate for our customers.

Shylov Maksym, GrECo Practice Leader Food & Agriculture

Maksym Shylov
GrECo Group Practice Leader in the Food & Agriculture industry

GrECo’s strategy is to specialise in dedicated industries and solutions, such as food and agriculture.  The specific needs and individual risk and insurance situations of our clients drive us to provide the best service as well as tailored solutions. The start of the cooperation with Bessé is a clear step towards implementing this business model. Together, the two companies are forging a common path with the ecological challenges and digitalisation of agriculture, which in turn requires the development and implementation of innovative risk advisory and insurance solutions. We are very pleased about the start of this project

About Bessé
Bessé teams are experts in insurance brokering and consulting for professionals. 500 employees apply their innovation capacity on a daily basis in their specific areas of expertise to support their customers, helping intermediate-sized businesses and large corporations to protect their activities and employees. Over 60 years, with the same values and the same independent spirit, Bessé has gradually emerged as one of France’s leading firms. Bessé’s teams, regularly acknowledged for their quality of service and advice, strive to build long-lasting, trust-based relationships with their clients. No.1 broker in the Risk Managers’ satisfaction survey 2023 (Golder & Partners and OMC). In 2022, Bessé recorded a turnover of €131 M.

Petra Steininger

Head of Group Communications

T +43 664 548 55 58

Related articles

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more…

Plan Połączenia GrECo Polska i MAI Insurance Brokers Poland

zarząd

W związku z zamiarem połączenia GrECo Polska sp. z o.o. i MAI Insurance Brokers Poland sp. z o.o., na podstawie art. 498 i 499 KSH, Spółki sporządziły Plan Połączenia.

Połączenie nastąpi w trybie łączenia się przez przejęcie określonego w art. 492 § 1 pkt 1 oraz art. 498 i nast. KSH, przy czym połączenie będzie polegało na przejęciu całego majątku spółki MAI Insurance Brokers Poland sp. z o.o. przez spółkę GrECo Polska sp. z o.o.
Podstawowym przedmiotem działalności Spółki Przejmującej jest działalność agentów i brokerów ubezpieczeniowych (PKD 66.22.Z). Podstawowym przedmiotem działalności Spółki Przejmowanej również jest działalność agentów i brokerów ubezpieczeniowych (PKD 66.22.Z).

TYP, FIRMA I SIEDZIBA KAŻDEJ Z ŁĄCZACYCH SIĘ SPÓŁEK, SPOSÓB ŁĄCZENIA (art. 499 § 1 pkt 1) KSH)
                 
Spółka Przejmująca
Typ:                                                spółka z ograniczoną odpowiedzialnością
Firma:                                           GrECo Polska spółka z ograniczoną odpowiedzialnością
Siedziba:                                      Warszawa
Adres:                                           ul. Obozowa 57, 01-161 Warszawa
Spółka Przejmująca została wpisana do rejestru przedsiębiorców prowadzonego przez Sąd Rejonowy dla m.st. Warszawy w Warszawie, XIII Wydział Gospodarczy Krajowego Rejestru Sądowego, pod numerem KRS 0000049997.
              
Spółka Przejmowana
Typ:                                                spółka z ograniczoną odpowiedzialnością
Firma:                                           MAI Insurance Brokers Poland spółka z ograniczoną odpowiedzialnością
Siedziba:                                      Warszawa
Adres:                                           ul. Obozowa 57, 01-161 Warszawa
Spółka Przejmowana została wpisana do rejestru przedsiębiorców prowadzonego Sąd Rejonowy dla Sąd Rejonowy dla m.st. Warszawy w Warszawie, XIII Wydział Gospodarczy Krajowego Rejestru Sądowego Wydział Gospodarczy Krajowego Rejestru Sądowego, pod numerem KRS 0000107363.
                
Sposób łączenia
Połączenie nastąpi na podstawie art. 492 § 1 pkt 1) KSH oraz 498 i nast. KSH, tj. poprzez przeniesienie całego majątku Spółki Przejmowanej na Spółkę Przejmującą z podwyższeniem kapitału zakładowego Spółki Przejmującej  w drodze utworzenia nowych udziałów w Spółce Przejmującej i przyznaniu ich w całości Greco Holding, jako jedynemu wspólnikowi Spółki Przejmowanej według określonego w Planie Połączenia parytetu.
 
Zgodnie z art. 493 § 1 KSH Spółka Przejmowana zostanie rozwiązana, bez przeprowadzania postępowania likwidacyjnego w dniu wykreślenia z rejestru przedsiębiorców Krajowego Rejestru Sądowego.
 
 W załączniku znajduje się szczegółowy Plan Połączenia.
 

Piotr Cieślak

Prezes Zarządu, CEO

T +48 606 343 873

Powiązane artykuły

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Czytaj dalej …

GrECo Slovenia and Allianz Partners Join Forces With Bike Insurance

GrECo Slovenia and Allianz Partners have been writing a successful and unique story with bike and e-bike insurance for over a year already. Our partner network includes more than ten big and recognizable specialized bike shops that achieve excellent sales results.
 
In April 2023, we greet in our portfolio the company Extreme Vital, one of the largest specialized bike shop in Slovenia. Extreme Vital stores are known for high-quality products, professional and motivated employees, and excellent sales and after-sales customer support. Company is present in the Slovenian market for over 25 years already, and at the moment, they have five branch stores in different locations across the country.
 
They recognized the extraordinary potential and added value for the customer in our unique insurance solution, as casco insurance for bikes and e-bikes offers exceptional coverage such as classic theft (outdoors) and burglary, robbery and vandalism, damage to the bicycle in the event of falls and traffic accidents, additional coverage for e-battery, mobile assistance.
 
Visit the Extreme Vital stores and check their quality and affordable offers. Ask them also about our casco insurance for bicycles and e-bikes.

Alma Ribanovic

Group Practice Leader Affinity

T +43 664 962 40 17

Related articles

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more…

Is Mexico on Your Investment Bucket List? Interview With Peter Weber

Mexico is on everybody’s lips right now, and not just because it is one of the trendiest places to go on holiday.  Companies across all sectors are clamouring to invest in Mexico, begging the questions why is Mexico the hottest country to invest in at the moment?  Earlier this month, Natalia Zaborovska caught up with Peter Weber from Proteccion Dinámica, Agente de Seguros y de Fianzas, our co-broker in Mexico to find out.

Zaborovska: Hi Peter, let’s kick-off by introducing you to our readers.  Please can you tell us a bit about yourself?
Weber: Of course.I was born in Mexico with German ancestry.  I have been working in the insurance industry for almost 25 years with the following Licenses: Big Risks with TIV over 100 Mio USD, Reinsurance and Hull, Credit Insurance, Crop – Livestock and Bonds. I currently work as a Professional Insurance Advisor and I head-up the international division at Protección Dinámica, Agente de Seguros y de Fianzas, S.A. de C.V. where I’m also a Partner. I’m proud to say I speak and write fluently in Spanish, English and German.

Zaborovska: So, what is Proteccion Dinámica, Agente de Seguros y de Fianzas and what is its focus?
Weber: Nowadays, our firm is considered one of the top 10 largest insurance agents in Mexico offering a personal service for all P&C Insurance as well as employee benefits.

It first started as a small family business that carried the name of its founder Erich Vogt but in 2001 changed its name to Protección Dinámica, Agente de Seguros y de Fianzas, S.A. de C.V. This year we’re celebrating our 68th anniversary, and, like GrECo, we are proud to still be a family-owned business. Currently, Elisabeth Vogt, the founder’s daughter, is our CEO and she is carrying on the values and know-how of the first generation. We even have members of the family’s third generation moving up through the ranks of the company.
In addition to supporting, advising and securing insurance for Mexican organisations at home, we advise and secure insurance for international companies with headquarters abroad who want to establish, or have already established a subsidiary in Mexico, and vice versa.

In January 2023 we became one of GrECo’s newest nova partners, and we are proud and grateful to start this new relationship.

Zaborovska: You’ve touched briefly on your role within the organisation.  Please can you tell us a bit more?
Weber: I am the International Director and I work diligently with my team of 12 in the international division. My role is to work closely with our international partners and in-house brokers and risk managers to tailor solutions for their specific needs, supporting them throughout the whole process. We distinguish ourselves by providing excellent customer service, which has secured us ongoing relationships with some clients for over + 60 years!  It has also meant, over the years, that we have been able to increase both personal and business lines.  We focus on always providing our clients with a wide range of integrated services which solve their problems, offer the best solutions, and the best cost-benefit without sacrificing quality.

Zaborovska: OK, and on to the burning question [no pun intended!] why is Mexico so hot right now?  What makes it a unique place for investors and insurance brokers?
Weber: Where to start?  There are so many reasons.  On the international scene and according to a new index from the World Travel and Tourism Council (WTTC), Mexico is in the top 10 most visited countries in the world, with approximately 113 million visitors per year. In addition, with a population of almost 130 million it is among the 10 most populous countries in the world.  That, coupled with its rich cultural history due to its great diversity, favourable geography, and abundant natural resources, means it is one of the 15 largest economies globally and is second largest economy in Latin America.  It has solid macroeconomic institutions and is believed to be one of the best countries to trade with, offering some of the best investment opportunities. When you’ve got all that on your side, what’s not to love?

Zaborovska: What about the Mexican economy?  Hasn’t COVID-19 had a negative effect?
Weber: The Mexican economy grew 4.8% in 2021, after an 8.1% drop the previous year due to the COVID-19 pandemic. Its recovery is slow but steady with a forecast to grow 2% in 2023. Mexico’s growth is supported by its willingness to trade, and a solid manufacturing export base connected to global value chains integrated with the United States.  

According to INEGI data, there are some specific economic sectors in Mexico that have helped the post-pandemic recovery: Tourism has had a big impact and the service sector is predicted to be the main economic driver during the first quarter of 2023. With regards to the industrial sector, after the recovery in 2021, the growth rate has stabilized, although for some sectors this has not been favourable. Mining, for example, is practically stagnant, and electricity and water suppliers have not yet recovered.  Manufacturing has already recovered to its pre-pandemic levels, but in 2022 its growth was more moderate, barely 5.5%. In the case of remittances, they have maintained constant growth in recent years and the Mexican economy received a record of 58,497 million dollars in remittances in 2022 – an increase of 13.4% compared to 2021. According to a report by the Bank of Mexico BANXICO remittances compete with automotive exports as the main source of foreign exchange for Mexico.

Zaborovska: Sounds positive.  Is there anything companies wanting to invest in Mexico should be aware of?
Weber: Definitely! Mexico has beautiful ecosystems and natural landscapes, but they come with high natural disaster risks. The threats of earthquakes, floods, droughts, and volcano eruptions are omnipresent, making it essential for any organisation in Mexico to have the right coverage and insurance policies in place, especially as climate change continues to exacerbate these issues further.

Zaborovska: Nearshoring is currently a popular strategy for businesses, how has it affected the business environment in Mexico?
Weber: The very nature of nearshoring – when a company transfers all or part of its operations to a nearby country that has a similar time zone, good cost-quality ratios, and cultural similarities – makes Mexico a prime location.  Currently Mexico is number one in Latin American nearshoring with real estate as the greatest participating sector.  It has an occupancy rate of 97%.

Zaborovska: Why is that?
Weber: Because Mexico is strategically positioned, a location that cannot be missed, even more so within the context in which it exists. Being neighbours with the United States of America, which is the largest exporter worldwide, means Mexico has great opportunities for better infrastructure and the use of existing fast and secure supply chains. However, real estate isn’t the only sector grasping nearshoring opportunities in Mexico with both hands.  Many different industries are snapping up the opportunities to nearshore here. The most prolific industry is automotive.  In January 2023 automotive companies announced that nearshoring investments in Mexico will amount to a total of circa US$2.5 billion (data from Datamétrica-Aporta).

Zaborovska: What’s the insurance market landscape like in Mexico?  Can you go into more detail for us?
Weber: It’s all go in Mexico! The country has positioned itself as one of the main leaders in the insurance business in Latin America, despite the global economic context. To ensure growth, there have been some changes in insurance regulations and laws in the last few years.  The purpose of which is to improve the service given and the accountability of all parties involved, as well as reducing risks and assuring the solvency of institutions to prevent the risk of bankruptcy. There have also been successful efforts to implement technology, create Insuretechs, and adapt to new customer demands, plus raise awareness of the benefits of having an insurance policy.

Almost three years after the COVID pandemic, Mexico boasts the second largest claims in history – second only to Hurricane Wilma – with 2.8 billion USD paid in medical and life coverages.  During this difficult time, insurance agents in Mexico became the most important channel for selling insurance policies and advising their clients correctly.

Zaborovska: Lastly, can you summarise in a nutshell what role your company plays in ensuring successful business in Mexico for anyone looking to invest here?
Weber: Mexico has a diverse market where there are multiple options for products, coverage, and costs; and as an insurance agent we have the important task of advising clients on how best to select and manage these. In Mexico we are aware of the importance of having good risk management, and many people are seeing the benefits of having insurance during difficult times, this allows us to visualize significant growth in the insurance sector.

Zaborovska: Thank you for your time Peter, we’re looking forward to working with you.
Weber: Thank you and likewise.  We look forward to nurturing a prosperous relationship with all of GrECo´s Partners around the world.

Natalia Zaborovska

Peter Weber

Proteccion Dinámica, Agente de Seguros y de Fianzas

Natalia Zaborovska

Natalia Zaborovska

Group Head of International

T +372 5824 3096

Related Insights

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read More …

When Will Climate Change Affect Insurance Products?

Even if we take extensive action immediately to limit our impact on the environment, climate change cannot be easily stopped. What does this impact mean for the food and agriculture industry and how should insurers prepare for it?

Every year, we see and feel the impact of climate change on ourselves and on our immediate surroundings.  Climate change isn’t new news.  Over the years many scientists have confirmed the impact humans are having on our environment in numerous scientific studies. One such study by the IPCC (Intergovernmental Panel on Climate Change), cites that the average temperature of the earth was 1.09 degrees Celsius higher between 2011-2022, than preindustrial times, between 1850-1900. All forecasts predict, regardless of actions taken, that the earth’s temperature will continue to rise until at least the middle of this century. This means that even if we take extensive action immediately to limit our impact on the environment, climate change cannot be easily stopped. What does this impact mean for the food and agriculture industry and how should insurers prepare for it?

Preparing for climate change

By the end of the 21st century, we will have to, or rather our children and grandchildren will have to, struggle with temperature increases predicted to be, on average, two degrees Celsius higher than the pre-industrial era – that’s twice as high as today!  At the same time, due to heat capacity and inertia, the land will also heat-up until it is approximately one and a half times hotter than the oceans and seas. As the earth’s land mass is predominantly located in the northern hemisphere, this means Europe will acutely feel the rise in temperature.  This is going to cause headaches for the food and agriculture industry and their insurers alike.
 
In addition to rising temperatures, one must not forget other factors, such as the increasing cost of fuels for energy production and the search for greener, but more expensive, solutions to using these resources.  When these are considered, the desired goal of reducing the impact of industry on the climate is thrown off balance:  Some countries facing rising energy prices are questioning whether it is economically better to continue to overlook the environmental impact of generating energy from traditional, unecological sources to ensure their populations and industries are kept supplied, in lieu of using greener, more expensive solutions to minimise climate change.
 
Last summer, we saw the effects of climate change, with increasingly hotter summer days and nights, and extreme weather conditions. For holidaymakers, nice weather, and high temperatures are attractive. However, from the perspective of the economy and the impact on society, quite the opposite is true.  Here’s why: High temperatures often exceed the optimal conditions for factories’ production equipment, increasing the risk of failure, leading to downtime and the need to reduce production.  Offices and private homes using air conditioners put a strain on the power grid which results in increased energy consumption. Also, those industries in which it is necessary to maintain a constant temperature (e.g. cold stores, freezers etc.) incur increased operating costs. 
 
Living things are also not indifferent to high temperatures.  animals migrate searching for better conditions, thermophilic species appear in northern countries, and plants’ vegetation is reduced. 
 
Lack of rainfall resulting in drought maybe perceived as a mere annoyance for an ordinary citizen faced with restrictions on watering home gardens or washing vehicles.  However, for the food and agriculture industry it can spell disaster. Our rivers suffered greatly last summer, and they have not yet returned to average, safe levels.  This is having a massive knock-on effect on the agricultural industry and our economies as a whole.  Heat is not a critical phenomenon for plants unless it is long-lasting and accompanied by a lack of rainfall.  Unfortunately, last summer’s climatic situation caused prolonged periods of heat, accompanied by periods without rainfall causing agricultural drought, i.e., a state in which the lack of moisture in the soil threatens the vegetation of plants, spelling problems for food production and animal feed.  However, it is not just these obvious effects on the agriculture industry that we need to be aware of here.  Low water levels also affects the energy sector because it restricts the availability of a coolant, causing limitations in energy production.  This in turn impacts agriculture because at high temperatures, the energy industry may activate measures to protect transmission lines leading, for example, to switching off the energy supplied to a plant. This would mean, in the average production plant, that production is temporarily stopped, which would cause financial losses for the business. However, there are some businesses in the food and agriculture industry, especially those connected with livestock, where this scenario could be fatal because a constant energy supply is necessary for ventilation and supplying drinking water to the animals (e.g., poultry farming). If the operation of the plant is directly dependent on energy, and the lack of supply or a change in its parameters causes downtime or damage to the equipment, we are talking about damages that reach thousands of euros.
 
As if that wasn’t concern enough for the industry, a heatwave is usually accompanied by an equally great wave of fires, which generates large insurance losses regardless of other causes. With very dry soil and litter, it doesn’t take much to start a fire that destroys forests and crops and threatens homes and factories. Very often, such fires cannot be brought under control by local forces, and it is necessary to use the help of other regions or even neighbouring countries.
 
Higher temperatures also mean a greater risk and frequency of violent weather conditions. Hurricanes, hailstorms, torrential rains, and flash floods are already becoming more and more frequent causes of damage. Their effects on private buildings can often result in irreparable damage or complete destruction.  

Can we ensure against soaring temperatures and the risks they bring?

However, whether risks such as lack of energy due to a heatwave can be insured or not, remains to be seen. Currently, this risk is not commonly insured, additionally, the liability of the energy supplier is limited by the occurrence of force majeure. If we consider a phenomenon that could not be prevented as such, then the heat wave and the resulting lack of water in rivers, limiting production, meets these conditions.  Whilst we are talking about a risk that is not directly insurable, the solution may be index and parametric insurance. If we take specific weather conditions as a parameter, it seems possible to construct a product that meets the needs of customers. In the world, such solutions are becoming more and more common, but the question is, when will we see such solutions in our market?
 
In a nutshell, as the food and agricultural industry experiences greater challenges in the face of climate change, so too does the insurance industry, and we predict these will only become more challenging as climate change progresses.  The risk profile of individual activities is changing along with climate and environmental changes. In the case of agriculture and crop insurance, we have not had to deal for a long time with the catastrophic extent of damage from the negative effects of overwintering, as in 2012. However, the warming climate, as we have seen, is causing and will continue to cause more summer damage. In the case of industry, the risk of flooding and machine breakdowns is increasing and will continue to do so. Our insurance offer should, and will need to, adapt to these changes to ensure our clients are always fully insured.  Watch this space!
 
 

Maksym Shylov

Group Practice Leader
Food & Agriculture

T +48 22 39 33 211

Related articles

New FOODprint Publication

In the latest edition of GrECo’s Food & Agri client magazine, FOODprint, we place our focus on a key challenge faced by this industry: the impacts of climate change

Read more…