Global Briefs

Global Briefs – June 2019

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Brazil – Q1 2019 Reinsurance

Terra Brasis just published the preview of the 31st edition of Terra Report, comprising the period of January to March 2019. The outlook for the year´s first quarter is positive however, as it is based on a short timeframe, it can be volatile. Ceded Reinsurance premium by Brazilian Cedants (gross of commission) reached BRL 3.30 bn, an increase of 21.8 percent. The volume of written premium (gross of commission) of local reinsurers, considering local and offshore businesses, reached BRL 3.23 billion, an increase of 28.9 percent. The acceptance of foreign risks continues enhanced, showing a 44.1 percent increase in comparison to the first 3 months of 2018. Local Reinsurers’ Loss Ratio registered 76 percent compared to 41 percent for the same period in 2018. The Combined Ratio stood at 93 percent, a slight worsening in comparison to the 90 percent from the same period of 2018.

CEE* Region – Insurance Market Grew 2.2% in 2018; Poland only Country to Drop

The CEE insurance market grew by 2.2 percent in 2018, reaching a total GWP volume of € 36.9 billion. At the same time, CEE insurers paid benefits and indemnities worth € 22.44 billion, 2.37 percent up. Poland, the region’s flagship market, was also the only one recording a negative change in GWP, which made it diminish its share in the region’s GWP to 39.2 percent, from 41.4 percent in 2017. Seven of the region’s 17 markets have reported double-digit growth rates, the strongest growth being witnessed in Estonia (29.24%). The most developed markets in the region have achieved a significantly lower increase of the business volume. Non-life insurance lines fared better, recording overall a positive evolution of the GWP volume. Motor insurance lines recorded growth rates of 9.33 percent for Motor Hull and 5.05 percent for the MTPL line. The individual markets’ dynamics were positive, except for Poland and Romania which recorded slightly negative growth rate on the MTPL line. Paid claims increased, in average, by about 7 percent on both lines. At the same time, the property insurance segment saw a 5.4 percent increase in GWP and, helped by a ‘calmer’ year in extreme weather events terms, an almost 8 percent decrease in the paid claims

IRL: * These are the member countries of the CEE. Click on each country for an interesting array of information and statistics

Czech Republic – Allianz to invest in Czech gas distribution network GasNet

Allianz Capital Partners (ACP) on behalf of Allianz insurance companies has, in a consortium led by Macquarie Infrastructure and Real Assets (MIRA), reached an agreement to purchase a stake in GasNet. GasNet is a regulated gas distribution network in the Czech Republic, with 2.3 million connections and a network length of circa 65,000 km. GasNet’s distribution network covers 81 percent of the Czech Republic, serving homes and businesses in all areas of the country except Prague and Southern Bohemia. The majority of the GasNet pipeline network consists of low pressure, local grid pipes constructed from polyethylene, which can be also directly utilized for distribution of green gas or hydrogen in the future.

France & Burkina Faso – Thoughtless acts of tourists results in saviors’ deaths

Don’t go where you are not supposed. This should be first and foremost on peoples’ minds when they travel to unknown places. I understand situational awareness is foreign to many people but everyone should know that going into a war zone is not smart. Two French soldiers died in early May in Burkina Faso (formerly Upper Volta)* on a mission to save two French tourists kidnapped while on safari in neighboring Benin. An American and a South Korean were also rescued. According to an article (The Week, May 31/June 7, 2019) the French press has been up in arms over this. Rightly so. Why should French soldiers go save stupid people at great personal risk? 

IRL The territory was made part of French West Africa in 1904, and the colony of French Upper Volta was established on March 1, 1919. It gained independence as Upper Volta in 1960. The name Burkina Faso, which means “Land of Incorruptible People,” was adopted in 1984; however, the original translation was “Land of Upright Men” which apparently was sexist and not politically correct.

Germany – Mutual insurers lead the German market

Mutual/cooperative insurance CEOs have emerged as the top leaders according to analysis undertaken by German insurance magazine Versicherungswirtschaft. Assessing criteria such as leadership style, innovation and external perception, the magazine has placed leaders of the mutual/cooperative insurance sector firmly in the first, second and third places in a “performance check”. The top position is given to Norbert Rollinger, CEO of R+V, who the magazine describes as versatile, convincing and approachable. Klaus-Jürgen Heitmann, CEO of HUK-Coburg, fills the second place on the list, and in third place is Ulrich Leitermann, CEO of Signal Iduna. All three insurers are members of the Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), the voice of the mutual and cooperative insurance sector in Europe. This ranking backs up remarks made by Oliver Bäte, Chairman of Allianz, at the recent Insurance Europe conference, where he said “Local mutual insurers in Germany are providing benchmarks for other insurers in terms of client service.”

North Atlantic – North Atlantic hurricane season is officially underway 

The 2019 North Atlantic hurricane season officially got underway on June 1 and runs for six months through to November 30. Ahead of the start of the season, several forecasting groups and agencies have issued seasonal outlooks that provide a guide to the expected level of activity this year. Most companies anticipate near-average activity in the Atlantic hurricane region, which comprises the North Atlantic Ocean, the Caribbean Sea, and the Gulf of Mexico. The U.S. National Oceanic and Atmospheric Administration (NOAA) is forecasting 9 to 15 named storms, 4 to 8 hurricanes, and 2 to 4 major hurricanes; these ranges are close to historical annual averages of 12 named storms, 6 hurricanes, and 3 major hurricanes. Outlooks from other forecast groups and meteorological agencies are broadly in line with the guidance issued by NOAA. Read NOAA’s report HERE

Romania – The Insurance Pool against Natural Disasters paid 5X in claims for the first quarter of 2019

In Q1 2019, the Insurance Pool against Natural Disasters of Romania (PAID) paid five times more indemnities for Nat Cat events, compared to the same period in 2018. About RON 1.24 million (~€ 0.26 million) was offered as compensation for those insured by PAID, according to latest data requested from PAID. 

IRL: RULE No. 6/2013 on the Insurance Pool against Natural Disasters – Art. 1. – (1) The Insurance Pool against Natural Disasters, hereinafter referred to as PAID, is an insurance-reinsurance undertaking established by the association of insurance undertakings authorised to conclude compulsory home insurance, in accordance with Law No. 260/2008 on compulsory home insurance against earthquakes, landslides and floods, republished, as subsequently amended and supplemented. Download here the full text of the Rule No.6/2013.

Russia – Number of complaints against insurers dropped 36$ in 2018

For the period from January to March 2019, the total number of complaints against insurers amounted to 12,200, which is 36 percent less than for the same period 2018, according to the Bank of Russia.

United Kingdom – The mess of Brexit and what’s next

I asked two friends – one an accomplished insurance practitioner and the other a leading insurance media journalist – “Do you have any thoughts about what’s going on in the UK with Brexit now that Mrs. May has given way to June and her poor successor whomever that might be?”

David Worsfold – “Chaos - both Labour and Tories are tearing themselves apart over Brexit. It is very hard to see how it will end. Hard Brexit by 31 October seems most likely, although the European Parliament elections have given the campaign for a second referendum a big boost.”

George Worsley – “Theresa May has left her successor in a bigger mess than what David Cameron left her. The EU has ruled out changing the deal they made with Mrs May and so, the new prime minister will have to show better negotiation/listening/sales/ communication/team working/public speaking skills than the worst prime minister the country has had or the new person will assume that title pretty quickly. I had always thought that the Irish Question would be the Brexit Achilles Heel for Britain and all the posturing by the ever-increasing list of contenders for the PM job seem to skirt around this issue. With Boris Johnson looking like an early favourite for the job, it will be interesting to see what the cartoonists make of the possible new PM when he is in the dock for misleading people with the £350 million a week pledge for the NHS during the Referendum in 2016 and the Election in 2017. The business world is still critical of how the politicians have handled the whole Brexit process. Just imagine if Britain’s Brexit team was the Board of Directors – they would be sued to high heaven and beyond for incompetence, negligence and waste of millions of pounds which to country could have used elsewhere!

United Kingdom ­– Number of motor theft claims highest since 2012

Figures out from the Association of British Insurers (ABI) show that the number of motor theft claims paid by insurers in Q1 of this year were at their highest for any quarter since 2012, with a payment made to a car crime victim every 8 minutes. The cost of these claims rose by over 20 percent on the same period last year. The increase is in part being driven by keyless car crime, with hi-tech criminals being able to bypass keyless technology in as little as 20 seconds. 

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