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Doha, December 2, 2012

Europa Re Value Proposition A brief outline. Riccardo Ciccozzi Head of Business Development. Doha, December 2, 2012. Agenda. Context SEE E xposure to Natural Disasters Natural Disasters’ impact in SEE Catastrophe Insurance Markets Project Vision and Market Value preposition

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Doha, December 2, 2012

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  1. Europa Re Value Proposition A brief outline Riccardo Ciccozzi Head of Business Development Doha, December 2, 2012

  2. Agenda • Context • SEE Exposure to Natural Disasters • Natural Disasters’ impact in SEE • Catastrophe Insurance Markets • Project • Vision and Market Value preposition • Key services • Main Steps • Challenges ahead

  3. Major Natural Disasters in South East Europe Source: Mitigating the Adverse Financial Effects of Natural Hazards on the Economies of South Eastern Europe A Study of Disaster Risk Financing Options South Eastern Europe Disaster Risk Mitigation and Adaptation Programme - Eugene N. Gurenko WaelZakout The World Bank, Sustainable Development Department Europe and Central Asia Region and UN/ISDR secretariat Europe February 2008

  4. Strong Wind Flood Heat Waves Drought Quake • South East Europe (SEE) is highly vulnerable to natural disasters • Climate Change is expected to worsen the region’s exposure • Adverse impacts on governments’ budgets • Socio-economic implications on households • Adverse economic effects on business • Very Low Cat Insurance Penetration • Lack of Risk Awareness • Market Growth Potential Market Infrastructures to develop Catastrophe and Weather Risk Insurance for Households, SMEs and Farmers

  5. Europa Re - Business Model – Vision & Mission A Swiss-based company owned by countries of Southeast Europe (SEE) Supported by the World Bank, EU, UNISDR, SECO and GEF Providing innovative technology-driven solutions to SEE insurers writing catastrophe and weather risk insurance products • Vision- Increase the level of catastrophe insurance penetration amongst households, small and medium enterprises (SMEs) and farmers in the SEE region • Educating consumers • Improving and standardize credit quality of insurance products • Enabling insurers to sell weather and catastrophe risk insurance • Helping governments and insurance regulators Europa Re Project Mission

  6. Key Services - Risk Management • Market Issue: lack of high-resolution and reliable catastrophe (cat) models for SEE cat exposures • ERe Solution: provide local insurers with state-of-the-art probabilistic cat modelling tools based on the latest technology offered by Market Leaders • Main Benefits: High-resolution Models available at a much lower cost • ERe’s Cat Models’ technology is underpinned by: • AIR’s global research in catastrophe risk modelling • Country specific risk data • Unique business applications • ERe’sRisk management systems allow insurers to accurately evaluate: • Potential losses resulting from catastrophe insured risks at any point in time; • Net retention capacity relative to available solvency.

  7. Key Services - What will Europa Re do for Consumers • As result: • Consumers’ profit and assets are better protected • Higher incentive to produce • Outcome • Increased production • Increased income • Higher contribution to economy Government • Direct subsidies • Insurance premium subsidies Expertise on improving the subsidy scheme Awareness Education Development of distribution channels New Parametric Insurance Products Improved market mechanism Consumers Europa Re New user friendly and affordable products Know how Insurance companies • Basic Insurance protection • Specialized Insurance protection

  8. Key Services - What can be expected from ERe products fast and simplified loss settlements Remote Sensing & Cat Modelling Technologies

  9. Europa Re Parametric products 1. Precipitation 2. Temperature Main principle of parametric weather insurance: Coverage in case of unusual behavior of weather

  10. Example: Drought insurance

  11. A new perspective for claims Pre-event Event Post-Event Event timeline Phase1 48-72 hrs Geocoding at the time of underwriting Before/After image comparison • Imagery data collection • Remote Damage Assessment • Phase1 Claims settled Claims Adjusting and Management Financial Management Pre-event Imagery Phase 2 1-2 weeks • Effectively target adjustors and claims resources • In-field damage assessment • Phase 2 Claims settled Exposure data Work Management Documents I Correspondence I I Contacts I Event Monitoring & immediate notification Phase 3 within weeks Litigation Subrogation Salvage • Claims submission • Assignment • Evaluation in-house or send adjustors to review • Phase 3 Claims settled Protocols

  12. Main Sequencing Steps – starts Nov 2012

  13. Challenges ahead New Legislation and regulations shall be issued in SEE to foster private cat insurance Promotional activities shall target directly consumers in the region Local Insurers to enter into formal cooperation by June 2013 Launch of first New Products in October 2013 • Government Involvement: • To educate, regulate and incentivize • Consumers’ resistance: • Lack of risk awareness / low trust in private insurance • Insurance Industry Resistance: • What’s in it for me? • But, • Engage & Innovate Lessons from the Macedonian farmers

  14. Thank you for your attention! Contact details: • info@europa-re.com • www.europa-re.com

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