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WRMA’s Annual Meeting Chicago June 2006 New Sources of Global Risk The Ethiopian example

WRMA’s Annual Meeting Chicago June 2006 New Sources of Global Risk The Ethiopian example. Salah DHOUIB. AXA Re’s perspective. The Ethiopian deal particularities:. TABLE. Data and structure The counter party The “humanitarian” aspect. A. Data.

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WRMA’s Annual Meeting Chicago June 2006 New Sources of Global Risk The Ethiopian example

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  1. WRMA’s Annual Meeting Chicago June 2006 New Sources of Global Risk The Ethiopian example Salah DHOUIB

  2. AXA Re’s perspective The Ethiopian deal particularities: TABLE Data and structure The counter party The “humanitarian” aspect

  3. A. Data • Data availability and quality is a big issue in developing countries: • Few historical records, • Poor quality • Lack of transparency • EarthSat/RMS involvement was essential

  4. A. Structure • Weather hedge for agriculture is very complex. Index is: • Multi-station • Multi-period • Multi-crop • + Greater diversification • - No hedging

  5. B. The Counter-Party • The WFP as an international organization: • Doesn’t accept the jurisdiction of any country • Has a “complicated” chain of command and a lot of internal procedures • The legal aspects of the contract were very time consuming

  6. C. The humanitarian aspect • The deal is very sensitive and appealing to a very large public: • Ethiopia is the a very symbolic country when we talk about famine and humanitarian aid • We had an impressive media coverage • + May be seen as an intelligent way to help people • - May be seen as a waste of much needed money

  7. C. The humanitarian aspect • Danger of the “basic” risk in terms of PR: • Having a famine in Ethiopia without having to pay • To be seen as exploiting people’s distress

  8. D. Conclusion • A deal AXA Re is really proud about • A great example to be followed in other countries

  9. Frédéric Rauffet Jean-Christophe Garaix Françoise Bollotte Salah Dhouib A dedicated team at your entire disposal: E-mail: weather@axa-re.com Tel: + (33) 1 56 43 86 79 Fax: + (33) 1 56 43 93 70

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