Intermediaries Roles on Managing Risks V International Istanbul
Intermediaries’ Roles on Managing Risks V. International Istanbul Insurance Conference October 2013
Our Fact Sheet – How We Empower Results For Clients § Aon Benfield’s industry leading expertise and data enables us to deliver unique value to our clients § Capital Advisor – Utilizing a full range of expertise, proprietary tools and benchmarking capabilities, we provide the most appropriate strategy and form of capital to meet your needs. § Client Advocate – We act as our clients’ trusted advocate in the global reinsurance marketplace and have a track record of structuring the most effective solutions across even the most complex of global risks. § Custom-Tailored Solutions – Our award-winning tools and solutions give our clients the freedom to embrace new opportunities and confidence from having access to cutting-edge offerings. Aon Benfield | Empower Results 1
What is Risk? Risk = Probable Frequency + Probable Magnitude ( of a future loss ) § Insurable Risks Fire Earthquake Flood. . . § Uninsurable Risks Economical Slow-down Regulatory Changes Competition. . . Aon Benfield | Empower Results 2
What to do with the uninsurable Risk? Maybe some help still available? § Help on market security before a risk attaches or even during the term of the policy if one or more of the risk carriers become insolvent or have weakening of their financial strength § Help on sanctions areas to give clearer picture to clients who may have some business or plans to have business over there § Advise on areas of political unrest or even terrorism to develop travel policies and emergency preparedness plans § Advise on cyber risks and minimise the effect on the balance sheet § Advise on contractual management, to minimise policy expenditure Aon Benfield | Empower Results 3
How can Intermediaries improve Risk? § Risks can be simple. . Aon Benfield | Empower Results 4
How can Intermediaries improve Risk? § Or complex. . Aon Benfield | Empower Results 5
Whatever the complexity, when it comes to risk management A company needs to protect its; § Brand § Cash Flow § People § Assets § Balance Sheet § Processes Aon Benfield | Empower Results 6
Methods & Systems / Risk Engineering & Asset Protection Deliver specific support to monitor and improve processes to assist in reducing loss costs. This can be done in-house, by the broker. § Property Risk Consulting Risk control and asset protection to go beyond hazard and risk identification, and include keen awareness of innovative risk mitigation strategies, property and business interruption valuations, fire protection engineering and access to a best in class proprietary data management solution. When disaster strikes, such as earthquakes, explosions, hurricanes, fires or floods, the intermediary can help clients mitigate the loss and get back to business. § Fire Protection Engineering To provide clients across all industries with innovative and cost effective solutions that protect life and effectively reduce the risk of fire and security threats. § Casualty Risk Consulting Define and target key metrics for clients to understand the true cost of loss and accurately track progress toward improvement. Solutions include safety culture improvement, ergonomic consulting, fleet safety, regulatory compliance, safety training and product risk management. Aon Benfield | Empower Results 7
Methods & Systems / Risk Engineering & Asset Protection Aon Benfield | Empower Results 8
Methods & Systems / Business Impact Analysis To define Risk Profiles and to estimate the capability to recover after a crisis. Targets § Identification and evaluation of significant business interruption risks related to: – Key machines and functions. – Facilities, buildings. – Suppliers and vendors. – Internal dependencies. § Building up basis for developing risk management and continuity management. Enhance business interruption risk awareness and understanding. Aon Benfield | Empower Results 9
Methods & Systems / Business Impact Analysis Aon Benfield | Empower Results 10
Businees Interruption & Supply Chain disruptions Causes 2 1 Impacts 3 Loss of productivity Increased cost of working Loss of revenue Adverse weather Unplanned outtage of IT 4 6 5 Transport network disruption Customer complaints Service outcome impaired Stakeholder/shareholder concern 7 Delayed cash flows Product release delay Damage to brand/reputation Increase in regulatory scrutiny Earthquake/tsunami Failure in service provision by supplier Product recall/withdrawal Product quality incident Fine by regulator Share price fall 8 9 Cyber attack 10 Civil unrest/conflict Aon Benfield | Empower Results Payment of service credits 11 Source: BCI survey 2011 Industrial disputes 11 2
Methods & Systems / Scorecards Aon Benfield | Empower Results 12
Methods & Systems / Scorecards Aon Benfield | Empower Results 13
Methods & Systems / Data Management & E-Solutions Aon Benfield | Empower Results 14
Methods & Systems / Data Management & E-Solutions Aon Benfield | Empower Results 15
Aon Risk Engineering Protect your Brand Protect your Cash Flow Protect your People Aon focuses on risk-reduction, improving reputations and preserving brand name. Aon saves clients money on insurance premiums by accurately representing their operations. Aon helps companies reduce hazards and improve performance • Consequence assessment, including modeling of fire, explosion and toxic release events • Frequency assessment using Fault Tree Analysis • Quantitative safety risk assessment to evaluate the impact on human health, the environment, property damage and business interruption • Comparative risk analysis to determine cost- effective solutions to risk reduction • Reinsurance market underwriting consulting • Insurance risk engineering consulting • • Estimated maximum loss (EML) • Risk rating • Business interruption studies • • Construction project reviews Protect your Assets • Process Hazards Analysis (PHA) • Layer of Protection Analysis (LOPA) Human Factors • Critical task analysis • Control room / alarm evaluations • Facility siting to examine the risk to building occupants • Audits to verify compliance and provide solutions • Provide solutions to underwriting recommendations Aon provides engineering solutions to reduce risk, achieve compliance, and protect assets. . Hazard identification and evaluation • Fire hazard assessment Protect your Process • Code compliance • Suppression and detection system specification, design and performance testing Aon provides engineering solutions in early stages of design, resulting in reduced capital expenditures and increased levels of protection. • Safety review of design features • Fire water infrastructure specifications, design and performance testing • Fire protection review • Spacing and layout review • Fire water pump specification, design and performance testing • High-level HAZID • Staffing for in-house project teams Protect your Balance sheet Aon’s valuations help clients obtain appropriate insurance levels • • Aon Benfield | Empower Results Current property valuations Desktop studies Basic replacement cost reports Detailed replacement cost reports 16
Methods & Systems / A prerequisite: Questionnaire § Avoids patchwork information flow § Improves overall quality of the risk review by the insurance company/underwriter § Reduces the E & O risk Aon Benfield | Empower Results 17
The cost effect § Insurability The insurability of an asset highly depends on its risk conditions thus risk management is very important for insurability. As an example, the turbine technology is one of the most important criteria when insurers are accepting power risks. In Turkey, a number of premises belonging to ‘dangereous’ area of operation like furniture, paint and the like left uninsured recently. Some of them were able to get insurance cover afterwards with a plan for risk management practices. § Capex reduction On the other hand the, the common practice is that an insured gets a cost reduction in paid premium in relation to the investment made on risk improvement. The risk improvement can directly affect the PML scenarios thus the limit ( or the capacity ) required to be protected. Aon Benfield | Empower Results 18
QUESTIONS Ferhan Özay | Executive Director Aon Benfield Akkom Ofis Park No: 2 Ümraniye 34768 İstanbul T: +90. 216 444 12 66 ext. 540 ferhan. ozay@aonbenfield. com | www. aonbenfield. com Aon is the Principal Sponsor of Manchester United
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