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Score! Culture & Compliance in Latin America’s Hottest Market: BRAZIL

Score! Culture & Compliance in Latin America’s Hottest Market: BRAZIL. Our Speakers: Debbie Rodgers Senior Vice President, Global Risk Management, Aramark Angelo Colombo President and CEO, Allianz Global Corporate and Specialty Moderator : Geoffrey Peters

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Score! Culture & Compliance in Latin America’s Hottest Market: BRAZIL

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  1. Score!Culture & Compliance in Latin America’s Hottest Market: BRAZIL

  2. Our Speakers: Debbie Rodgers Senior Vice President, Global Risk Management, Aramark Angelo Colombo President and CEO, Allianz Global Corporate and Specialty • Moderator: Geoffrey Peters Managing Director, Willis North America-International

  3. What to Expect • Challenges dealing with the Brazilian landscape involving a major event • Brazil as an emerging power but still in a growth mode • Risk Management best practices and the consequences of non compliance • Industry-specific insurance changes and trends • Program implementation challenges and strategies

  4. Brazil Overview • 5th largest country in area • 7th in GDP • US $2.2 trillion • Population : 200M • Unemployment : 6% • US companies operating in Brazil: more than 200 of top 500. • Insurance markets in Brazil forecasted to grow at an average rate of 10%.

  5. 2014 FIFA World Cup

  6. Scope of Services • Public Catering Operation – Concessions, commercial display area, regional items and beer garden • “Catering Operational Services” - FIFA / LOC staff, Media Center, volunteer program, youth program and locker room food and beverage services • Third Party Restaurant – Cleaning and security crew, stadium staff

  7. FIFA Confederations Cup • June 15 – 30, 2013 • 6 venues • Challenges • No prior business in Brazil • New business partner • Stadium readiness • Stadium infrastructure • Contracts • Protests • Health & safety hazards

  8. 2014 FIFA World Cup • FIFA’s Vision: Develop the game, Touch the world, Build a better future.

  9. The Stats Matches Days Cities Spectators Employees to be vetted by FIFA, hired / trained • 64 • 33 • 12 • 3.5 M • 12K – 14K

  10. FIFA World Cup • June 12 – July 13, 2014 • 12 widely spread venues • Expectations • Equipment requirements defined well in advance • Larger menu variety (including hot food items and regional food items) • Extended beverage service programme • Higher speed of service

  11. Risk Assessment

  12. Wednesday, February 26, 2014  /  Courtesy of BusinessInsurance.com

  13. Allianz Global Corporate & Specialty Brazilian Insurance & Reinsurance Markets Sao Paulo, February 2014

  14. Brazilian Insurance Market Insurance & Reinsurance markets have significantly grown over the last years CAGR 16% Premium in BRLm CAGR 21% 77.498 Premium Ceded to Reinsurance Admitted Local 66.241 58.178 Insurance Premium 50.036 Source: SUSEP

  15. Brazilian Insurance Market Decreased profitability in reinsurance as complex risks have been progressively transferred from insurers to reinsurers Source: SUSEP, Terra Brasis Report

  16. New Regulatory Framework * Intragroup Retrocessions limited to 20% per contract

  17. Wording: new regulation increases complexity • Only admitted policies allowed • Standard wording by line of business provided by the insurance regulator (Susep) • Risks required to be classified under 7 specific lines of business, additional complexities to create multiline insurance (Susep’s Rule 395) • Since June 2013, singular insurances are no longer authorized (Susep’s Rule 458) • Non-standard policy wordings adapted to the needs of the insured through particular clauses or additional covers can still be used, but must be previously approved by the regulator, with the corresponding actuarial note (3–4 months) • Arbitration clause: local legislation requires written agreement by the client • Portuguese wording prevails in bi-lingual policies / slips • Susep’s mandatory clauses in slips: insolvency, intermediary, cancellation, law & jurisdiction

  18. Claims: in line with global practices • Loss Adjuster must be assigned by the carrier in the local market, renowned international loss adjusting companies have local representation in Brazil • Handling process fully aligned with global practices • Law firms involved in claims litigation must have local representation, specialized local and global law firms have local offices in Brazil • Local Reinsurers may enforce claims control • Large insurers and reinsurers have fully dedicated staff to all lines of business • Average time of claims settlements, after adjustments: • Insurers: 30 days • Reinsurers: 8-10 days

  19. Premium Flow – Option 1 Local Placement Insured Overrider Taxes Total Costs Carrier 100% Reinsurer Local License Brazil 100% Outside Brazil 3rd Party Reinsurer 100% Reinsurer (HQ) 100% Captive

  20. Premium Flow - Option 2 Insured Local Placement Admitted Placement Taxes Average Costs Overrider Taxes Overrider Average Costs Carrier 80% Local Reinsurer Brazil 80% Outside Brazil 20% 3rd Party Reinsurer 80% Reinsurer (HQ) 100% CAPTIVE

  21. Premium Flow - Option 3 Insured Local Placement Admitted Placement Taxes Average Costs Overrider Taxes Overrider Average Costs Carrier 40% Reinsurer 1 Local Brazil Outside Brazil 40% 60% Reinsurer 2 100% CAPTIVE

  22. International Insurance Programs: solution for clients with international exposure DIC/DIL  Local policies follow best market standards FOS (optional) US Austria Austria Italy Thailand Italy Germany Germany • Adequately reflecting and covering client local risk Australia Singapore • Including mandatory local coverage • Taking local supervisory aspects into consideration, e.g. minimum local retention • Administration of local taxes DIC/DIL • Risk based premium allocation Umbrella Singapore Germany Thailand Australia Austria Italy   Harmonizing overall coverage by including local companies under the Master in DIC / DIL Pooling of local policies via reinsurance *)   Potential sharing of risks with a panel of coinsurers / reinsurers Captive fronting based on client needs US 3 US 2 US 1 Property Example Policyscope (limits and conditions) Geographical territories Liability Example Policy scope (limits and conditions) Geographical territories FOS not recommended • Local policies issued dependent on risk and maturity of market: • Master cover provides global umbrella • Harmonized coverage across the program • Combines best local practice with global requirements • Local regulations are complied with (taxes/levies) • Premium is allocated in relation to localrisk and exposure * to the degree legally permitted

  23. Questions, Final Comments and Contact Information Angelo Colombo President and CEO Allianz Global Corporate & Specialty email:  angelo.colombo@allianz.com Geoffrey M. Peters Managing Director Willis North America - International email:  geoffrey.peters@willis.com Debbie Rodgers SVP, Global Risk Management Aramark Corporation email:  rodgers-debbie@aramark.com

  24. Please complete the session survey on the RIMS14 mobile application.

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