COVID-19 Measure: Read Full Magazine Here. The intertwining of the economy and climate change promises to alter the shape of global politics and society for the foreseeable future.
By January 2021, Covid-19 had claimed more than 2 million lives worldwide. It is a reminder that, when change happens, it can happen fast. The world was already facing climate change, a technological shift and renewed political tensions — particularly between China and the US. The pandemic is also a reminder that, in today’s complex world, all risks are connected. In the short term, Covid-19 also means economic recession, increased poverty, a rise in mental ill health, social discontent — and, very probably, a deepening gender divide. It is important, therefore, that we look forward — that we learn the lessons of this crisis, and see clearly the risks and opportunities ahead of us.
The trends in three interconnected key areas: the environment, socio-economics and health. These trends help us frame the future.
Since 1976, Nasco France is committed to providing the highest level of Reinsurance services to its clients. NASCO Re, is the leading reinsurance broker in the MENA region with over 45 years of industry experience and amongst the top three largest reinsurance brokers in France.
Nasco Group operations cover Reinsurance Broking, Direct Broking, Underwriting & TPA.
Joe Azar is the Chief Executive Officer of Nasco Re Pole managing all Reinsurance entities of Nasco Group.
This month, BUSINESS LIEF had the opportunity for an exclusive interview with Joe Azar.
BL: What are the lessons that we learnt from Covid-19 crisis, and how clearly do we see the risks and opportunities ahead of us?
Joe Azar: Since the Covid outbreak, we have transformed deeply the way we live and interact. We have privileged remote work setting and encouraged on line meetings with digitalization, we can now work from any place in the world and restrict the need for office space.
The virtual meetings using the power of communication platforms are being found quite efficient in speeding up decision making, enhancing productivity and reducing travelling costs
The need to share Company values and culture particularly for new joiners and young or inexperienced staff require an investment in time from the managerial staff to connect with others. it is essential for Leaders to dedicate enough time to maintain and encourage dialogue between staff with the view of reducing the threats of Work from home
BL: Do you agree that inclusive insurance needs more innovation and more cost reducing mechanisms?
Joe Azar: Most insurers are embracing the need to grow their digital capabilities. Technology will empower insurers to accelerate growth and streamline underwing and claims processes in the way to contain expense ratio.
Insurtechs are introducing innovative business models focused on customer satisfaction offering on line coverage at affordable cost thus closing the gap between what conventional insurers are offering and what customers could expect in today’s world
By establishing partnership with insuertechs, insurers will get faster access to a customer centric infrastructure for the purpose of handling product design, distribution and management at convenient and optimal cost
BL: How is the insurance industry adjusting its approach of CAT models?
Joe Azar: Cat modeling is a scientific analysis of exposures aimed at predicting the likely extent of loss in the event of a catastrophe occurrence
Reinsurers will run a probabilistic model to arrive to loss distribution curve allowing to predict loss scenarios based on different return periods. This will be used to assess the protection to be purchased, and consequently structure and price the cover offered.
Data analysts are today moving away from static data to online data covering human mobility and climate change to allow models to evolve with environmental changes
Nasco is today offering clients across the Mena region the cat modeling service covering EQ perils.
BL: Is it possible that Nat CAT risk exposure could be underestimated? Why?
Joe Azar: Cat models have their limitations. When we run two different models, we should not expect identical results (EP).
Changes in climate, infrastructure and building standards might make underlying data used in building model less reliable
The timespan for claims data may also influence loss distribution. Past losses are not always equivalent to future losses
Data related to Geographical exposures including building quality and structure types, vulnerability functions (linked to occupancy) and hazard are all key in driving uncertainty.
Nat Cat exposure can be under estimated in few circumstances when confronted to unusual loss severity.
BL: It is said that cyber insurance premiums are expected to rise sharply in 2021-2023, why?
Joe Azar: Premium levels of Cyber insurance are expected to rise sharply as a result of the recent increase in frequency and severity of losses.
Cyber criminals found in the facilitation of remote work new opportunities to launch more attacks
Ransomware demands are increasing in both number and average cost whilst frequency of fraudulent transfers and email intrusion added to ransom will represent the vast majority of number of losses
The vulnerability is high enough and tends to target not only large Companies but also SMEs.
Nasco has designed in cooperation with one of the major Reinsurers an electronic underwriting platform to distribute and manage Cyber insurance to SMEs in the Mena region, which will be launched before year end.
BL: What markets do you think your company should get and why?
Joe Azar: Nasco enjoys a strong presence in the Mena region and is looking to expand in many other Markets. Africa is on our Road map and our plans for East Africa have led us to enter recently in partnership with a reputable reinsurance Intermediary based in Kenya.
In the Indian sub-continent, we are reinforcing our presence in India and Pakistan and extending operations to Sri Lanka and Bangladesh.
In Asia, Nasco Korea is our arm to accompany Asian ventures in the Mena region.
East Europe is our next area of Growth.
From a product perspective, we are increasingly focusing on specialty lines.
Our position as Lead provider of Political violence capacity since decades is now being extended to Casualty lines of business including Professional indemnity and Cyber.
BL: Currently, how do you plan to help your business grow?
Joe Azar: Growing business in our industry requires above all growing the people at all levels. Nasco Is home to many Top experts among the best in their specialty across the Region.
We are also constantly training our staff so they improve their technical skills and broking capabilities.
In the recent years, we have invested in digital solutions and initiated Nasco digital Factory with the view of managing efficiently the book of business handled by Nasco underwriting Agencies. Our platforms for fac placements can handle on line underwriting for Property, Cyber and Group Life fac Reinsurances. We are now in position to support all our health clients with pricing tools for their Group Medex business.
BL: What is your opinion on Lebanon’s current economy and the political dilemma? How to move forward with our beloved Lebanon?
Joe Azar: Lebanon is going through unprecedented crisis on both economic and political front! I shall comment only on the economical side.
Even with the most sophisticated predictive model, we would land nowhere until serious reforms are implemented to restore confidence. The path to recovery appears to require the adoption of IMF program so we may unlock necessary international financial support.
The Banking sector now holding significant amounts of government debt needs also a smart financial restructuring without transferring the entire burden to the depositors in view a severe haircut would translate into higher level of distrust in financial institutions.
At Nasco, we are deploying every effort to accelerate the reinsurance recovery of Beirut Blast claims. Now that we are close to 2022 renewal season, our priority is to make sure the traditional reinsurance partners maintain their appetite for Lebanese business and do not privilege the exit in view of the challenging conditions!
