Read Full Supplement Here. 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, CEO Nasco Re (the reinsurance broking arm of Nasco Insurance Group) is based in France and has over 41 years’ experience in the industry. He started his career with SNA Allianz in 1977 where he spent 13 years as Head of the International department. In 1990 he moved to Arab Insurance Group as Treaty Underwriter, before taking responsibility for the Business development Division. He joined Nasco in 1992 as Director for Treaty and became Chief operating officer in 2013 and member of the Nasco Group Board.
Joe looks after all the Nasco Reinsurance broking offices.
Joe Azar is outspoken on many insurance and reinsurance issues. His dynamism and vibrant personality made him one of the key figures of the industry and a leading force in the NASCO Insurance Group.
Nasco Insurance Group was Founded in Lebanon in 1969. NASCO currently operates in Lebanon, the UAE, Saudi Arabia, Qatar, Turkey, Iraq, Tunisia, Nigeria, Egypt and France.
NASCO France is the leading reinsurance broker of the MENA region and is one of the Top 3 reinsurance Brokers in France. The company was founded in 1976 in France. NASCO Re manages a large reinsurance book with a turnover of $1 billion in transacted premiums and serves clients in more than 60 countries. The company enjoys a strong reputation and image with recognized skills and abilities.
Nasco France also operates as a direct insurance broker, offering highly dedicated and personalized consultative services.
Joe Azar talked with BUSINESS LIFE’S reporter on earthqueakes and their impact on insurance and reinsurance industry and the challenges and opportunities for the Arab insurance market especially that earthquakes are the deadliest natural hazard and cause devastating damage. As they are impossible to predict, better protection is crucial.
Joe Azar added that The 9th AqabaCon 2023 is a great insurers and reinsurers gathering.
BL: What was the most recent earthquake in 2023?
Joe Azar: Every day, a number of earthquakes occur worldwide, but only “significant earthquakes,” with high magnitude are being reported by EQ monitoring systems.
In 2023, 66 significant earthquakes were recorded across various countries, including the United States, Turkey, Australia, Japan, Indonesia, Russia, Chile and Iran.
The three earthquakes with the highest magnitudes in 2023 were:
Pulau Tanimbar, Indonesia: in January 2023, an earthquake of magnitude 7.6 occurred at a depth of 105 kilometers. Due to the epicenter being in the Banda Sea, there was luckily limited number of casualties and modest damage.
Pazarcik & Kahramanmaras earthquakes in Turkey: in February 2023, with a magnitude of respectively 7.8, followed on the same date, by another earthquake of 7.5 magnitude.
The First earthquake caused extensive landslides and significant liquefaction which triggered the second earthquake.
BL: How many earthquakes in Turkey 2023? Earthquake damage in Turkey set to exceed $100bn, what are your remarks and its impact on your industry?
Joe Azar: In Turkey, thousands of earthquakes of various magnitudes happen each year.
In 2023, Turkey faced a series of devastating earthquakes. The above 2 earthquakes have occurred on February 6th, followed by a 3rd on February 20th, with a magnitude of 6.3 striking the Turkey-Syria border. These events resulted in extensive damage across southern Turkey and northern Syria.
The cumulative effect of these earthquakes is expected to exceed $100 billion in terms of total economic losses.
According to the data provided by a catastrophe modeling company, these earthquakes triggered significant insurable losses.
The projected insurable loss for the Feb 6th two earthquakes ranges from $4 billion to $7 billion USD. This estimate covers damage to residential, commercial, industrial, and agricultural properties, without accounting for losses related to infrastructure or business interruption
The estimated insurable loss for the February 20 earthquake alone is projected to reach up to $1 billion USD.
The impact of these earthquakes underscores the importance of the insurance industry’s resilience. Insurers and reinsurers must have robust catastrophe modeling capabilities and a comprehensive understanding of earthquake risks.
Given the substantial financial exposure resulting from these earthquakes, reinsurers play a key role in spreading the risk across the global reinsurance markets.
However the insurance Gap remains an area of concern, which needs to be addressed with the view of enhancing protection across the country.
BL: Was there an earthquake in Jordan in 2023?
Joe Azar: Jordan is prone to earthquakes due to its geographical position in a seismically active region along the boundary between the Arabian and African tectonic plates.
One notable seismic event in recent history occurred on December 13, 2018, when a 4.5 magnitude earthquake was reported in the Dead Sea region, causing widespread panic and resulting in few casualties.
The establishment of the Jordan Seismological Observatory (JSO) has played a crucial role in monitoring seismic events in the country. The JSO, in collaboration with international seismic experts, works towards improving earthquake forecasting and providing early warning systems.
In terms of infrastructure and building codes, Jordan is implementing regulations that aim to enhance earthquake resistance. These measures include incorporating seismic design in the construction of critical facilities, such as hospitals, schools, and high-rise buildings.
In the past 10 years 56 earthquakes, with a magnitude of four or higher, occurred within a 300 kilometer range from Jordan. This translates in an average of 6 earthquakes yearly, or one earthquake every 65 days.
In 2023 a total of 14 earthquakes were detected within the same distance from Jordanian Border.
BL: The strongest recent earthquake of the past 10 years near Lebanon occurred on Feb 20, 2023 19:04 local time (Asia/Beirut timezone). It had a magnitude of 6.3 and struck 257 kilometers (160 mi) north of Ra’s Beirut, at a depth of 16 km, is Lebanon prone to earthquakes? What is the risk of a major earthquake in Lebanon?
Joe Azar: Lebanon is located in a seismically prone region known as the Eastern Mediterranean. This region, situated at the convergence of several tectonic plates, is known for its geological instability and the potential vulnerability to earthquakes.
The risk of a major earthquake in Lebanon should be taken seriously. While it is challenging to predict the timing and magnitude of future earthquakes, experts confirm the likelihood of the occurrence of a major seismic event.
The seismic risk in Lebanon is influenced by the strain accumulation along active faults, namely Roum, Yammouneh, Serghaya and Rachaya Faults. Other factors include historical earthquake records, and geological Landscape.
In particular, the Beirut area, situated near the active Roum and the Dead Sea faults, faces intense seismic risk. The densely populated city and surrounding regions are exposed to the potential impact of a major earthquake.
Mitigating the risk of a major earthquake in Lebanon requires implementing stringent construction standards, promoting adherence to robust building codes, enhancing awareness, taking proactive Risk management and preparing measures for necessary response.
Insurance with adequate Reinsurance protection supports the rebuilding efforts following a seismic event, and the economic recovery.
By enhancing all mitigation measures and promoting more recourse to insurance, Lebanon can work towards reducing the impact of seismic events and securing more resilience.
BL: What damage can earthquakes do? What are the losses of earthquakes?What are the risks of a earthquake?
Joe Azar: Earthquakes are natural disasters that could cause immense devastation. The severity of damage depends on various factors, including magnitude, depth, distance from the epicenter to populated areas, and the infrastructure resilience.
Potential damage could be segmented into 4 different types of damage as below:
Structural Damage: With the vulnerability of the older structures.
Loss of Life and Injuries: Casualties and injuries may result from collapsing structures, falling debris and panic during evacuation.
Infrastructure Disruption: Earthquakes could disrupt critical infrastructure systems such as utilities and transportation networks. This disruption would imply immediate emergency response
Secondary Hazards: Earthquakes may trigger secondary hazards like landslides, tsunamis, liquefaction, and aftershocks, increasing substantially the damage caused.
Earthquakes result in substantial economic losses. These losses fall under 4 categories as below:
Property Damage: Representing usually a significant share of losses.
Business Interruption: Supply chain disruptions, and reduced productivity with the resulting loss of income and employment impacts the economic growth.
Loss of Life: The loss of lives represents the most tragic segment of losses. The treatment of injuries is also another significant share of potential costs.
Social and Psychological Impact: Earthquakes can have long-lasting social and psychological effects. The need for rehabilitation adds to the above losses.
The insurance industry plays a crucial role in mitigating the financial impact of above losses, other than Category 4.
Earthquakes pose several risks including:
Human Vulnerability: Populated areas located in seismically active regions face the highest risk. The vulnerability of structures and infrastructure and the density of population, determine the potential impact.
Economic Disruption: Earthquakes affect industries, businesses, trade, and employment. Economic repercussions can be felt for an extended period.
Secondary Hazards: Hazards such as social unrest, public health crisis, and environmental consequences can compound the overall risks.
Understanding the risks of earthquakes and implementing effective risk management strategies, including insurance coverage are key to mitigating impact and improving resilience.
BL: How do you evaluate Nasco Re’s recent presentation in Aqaba?
Joe Azar: Earthquakes was the talk of the industry for the last few months. The recent Turkish/Syrian EQ shed a light on the extent of losses both in human lives and property damages leading to high economic losses. Nasco re presentation aimed at enhancing awareness and providing scientific background to assess exposures. We also discussed the different solutions adopted in few countries and proposed a solution that would fit our area and consider the specific parameters of our region.
BL: What are your views on the 9th AqabaConf 2023?
Joe Azar: There is no doubt that AqabaConf 2023 has been a great success. The number of participants including international and regional Reinsurers reveals the importance given to this event. This has provided a very professional and dynamic flavor to the meetings. We should also praise the different papers presented by the speakers which reflects the high expectation from the organizers whom we salute for a job extremely well done.
BL: What are the recent updates on Nasco Re?
Joe Azar: Nasco Re is focusing further on providing the clients with solutions. Modeling exposures, structuring covers, advice re claims adjustment and recovery, commutations of portfolios and other services are on our list. Our teams are well trained and equipped with the adequate tools to provide such services. This should take the service level Nasco provides to new heights and allow our clients to plan better for the future challenges.
