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NASCO KARAOGLAN GROUP THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION.

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Presentation on theme: "NASCO KARAOGLAN GROUP THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION."— Presentation transcript:

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2 NASCO KARAOGLAN GROUP THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION By: DR KHALIL TALEB By: DR KHALIL TALEB

3 CONTENTS 1. Introduction 2. Configuration 3. The Brokers Role 4. His Duties 5. Diagnosis of Risk/Insurance Requirements 6. Risk Analysis 7. Risk Management 8. Services to the Client 9. Security Issues 10. Benefits of Appointing a Broker 11. Conclusion

4 CONFIGURATION CONFIGURATION DIRECT INSURED DIRECT BROKER/CONSULTANT BROKER Person Property Liability Insurance Company Reinsurance Company Broking Firm Function is identical but its application varies He works for the Client but is generally remunerated By the Underwriters and/or Reinsurers REINSURED/INSURER REINSURANCE BROKER

5 THE BROKERS ROLE HE IS To be versed technically To be versed technically To be a Mediator To be a Mediator To be a Moderator To be a Moderator To be a Catalyst To be a Catalyst To be Assessor of Information To be Assessor of Information To Filter the information To Filter the information To be a Translator of culture To be a Translator of culture To be aware of : To be aware of : 1- Client's need 1- Client's need 2- Clients requirements 2- Clients requirements 3- The prevailing environment be it, Market, Political, Economic or Social Issues 3- The prevailing environment be it, Market, Political, Economic or Social Issues 4- The forces prevailing in the market 4- The forces prevailing in the market BUT HE IS NOT A simple intermediary A simple intermediary A post office A post office A Silent Partner A Silent Partner

6 HIS DUTIES 1. Ensuring that all information about the risk received are well presented to the Underwriters/Reinsurers Concerned 2. Ensuring that the Client disclose all material facts in appropriate form to the Underwriters 3. Possessing a flexibility to adapt to his Clients needs & requirements in a particular geographical zone 4. Possessing the ability to deliver a Tailor made product (service) 5. Having global connections to follow on Clients geographical expansion 6. Ensuring a close relationship with underwriters 7. Containing the blame

7 DIAGNOSIS OF RISK / INSURANCE REQUIREMENTS Assessing the insurable interest (be it Property, Person or Liability) such as the property in the course of construction for C.A.R or The Ship for a Hull Policy and appropriation to the Owner of such property Assessing the insurable interest (be it Property, Person or Liability) such as the property in the course of construction for C.A.R or The Ship for a Hull Policy and appropriation to the Owner of such property Assessing the risk to be insured and providing the right conditions to be given to the risk (Property to be insured/concerned). For example, Institute Yacht Clauses not appropriate for an ocean going vessel or Institute Time Clauses not suitable for pleasure boat etc. Assessing the risk to be insured and providing the right conditions to be given to the risk (Property to be insured/concerned). For example, Institute Yacht Clauses not appropriate for an ocean going vessel or Institute Time Clauses not suitable for pleasure boat etc. Ensuring the right coverages given after handing over of a project such as decennial liability in a C.A.R policy &/or such protection as business interruption following a delivery of a vessel or the like… Ensuring the right coverages given after handing over of a project such as decennial liability in a C.A.R policy &/or such protection as business interruption following a delivery of a vessel or the like… Providing affiliated coverages that need to be looked upon such as workmen compensation, crew personal accident, etc… Providing affiliated coverages that need to be looked upon such as workmen compensation, crew personal accident, etc…

8 DIAGNOSIS OF RISK / INSURANCE REQUIREMENTS Designing Treaty Reinsurance Program according to each Countrys specific need and local regulations. Designing Treaty Reinsurance Program according to each Countrys specific need and local regulations. 1.Natural Perils/Earthquake/Flood Exposure 2.Unlimited Motor Liabilities 3.Medical/Labor Law

9 RISK ANALYSIS THE BROKER THE BROKER 1. Should have the technical ability and knowledge of the risk to advise the Client of the possible/probable damage as to number and size of claim(s) in order to work out the level of self-insurance (through deductible bearing or otherwise) with a view to minimizing the cost of insurance. 2. Should have the technical ability and knowledge to determine the most appropriate method of risk financing and to assist the Client to assess the optimum of risk assumption and risk transfer. 3. Should have the ability to discuss technical matters with risk managers &/or surveyors &/or risk assessors in order to provide the Client with the appropriate technical advices with a view to bettering the risk and allowing a saving on the cost of insurance. 4. Should have the ability to assist the insurance companies to design their Treaty Reinsurance programs in determining the risk profiles / statistics / the max aggregate exposure

10 RISK MANAGEMENT Following risks analysis, a risk management would be needed. It is aimed at containing the risk of loss. Following risks analysis, a risk management would be needed. It is aimed at containing the risk of loss. Risk Management comprises 3 phases : Risk Management comprises 3 phases : 1. Identifying the risks which are likely to affect a property, such as natural hazards, bad management or negligence 2. Assessing the risk, such as evaluation and quantification of the possible amount of a claim (both severity and frequency) and the likelihood of a particular happening. 3. Controlling the risk, as to the extent of, measures or precautions taken to eliminate (loss prevention) or minimizing the overall cost of a claim.

11 SERVICES TO THE CLIENT 1. Negotiating competitive/realistic pricing 2. Ensuring competition among the various underwriters in the market 3. Providing broadest coverage available which suits the Clients insurance needs 4. Insuring favourable relationship with insurance markets 5. Assessing accurate budget forecasting 6. Screening financial capacity of insurance markets 7. Ensuring swift loss recoveries 8. Assuring market intelligence 9. Forecasting environmental changes 10. Developing wordings appropriate to Clients needs 11. Being proactive in claims handling

12 SECURITY ISSUES It is the duty of the Brokers to ensure that all Companies with whom they place insurance are financially sound and factually satisfy the Brokers responsibility to their Clients. An assessment of the underwriters should take into consideration the following criteria : It is the duty of the Brokers to ensure that all Companies with whom they place insurance are financially sound and factually satisfy the Brokers responsibility to their Clients. An assessment of the underwriters should take into consideration the following criteria : 1. Financial Aspects 2. Domiciliation 3. Ultimate Ownership 4. Reinsurance Protections 5. Management 6. Whether Long Tail and Us Business are heavily written 7. Government supervision & regulations 8. Currency Regulation 9. Past Performance

13 BENEFITS OF APPOINTING A BROKER 1- FINANCIAL Independent advice without extra cost Independent advice without extra cost Reduction in premium through competition Reduction in premium through competition Reduction in administrative expenses Reduction in administrative expenses Bargaining Power Bargaining Power Choice in Insurance and Reinsurance Securities Choice in Insurance and Reinsurance Securities Management of premium payments / claims collection Management of premium payments / claims collection Analysis of scope of coverage at no extra cost Analysis of scope of coverage at no extra cost Provision of packaging deals Provision of packaging deals Free legal advice where needed Free legal advice where needed

14 BENEFITS OF APPOINTING A BROKER 2. OPERATIONAL Quality presentation of information to underwriters (slip) Quality presentation of information to underwriters (slip) Flexibility in the choice of Insurance / Reinsurance terms Flexibility in the choice of Insurance / Reinsurance terms Experience in answering questions to underwriters without bothering the Client, whenever possible Experience in answering questions to underwriters without bothering the Client, whenever possible Technical support to local insurers Technical support to local insurers Continuity with the International Markets Continuity with the International Markets Expert advice on the implications of contractual needs, legal matters and associated insurance requirements Expert advice on the implications of contractual needs, legal matters and associated insurance requirements

15 BENEFITS OF APPOINTING A BROKER 3. CLAIMS Recommendations of loss Adjusters according to the peculiarity of the claim and territory Recommendations of loss Adjusters according to the peculiarity of the claim and territory Expert negotiations with the parties concerned in the interest of all Expert negotiations with the parties concerned in the interest of all Control of collection from the Reinsurers/Insurers with minimum delays Control of collection from the Reinsurers/Insurers with minimum delays Control of currency fluctuation in claims settlement Control of currency fluctuation in claims settlement

16 CONCLUSION The Broker forms an integral part of the Insurance Industry and its promotion will do nothing but boost its development. The Broker forms an integral part of the Insurance Industry and its promotion will do nothing but boost its development.


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