Presentation on theme: "NASCO KARAOGLAN GROUP THE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGION By: DR KHALIL TALEB."— Presentation transcript:
1 NASCO KARAOGLAN GROUPTHE ROLE OF THE INSURANCE & REINSURANCE BROKER IN THE MENA REGIONBy: DR KHALIL TALEB
2 CONTENTS Introduction Configuration The Broker’s Role His Duties Diagnosis of Risk/Insurance RequirementsRisk AnalysisRisk ManagementServices to the ClientSecurity IssuesBenefits of Appointing a BrokerConclusion
3 CONFIGURATION BROKER DIRECT INSURED DIRECT BROKER/CONSULTANT REINSURED/INSURERREINSURANCE BROKERPersonPropertyLiabilityInsurance CompanyReinsurance CompanyBroking FirmFunction is identical but its application variesHe works for the Client but is generally remuneratedBy the Underwriters and/or Reinsurers
4 THE BROKER’S ROLE HE IS BUT HE IS NOT To be versed technically To be a MediatorTo be a ModeratorTo be a CatalystTo be Assessor of InformationTo Filter the informationTo be a Translator of cultureTo be aware of :1- Client's need2- Client’s requirements3- The prevailing environment be it, Market, Political, Economic or Social Issues4- The forces prevailing in the marketBUT HE IS NOTA simple intermediaryA post officeA Silent Partner
5 HIS DUTIESEnsuring that all information about the risk received are well presented to the Underwriters/Reinsurers ConcernedEnsuring that the Client disclose all material facts in appropriate form to the UnderwritersPossessing a flexibility to adapt to his Client’s needs & requirements in a particular geographical zonePossessing the ability to deliver a Tailor made product (service)Having global connections to follow on Client’s geographical expansionEnsuring a close relationship with underwritersContaining the blame
6 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 propertyAssessing 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…Providing affiliated coverages that need to be looked upon such as workmen compensation, crew personal accident, etc…
7 DIAGNOSIS OF RISK / INSURANCE REQUIREMENTS Designing Treaty Reinsurance Program according to each Country’s specific need and local regulations.Natural Perils/Earthquake/Flood ExposureUnlimited Motor LiabilitiesMedical/Labor Law
8 RISK ANALYSIS THE BROKER 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.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.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.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
9 RISK MANAGEMENTFollowing risks analysis, a risk management would be needed. It is aimed at containing the risk of loss.Risk Management comprises 3 phases :Identifying the risks which are likely to affect a property, such as natural hazards, bad management or negligenceAssessing 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.Controlling the risk, as to the extent of, measures or precautions taken to eliminate (loss prevention) or minimizing the overall cost of a claim.
10 SERVICES TO THE CLIENT Negotiating competitive/realistic pricing Ensuring competition among the various underwriters in the marketProviding broadest coverage available which suits the Client’s insurance needsInsuring favourable relationship with insurance marketsAssessing accurate budget forecastingScreening financial capacity of insurance marketsEnsuring swift loss recoveriesAssuring market intelligenceForecasting environmental changesDeveloping wordings appropriate to Client’s needsBeing proactive in claims handling
11 SECURITY ISSUESIt is the duty of the Brokers to ensure that all Companies with whom they place insurance are financially sound and factually satisfy the Broker’s responsibility to their Clients. An assessment of the underwriters should take into consideration the following criteria :Financial AspectsDomiciliationUltimate OwnershipReinsurance ProtectionsManagementWhether Long Tail and Us Business are heavily writtenGovernment supervision & regulationsCurrency RegulationPast Performance
12 BENEFITS OF APPOINTING A BROKER 1- FINANCIALIndependent advice without extra costReduction in premium through competitionReduction in administrative expensesBargaining PowerChoice in Insurance and Reinsurance SecuritiesManagement of premium payments / claims collectionAnalysis of scope of coverage at no extra costProvision of packaging dealsFree legal advice where needed
13 BENEFITS OF APPOINTING A BROKER OPERATIONALQuality presentation of information to underwriters (slip)Flexibility in the choice of Insurance / Reinsurance termsExperience in answering questions to underwriters without bothering the Client, whenever possibleTechnical support to local insurersContinuity with the International MarketsExpert advice on the implications of contractual needs, legal matters and associated insurance requirements
14 BENEFITS OF APPOINTING A BROKER 3. CLAIMSRecommendations of loss Adjusters according to the peculiarity of the claim and territoryExpert negotiations with the parties concerned in the interest of allControl of collection from the Reinsurers/Insurers with minimum delaysControl of currency fluctuation in claims settlement
15 CONCLUSIONThe Broker forms an integral part of the Insurance Industry and its promotion will do nothing but boost its development.