Allianz Global Corporate & Specialty AGCS Liability Our solid and long term approach/ Why quality matters Michael Hohmann Global Head of Liability Moscow, 20th of June, 2012
Table of contents 1 2 3 4 5 Necessity for insurance Our products International programs Our experience Summary 2
Necessity for insurance The world is still changing.. Ongoing globalization of business activities creates increase in liability risks. Vertical range of manufacturing processes is becoming more complex, so are the risks involved. Large liability losses have attracted more and more attention from customers, the media and environmental organizations. Continuing changes in respective local legislation or legal systems lead to modified liability principles. Scientific and technological progress leads to new liability risks: Emerging Risks. Financial Crises require best rated and strongly capitalized insurers, who are critical in times of financial instability. AGCS supports you in handling these challenges with knowledge and insurance solutions 3
Foreign Trade Gross Domestic Product (change in % between 2000 & 2009/2010) 187 59 4
Necessity for insurance (cont.) Liability characteristics Long tail exposure: When an injury or other harm takes time to become known and a claim may be separated from the circumstances that caused it as many as 25 years or more Example: asbestosis, coal dust, pharmaceuticals, silica. 5
Necessity for insurance (cont.) Liability characteristics Legal changes and new legislation lead to increase in the exposure without change in client s business and without change in terms and conditions Examples: Introduction of EU-products liability law -> move to strict liability Reform of German law obligations -> extension of warranty period 6
Our products General liability insurance typically covers 3 kinds of damages: Bodily/personal injury Property damage Designated pure financial loss AGCS offers the following insurance products for each type of liability Primary Policies Excess Layers/Umbrella Policies International Insurance Programs Financial lines Casualty General liability Auto liability and other special coverages Public liability Products liability Environmental liability Product recall Products tampering Clinical trials 7
8
Liability insurance in a nutshell Industrial liability risks at a glance 9
Types of liability insurance Overview Public liability Products liability Environmental liability ( pollution ) Product recall Products tampering Clinical trials Covers the insured s operations/premises, e.g. for explosions, slip and trip claims. Covers claims caused by the insured s products/completed operations, e.g. an illness caused by harmful substances. Pollution claims caused by the insured s activities, e.g. explosion of a factory setting free toxic substances that contaminate other premises. Covers claims arising out of cases where a product recall has to be initiated. Cover is never for the costs of the defective part/product but for other costs of the recall. Covers recall expenses (such as costs for transportation, for informing the public etc.) for contaminated food and beverage products. Covers the legal liability of sponsors (pharmaceutical companies) and investigators (doctors, hospitals) arising out of a clinical trial. 10
Deepwater horizon (or: BP Oil Spill) Bodily Injuries (also Employer s Liability/Workers Compensation) Property Damage Environmental Damage - In June 2010, BP set up a $20 billion fund to compensate victims of the oil spill. As of July 2011, the fund has paid $4.7 billion to 198,475 claimants. In all, the fund has nearly 1 million claims and continues to receive thousands of claims each week. (Source: Wikipedia) 11
Global reach Our strength is our global capability Combining one of the largest own-office networks with carefully selected partners, Allianz Global Corporate & Specialty provides a truly global reach. For details on our global network please visit www.agcs.allianz.com/global-offices Covering more than 150 countries worldwide, our network ensures that clients have access to Allianz services wherever and whenever they need it. 12
International Insurance Programs (IIP) Characteristics of an IIP Benefits of an IIP Covers risks of a client in more than one country Centrally agreed scope of cover based on parent s policy Good local standard policies issued in foreign countries Considers different legal systems Compliant with tax and regulatory requirements Balance sheet protection for parent company Structure of an IIP Master cover policy Provides DIC/DIL/Step down cover in the Master policy to eliminate gaps in coverage between parent s policy and local policies Local policies placed by AGCS companies or partners 13
International Insurance Programs (IIPs) Basic structure of an IIP Liability 14
AGCS Liability We have a proven track record but don t just take our word for it. In 2010, Allianz Global Corporate & Specialty had: More than 2,000 liability accounts Over 2,750 liability policies International Insurance Programs (IIPs) with policies in more than 100 countries of which more than 70% were managed by AGCS as lead insurer AGCS provides liability cover for more than 30% of the Global Fortune 500 companies. Our market reputation as leading liability insurer means that co-insurers and brokers respect our capabilities with large programs, allowing us to coordinate the most complex IIPs across all locations. 15
Our liability insurance service in summary AGCS is determined to lead the market with our liability offering. What does this mean in practice? People Processes Reach Experience Attitude The right people in the right places a team with years of technical experience, well known to clients, brokers and the market Proven systems and procedures ensure consistent quality and transparency for the client A worldwide network delivering local services with global coordination An established track record of handling complex international liability risks with a market-leading position A partnership approach, always based on dialogue and not on debate: searching for solutions, not focusing on exclusions 16
Who s who? Global Liability Team Michael Hohmann Global Head of Liability michael.hohmann@allianz.com +49 89 3800-19248 Karin Hornstein Senior Underwriter karin.hornstein@allianz.com +49 89 3800-7649 Alfred Henneboehl Deputy Global Head of Liability alfred.henneboehl@allianz.com +49 221 5731-4535 Mikkel Hansen Head of Liability Nordic Region mikkel.hansen@allianz.com +45 32 70 00 27 Andrey Pleshivtsev Head of Liability OJSC IC Allianz andrey.pleshivtsev@allianz.ru +7 495 9562105 ext. 4104 Irina Bystronovskaya Head of Liability Russia AGCS irina.bystronovskaya@allianz.ru +7 495 9562105 ext. 5198 17
Thank you Questions?
Disclaimer These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forwardlooking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group s core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences. No duty to update. The company assumes no obligation to update any information contained herein. 19