Page 28 - 33rd Edition GAIF Pre-Conference May 2022 Issue 606

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Reinsurance Capacity remains concentrated in
the hands of few major players
* Other topics discussed in the conference are related to Internet and
cyber risks, climate change and epidemics. What are its effects on the
sector and how can we plan for it?
- On top of the Pandemic Threats, Our Industry is facing other challenges
notably Cyber Risks and Climate change.
Cyber criminals are exploiting Work from Home (WFH) wider practice to
launch more attacks. During 2021, Cybercrime cost is estimated at $ 6 Trillion.
Ransomware demands are said to have increased by 90% during the first half
2021. Hackers are going beyond the Data of their targets and threatening also
connected partners.
In this context, Cybersecurity is now attracting more attention at all levels includ- importance for sharing ideas and experiences.
ing directors in the view of enhancing controls for prevention and detection. There
is also the need to adopt every measure to enhance chances of recovery.
The Cyber Insurance Market valued at around $8 Billion in 2021, has a
tremendous potential of growth driven by stronger demand and sharp increase
of Premium levels. We should bear in mind Loss ratio for global direct book
has jumped from 47 to 73 % in 2020.
Reinsurance Capacity remains concentrated in the hands of few major play-
ers, which explains tighter terms, lower limits, higher deductibles and more
extensive exclusions. The modelling of aggregates remains also a challenging
area to Proportional Reinsurers.
In this particular environment Nasco has designed in cooperation with one of
the Major Reinsurers an underwriting platform to distribute and manage Cyber
Insurance to SMEs in the Region. We are also offering another product for
Personal Cyber with the view of enhancing Risk awareness.
In respect of Climate change, it is well established that global weather patterns
have changed over the recent decade and consequently traditional cat mod-
els in place based on historical data may not disclose accurately the true
extent of potential exposure. An increasing number of large insurers have
already started adopting climate specific stress testing to arrive to better
assessment of their financial resilience.
The findings of the Central Bank in France based on their 2021 stress test indi-
cate that Natural disaster claims could increase up to 5 fold in the most vul-
nerable regions, which would require substantial premium increase in the
coming years.
Considering the possible escalation in exposure, as a result of global warm-
ing, Our industry will need to cope not only
with underwriting risk but also the devalua-
tion, by financial markets, of assets within
investment portfolios exposed to climate
risk.
It is obvious, regulators will be pushing
insurers to reshape their business model
and integrate climate considerations in their
underwriting processes and the solvency
margin calculation. We have seen already
many players cutting exposure to carbon
intensive industries, and encouraging miti-
gation by adjusting premiums to “green”
behaviors.
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Gaif Forums represent an excellent platform
* In your opinion, what are some of the advantages achieved from previ-
ous Forums? Do you think that the GAIF succeeded in stimulating the
exchange of insurance and reinsurance premiums between Arab mar-
kets?
- Gaif Forums represent an excellent platform for the gathering of all Arab pro-
fessionals together with their reinsurance providers.
On line conferencing and remote meetings have provided a suitable solution
during lockdown periods, but everyone agrees this cannot replace face to face
meetings.
The recent shift to more remote work and less business travel could well trans-
late into higher attendance of such conferences expected to take on significant
The interaction during such event is not restricted only to the purchase of rein-
surance but extends to exposure to people , talents , products , ideas and
practices..
At the same time, this is no doubt the right opportunity to stimulate exchange
of business within the region.
Considering the strong financial strength of many Arab insurers , we are wit-
nessing a trend where these players are keen on developing an inwards book
thus growing their presence across the Mena countries and internationally.
The Gaif is the best Forum to encourage the development of Business
retained in our Home Countries vide a preferred reinsurance rooting, privileg-
ing domestic and regional players.
It is essential here to point out, Regulators in every market should ensure the
concerned risk carriers are technically and financially fit for the exercise.
Our focus today is to keep up with our strategy of geographi-
cal expansion and secure wider diversification of our book
* What can you tell participants about the progress made by your com-
pany in the recent years?
- Nasco 2021 results demonstrate a continued growth in both turnover and
profits. The same trend is reflected in the figures of the first quarter 2022 . We
fully recognize this achievement is driven by the trust and the confidence of
our client base.
Our focus today is to keep up with our strat-
egy of geographical expansion and secure
wider diversification of our book. The
stronger appetite for retail business has
also encouraged us to privilege strategic
partnership with reinsurance providers with
the view of supporting our clients on the
product innovation front.
Nasco services on Cat modeling and the
optimization of reinsurance structures offer
our partners solid support in identifying best
reins solutions and monitoring exposures.
We are also streamlining our processes
with enhanced automation securing more
transparency and greater efficiency.
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