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Score! Culture & Compliance in Latin America’s Hottest Market: BRAZIL. Our Speakers: Debbie Rodgers Senior Vice President, Global Risk Management, Aramark Angelo Colombo President and CEO, Allianz Global Corporate and Specialty Moderator : Geoffrey Peters - PowerPoint PPT Presentation
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Score!Score! Culture & Compliance in
Latin America’s Hottest Market: BRAZIL BRAZIL
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Our Speakers: DEBBIE RODGERSDEBBIE RODGERS Senior Vice President, Global Risk Management, AramarkSenior Vice President, Global Risk Management, Aramark
ANGELO COLOMBO ANGELO COLOMBO President and CEO, Allianz Global Corporate and SpecialtyPresident and CEO, Allianz Global Corporate and Specialty
Moderator: :
GEOFFREY PETERSGEOFFREY PETERSManaging Director, Willis North America-InternationalManaging Director, Willis North America-International
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What to Expect
• Challenges dealing with the Brazilian landscape involving a major event
• Brazil as an emerging power but still in a growth mode• Risk Management best practices and the consequences of non
compliance• Industry-specific insurance changes and trends • Program implementation challenges and strategies
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Brazil Overview • 5th largest country in area • 7th in GDP US $2.2 trillion • Population : 200M• Unemployment : 6%• US companies operating in
Brazil: more than 200 of top 500.
• Insurance markets in Brazil forecasted to grow at an average rate of 10%.
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2014 FIFA World Cup
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Scope of Services
• Public Catering Operation – Concessions, commercial display area, regional items and beer garden
• “Catering Operational Services” - FIFA / LOC staff, Media Center, volunteer program, youth program and locker room food and beverage services
• Third Party Restaurant – Cleaning and security crew, stadium staff
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FIFA Confederations Cup• June 15 – 30, 2013
• 6 venues
• Challenges No prior business in Brazil New business partner Stadium readiness Stadium infrastructure Contracts Protests Health & safety hazards
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2014 FIFA World Cup
FIFA’s Vision:Develop the game,Touch the world,Build a better future.
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The Stats
646433331212
3.5 M3.5 M12K – 14K12K – 14K
MatchesDaysCitiesSpectatorsEmployees to be vetted by FIFA, hired / trained
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FIFA World Cup• June 12 – July 13, 2014
• 12 widely spread venues
• Expectations Equipment requirements defined
well in advance Larger menu variety (including hot
food items and regional food items) Extended beverage service
programme Higher speed of service
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Risk AssessmentRef Category Risk that… Leading to…
Likelihood (high,
medium or low)
Impact(high,
medium or low)
Mitigating actions
1
Infrastructure /Design
Power supply may be interrupted, inadequate for stadium operations
Potential loss of facilities operation, inventory, disruption and/or inability to continue services during the World Cup High High
Back-up power supply, water supplies and contingencies should be developed for such risks. Develop alternate menus and ready-to-eat foods (sandwiches). Utilize disposable cutlery, hand sanitizing stations.
16 Systems
Insufficient communication tools available in steady state and emergencies
Failure to communicate in a timely manner Low Medium
Provision of adequate communication tools and communication protocols. Source satellite phones for any emergencies.
18 Supply Chain
Product is not delivered by suppliers in accordance with any packaging guidelines and ARAMARK stds (packaging, temperature, expired product)
Food waste, operational inefficiencies and added costs Low Medium
Pre-planning, proper communication and mutual understanding with suppliers on ARAMARK Stds, supplier contracts, proper insurance indemnifications, adequate controls in the receiving area
36 Food Safety Improper use or storage of chemicalsContamination of food and/or injury to employees. Low Low
Properly label chemicals and train all employees on use and handling of chemicals.
53
Employee/Customer Safety
Storage area operations do not follow appropriate storage and usage guidelines
Potential for operational inefficiencies and employee injuries from falling objects, slips, trips, manual handling etc. Medium High
Proper training to ensure proper layout, storage and racking in warehouse. Lift trucks and pallet jacks used for movement of boxes etc..
71 Staffing Untrained, inexperienced,workforce
Injuries to employees and customers from lack of following proper procedures and inability to provide a high standard of service High High
Proper recruitment, training and onboarding program, rewards and recognition program should be developed and implemented. Expectations on scope of work should be clearly communicated during recruitment phase.
101 Security
An act of terrorism, protest, fights, strikes will occur in the stadiums or within the general vicinity including transportation routes etc.
Disruption of operations and potential injury to employees, clients, and participants. Disruption to the food supply and/or restriction of travel and/or access to stadiums. High High
Develop critical incident plan specific to the venues. Have an evacuation plan in place for personnel. All staff should be trained on expectations, roles and responsibilities during a critical incident. Proper communications protocols should be established.
95
Epidemic/Pandemic/BioRisk
Employees, key management staff get infected by malaria, yellow fever or dengue in cities known to have these diseases
Key management staff becoming sick and unable to work during the World Cup resulting in operational inefficiencies High High
Vaccinations, increased handwashing and sanitizing, awareness, training and monitoring of employees, signage, monitoring of World Health Organization alerts, back-up contingencies/alternate decision makers for key management personnel.
105 FinanceImproper cash handling and security around deposits Financial losses, client dissatisfaction High High
Consider installation of surveillance cameras, proper accounting protocols, training
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Wednesday, February 26, 2014 / Courtesy of BusinessInsurance.com
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Allianz Global Corporate & Specialty
Brazilian Insurance & Reinsurance Markets
Sao Paulo, February 2014
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Brazilian Insurance Market Insurance & Reinsurance markets have significantly grown over the last years
Insurance Premium
Premium Ceded to Reinsurance
Local
Admitted
50.036
58.178
66.241
77.498
CAGR 16%
CAGR 21%
Premium in BRLm
Source: SUSEP
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Brazilian Insurance Market Decreased profitability in reinsurance as complex risks have been progressively transferred from insurers to reinsurers
Source: SUSEP, Terra Brasis Report
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New Regulatory FrameworkLocal Admitted Occasional
Minimum Capital USD 30m USD5m none Right of first refusal
40% of treaties and facultative
none none
Retrocession to markets other than Admitted and Occasional
None Yes Yes
Max book Retrocession
50% No limitations No limitations
Restriction to insurers
None None Cession limited to 10% of reinsured portfolio,
except surety Intra Group restrictions
None* Limited to 20% per contract
Limited to 20% per contract
Credit rating Locally established
Mirrors head office
Mirrors head office
* Intragroup Retrocessions limited to 20% per contract
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Wording: new regulation increases complexity
Only admitted policies allowed
Standard wording by line of business provided by the insurance regulator (Susep)
Risks required to be classified under 7 specific lines of business, additional complexities to create multiline insurance (Susep’s Rule 395)
Since June 2013, singular insurances are no longer authorized (Susep’s Rule 458)
Non-standard policy wordings adapted to the needs of the insured through particular clauses or additional covers can still be used, but must be previously approved by the regulator, with the corresponding actuarial note (3–4 months)
Arbitration clause: local legislation requires written agreement by the client
Portuguese wording prevails in bi-lingual policies / slips
Susep’s mandatory clauses in slips: insolvency, intermediary, cancellation, law & jurisdiction
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Claims: in line with global practices Loss Adjuster must be assigned by the carrier in the local market, renowned international loss adjusting companies have local representation in Brazil
Handling process fully aligned with global practices
Law firms involved in claims litigation must have local representation, specialized local and global law firms have local offices in Brazil
Local Reinsurers may enforce claims control
Large insurers and reinsurers have fully dedicated staff to all lines of business
Average time of claims settlements, after adjustments:
Insurers: 30 days
Reinsurers: 8-10 days
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Carrier
3rd Party Reinsurer
Reinsurer (HQ)
Brazil
Outside Brazil
Taxes Overrider Total Costs
0% 7,5% 7,5%
+ 2,0% + 0,38% + 1,3875%
5% on cession 8,7675%
0% 5% on cession 5%
Premium Flow – Option 1
Insured
Reinsurer Local License
0% Cost of Capital Cost of Capital
Captive
Local Placement
100%
100%
100%
100%
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Carrier
3rd Party Reinsurer
Reinsurer (HQ)
Taxes Overrider Average Costs+ 2,0% + 0,38% + 1,3875%
7,5% 11,2675%
Premium Flow - Option 2
Admitted Placement
Local Reinsurer
0% Cost of Capital Cost of Capital
CAPTIVE
0% 7,5% 7,5%
Average CostsTaxes Overrider
Local Placement
+ 2,0% + 0,38% + 1,3875%
5% on cession 8,7675%
0% 5% on cession 5%
0% Cost of Capital Cost of Capital
Brazil
Outside Brazil
Insured
20%
80%
80%
80%
100%
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Carrier
Reinsurer 2
Taxes Overrider Average Costs+ 2,0% + 0,38% + 1,3875%
7,5% 11,2675%
Premium Flow - Option 3
Admitted Placement
Reinsurer 1 Local
0% Cost of Capital Cost of Capital
CAPTIVE
0% 7,5% 7,5%
Average CostsTaxes Overrider
Local Placement
+ 2,0% + 0,38% + 1,3875%
5% on cession 8,7675%
0% Cost of Capital Cost of Capital
Brazil
Outside Brazil
Insured
60%
40%
40%
100%
International Insurance Programs: solution for clients with international exposure
Geographical territories
Polic
y sc
ope
(lim
its a
nd c
ondi
tions
)
Geographical territories
Polic
y sc
ope
(lim
its a
nd co
nditi
ons)
Captive fronting based on client needs
Harmonizing overall coverage by including local companies under the Master in DIC / DIL
Local policies follow best market standards
Administration of local taxes
Taking local supervisory aspects into consideration, e.g. minimum local retention
Including mandatory local coverage
Adequately reflecting and covering client local risk
Risk based premium allocation
Potential sharing of risks with a panel of coinsurers / reinsurers
Pooling of local policies via reinsurance *)
Sing
apor
e
DIC/DIL
Germ
any
Italy
Aust
ria
Aust
ralia
Thai
land
US
1U
S 2
US
3
Umbrella
Property Example
Liability Example
Sing
apor
eDIC/DIL
Germ
any
Italy
Aust
ria
Aust
ralia
Thai
land
US
FOS(optional)
Germ
any
Italy
Aust
ria
FOS not recommended
* to the degree legally permitted
Local policies issued dependent on risk and maturity of market:Master cover provides global umbrellaHarmonized coverage across the programCombines best local practice with global requirementsLocal regulations are complied with (taxes/levies)Premium is allocated in relation to localrisk and exposure
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Questions, Final Comments and Contact Information
GEOFFREY M. PETERSManaging Director
Willis North America - Internationalemail: [email protected]
ANGELO COLOMBOPresident and CEO
Allianz Global Corporate & Specialtyemail: [email protected]
DEBBIE RODGERSSVP, Global Risk Management
Aramark Corporationemail: [email protected]
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Please complete the session survey on the RIMS14 mobile application.