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Transcript of Intercona Re - Nestlé’s Captive - SIRM · Intercona Re - Nestlé’s Captive The successful use...
Intercona Re - Nestlé’s Captive The successful use of a captive as a loss prevention enabler
Andrew R. Bradley
Head of Group Risk Services, Nestec Ltd
and CEO of Intercona Re
3
Our ambition
3 3
Enhancing people’s quality of life…
… through nutrition health and wellness…
… with science-based innovations
SIRM Forum Presentation
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Nestlé at a Glance
5 5
CHF 91.6 billion in sales in 2014
339,000 employees in over 150 countries
442 factories in 86 countries
Over 2,000 brands
1 billion Nestlé products sold every day
SIRM Forum Presentation
Sales by Regions
6
Asia, Oceania
and Africa
CHF 22.4 bn
* Each region includes Zones, Nestlé Waters, Nestlé Nutrition, Nestlé Professional, Nespresso, NHS and NSH
Europe, Middle-East and
North Africa
CHF 29.8 bn
Americas
CHF 39.4 bn
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Contribution to Group Risk Reduction
Insure Plan Prevent Anticipate Accept
Risk
size
Decision
support
Risk
size
Prevention
Prepardness /
Recovery
Financing
Residual
Risk Reduction
Contribute to achieve objectives
and protect company's value
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From "cash box” to central risk management tool
Captive
Risk financing,
…
8 8 SIRM Forum Presentation
• Châtel-St-Denis, Switzerland reinsurance captive
• Established in 1998
• C1 Professional Reinsurance License
• Share Capital CHF 35 mio (2014) / Equalisation Reserves
CHF 296 mio (2014)
• Annual Premiums CHF 148.7 mio in 2014 (CHF 152 mio in 2013)
• Diversified portfolio
• Technical Reserves CHF 219.5 mio (2014)
• Combined Ratio 2012 to 2013: 90%, 68%, 85% (Average 81%)
• Invested Assets CHF 680 mio (2014)
• AM Best rating A+ (Superior) (2015)
10 10 SIRM Forum Presentation
Risk retained within the Group
True Risk Transfer
Risk Financing Model
12
Local
Policy
Local
Policy
Local
Policy
Local
Policy
Pooling Insurer
Intercona Re
Catastrophe Cover
Pre
miu
ms C
laim
s
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Let’s start with a simple approach
This is very well aligned with
Nestlé's philosophy.
Why Loss Prevention ?
SIRM Forum Presentation
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Compliance
Duty of Care
Good Governance – Protecting lives and assets
Corporate and Social Responsibility
Creating Shared Value / Sustainability
Quantifying exposure
Reputation
Operational efficiency
Increased robustness / Business Continuity / Loss of Market
Cost savings
Why Loss Prevention ?
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Loss Control & Loss Prevention Funded By Intercona RE S.A
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Property Loss
Prevention Program
Supplementary Safety Audits
BELFOR –restoration
Virtual Fleet
Manager/ Driver Safety
Thermo Scanning
Transport/ Marine loss prevention
F Manual/ Loss Prevention
Manual
Business Continuity: BIA/BCP
Virtual Fire Manager
Schneider Electric pilot
studies
RISK
SIRM Forum Presentation
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Electricity Fire losses
Japan Himeji Dec 2014
Inappropriate
maintenance
-
ZRE participation to
Nestlé CO-Engineering
Global Electrical
Workshop Feb 2015
Hot work /
Dust explosion Fire explosion
Flagstaff USA
Inappropriate control
Exploded
Normal
Fire Fire losses
Benha Feb 2013
Inappropriate design
-
GRS and ZRE several
presentation of the
case in 2013 and 2014
Natural Hazards Lost goods
Philippines several
storms
Inappropriate design
-
GRS Natural Hazards
risk assessment
workshop Nestlé
Philippines
April 2015
Losses
SIRM Forum Presentation
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Schneider
MP4 audit
Communicating
lessons learned
Employee
training
Greenfield &
refurbished
sites
validated by
Zurich
No more
Poor sites
Agree on
Global
Standard
Key sites
minimum of
Good
‘’… one fire, is one too many …’’
Solutions
SIRM Forum Presentation
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A few examples
Missing wheel handle.
What if it must be
handled in an
emergency?
Corroded sprinkler pipe.
Will any water come out of it ?
Will this bonding strap
effectively dissipate
electrostatic charges in
this combustible dust
environment?
Equipment indicated by site as
lightning protection. These
appeared to be communication
antennas.
This dry pipe valve was tested with ZRE and water reached
sprinkler in 5min20” instead of 40sec required. Installation of an
accelerator will reduce loss estimate from USD 12,5M to 2,5M.
What deficiencies do site visits highlight ?
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Condition of Waterproofing Membrane and
roof Panels
Earthquake resilience i.e. fire fighting sprinkler
water piping, adequacy of racks for seismic
foces
What deficiencies do site visits highlight ?
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Technical Support • New construction
• CatNat studies
• Improving existing sites
Lessons learned • Pass the message !
Loss Prevention
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road traffic deaths occur every year
Road traffic injuries: the FACTS
1.24 million
cause of death among
those aged 15-29 years #1
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How can we help?
• Gap Analysis
• Virtual Risk Manager
• Telematics
• Communication / Training
material
• Benchmarking
• Country Profile
• Arrive Alive Game
26 SIRM Forum Presentation
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Safe Driving contributes to the well-being of our Employees and Contractors
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Marine Loss Prevention
29 29
Pre loading / discharge surveys for
Equipment valued ~CHF 1 Mio
(per conveyance) or key equipments
Tracking device for
trial shipments
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Project cargo surveys Intercona sponsors preloading/ discharge surveys for equipment with value ~CHF 1 mio or oversized
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Risk Anticipation maturity level
BCM
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Maturity level
Imp
act
on N
estlé
Emergent
Emergent
Mature
GLPP
Motor
Marine
Wellness
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Was Captive a success ?
• Underwriting profit delivered every year since 1996
• Millions of profit taken out of Insurance Market
• P+C Insurance budget reduced by using Intercona and Global
Programmes
• Loss Prevention financed by Intercona drastically improved:
- Property grading
- Motor Losses
- Marine Losses
• Improved knowledge of exposures – EML/PML
Conclusion
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80.9
17.3 19.6 18.3 19.3 21.4
12.9
52.7 47.7 48.7 56.2 54.4
93.8
70.0 67.3 67.0 75.5 75.8
0.15%
0.08%
1996 2010 2011 2012 2013 2014
Premiums toIntercona in mioCHF
Premiums to thirdparties mio CHF
Premiums on Sales
33
• Company’s turnover has increased by 50%
• Property damage / Business interruption loss limit increased from CHF 400 mio to CHF 750 mio
• Scope of coverage has broadened, e.g. Business interruption, D&O, Construction, etc.
• New lines of businesses are written, e.g. Pharma
• Coverage has been expanded to higher risk countries (and businesses thereof)
Development of Property & Casualty Premiums 1996 / 2014 (Property, Liability, Marine, Auto, CAR, D&O, excluding workers compensation and employee benefits)
(Premiums have declined (-CHF 18 mio) despite increased risks covered)
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Key Messages
34 34
Insurance Has Never
Prevented A Loss
Risk Management
& Loss Prevention
Is Key
“Nestlé money” anyway!
It’s
SIRM Forum Presentation