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

Our World

2 2 SIRM Forum Presentation

3

Our ambition

3 3

Enhancing people’s quality of life…

… through nutrition health and wellness…

… with science-based innovations

SIRM Forum Presentation

The Nestlé Story

4 SIRM Forum Presentation

5

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


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


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


From "cash box” to central risk management tool

Captive

Risk financing,

…


Nestlé’s Reinsurance Captive


• 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)


Intercona Re diversified portfolio in 2014


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


13

Let’s start with a simple approach

This is very well aligned with

Nestlé's philosophy.

Why Loss Prevention ?


14

Our Intercona Virtuous Circle to Loss Prevention


15

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 ?


Loss Control & Loss Prevention Funded By Intercona RE S.A

16

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


17

The positive Impact of Property Loss Prevention


Intercona’s Mission Statement – KPIs Loss Prevention


19

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


20

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


21

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 ?


22

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 ?


23

Technical Support • New construction

• CatNat studies

• Improving existing sites

Lessons learned • Pass the message !

Loss Prevention


http://www.google.ch/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://projets-architecte-urbanisme.fr/travaux-j4-marseille-actualite-chantiers-mucem-cerem/&ei=LMNAVaHSKYzwUOSGgNAK&bvm=bv.91665533,d.d24&psig=AFQjCNEW6J_qlJZ1A3iSkR98nQQOiIWxFw&ust=1430394016308646

24

road traffic deaths occur every year

Road traffic injuries: the FACTS

1.24 million

cause of death among

those aged 15-29 years #1


Diverse fleet


How can we help?

• Gap Analysis

• Virtual Risk Manager

• Telematics

• Communication / Training

material

• Benchmarking

• Country Profile

• Arrive Alive Game


VFRM Mexico


28

Safe Driving contributes to the well-being of our Employees and Contractors


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


Project cargo surveys Intercona sponsors preloading/ discharge surveys for equipment with value ~CHF 1 mio or oversized


Risk Anticipation maturity level

BCM

31

Maturity level

Imp

act

on N

estlé

Emergent

Emergent

Mature

GLPP

Motor

Marine

Wellness


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


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)


Key Messages

34 34

Insurance Has Never

Prevented A Loss

Risk Management

& Loss Prevention

Is Key

“Nestlé money” anyway!

It’s


Question ?


intercona re - nestlé’s captive - sirm · intercona re - nestlé’s captive the successful use...

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