CHINAS BELT AND ROAD INITIATIVE: IMPLICATIONS ON THE SELF-INSURANCE - PowerPoint PPT Presentation

PANEL DISCUSSION CHINA’S BELT AND ROAD INITIATIVE: IMPLICATIONS ON THE SELF-INSURANCE INDUSTRY IN ASIA LED BY KELVIN WU GROUP ASSISTANT GENERAL MANAGER, RISK MANAGEMENT & INSURANCE, INTERNATIONAL SOS TREASURER & MEMBER OF EXCO, PARIMA PANELISTS RAYMOND CHEUNG GENERAL MANAGER, INTERNATIONAL DEPARTMENT, JIANG TAI INSURANCE BROKERS, CHINA SHIWEI JIN GLOBAL PROGRAM AND CAPTIVE REGIONAL DIRECTOR ASIA, XL CATLIN EDWARD WU MANAGING DIRECTOR, CAPTIVE AND MUTUAL PRACTICE, WILLIS TOWERS WATSON, CHINA DR. YIMING SHEN SERVICES, SENIOR VICE PRESIDENT, HEAD, CHINA CLIENT MARSH SINGAPORE

PRESENTATION CHINA’S BELT AND ROAD INITIATIVE : IMPLICATIONS ON THE SELF-INSURANCE INDUSTRY IN ASIA BY SHIWEI JIN GLOBAL PROGRAM AND CAPTIVE REGIONAL DIRECTOR ASIA, XL CATLIN

China’s Belt and Road Initiative: Changing Risk Landscape Construction Property Energy Liability Marine Kidnap & Terrorism Environmental Political Risk, Accident & Ransom Credit & Bond Health

China’s Belt and Road Initiative: Local Knowledge Matters

THANK YOU SHIWEI JIN GLOBAL PROGRAM AND CAPTIVE REGIONAL DIRECTOR ASIA, XL CATLIN SHIWEI.JIN@XLCATLIN.COM DISCLAIMER: This presentation should not be regarded as offering a complete explanation of the matters referred to and is subject to changes in law. It is not intended to be a substitute for detailed research or the exercise of professional judgment. The organising committee of the Asian Captive Conference cannot accept any responsibility for loss occasional to any person acting or refraining from action as a result of any material in this presentation. The republication, reproduction or commercial use of any part of this presentation in any manner whatsoever, including electronically, without the prior written permission from Committee is strictly prohibited.

PRESENTATION CHINA’S BELT AND ROAD INITIATIVE: IMPLICATIONS ON THE SELF-INSURANCE INDUSTRY IN ASIA BY DR. YIMING SHEN SENIOR VICE PRESIDENT HEAD OF CHINA CLIENT SERVICES, MARSH SINGAPORE

China’s Belt and Road Initiative: Implications on the Self-Insurance Industry in Asia

Belt and Road Projects will face the same core risks as any other large Infrastructure Project • On time (delays = extra cost) COSTING • On budget • Who bears the cost? • Delivering a bankable project EXTERNAL FINANCE • Repayment of loan • What part can insurance play? • What loss or damage could occur during construction PHYSICAL • Will final asset be delivered as specified under Contract, free of defects • Who bears the cost? • Site Safety during construction SAFETY • Safe for end user during operation • Who is responsible? • Top of the Global Agenda ENVIRONMENTAL • “Not in my backyard” • Pressure group influence • Delivering a bankable project GEOPOLITICS • Repayment of loan • What part can insurance play?

Insurance can address many risks General Insurance • Marine Cargo • Property Damage • Business Interruption Third Party Liability • COSTING Workers ’ Compensation / • Employees’ Liability • Local insurances required by law EXTERNAL FINANCE Construction Insurance Construction “All Risks” Insurance • Delay in Start-Up • Construction Plant & Equipment • PHYSICAL Speciality Insurance • Employee Health & Benefits Professional Indemnity • SAFETY Environmental / Pollution Liability • Performance Bond • • Supply Chain • Cyber Insurance ENVIRONMENTAL • Kidnap and Ransom Liquidated Damages • Terrorism Insurance • GEOPOLITICS • Parametric/Weather • Political Risks • Credit Default

Placing captives at the core of a risk management program facilitates four key value drivers

Captive owners cite a number of reasons for maintaining a captive

Asia Pacific region shows consistent captive growth

Captives’ future challenges and opportunities: blockchain technology

Recommendation

THANK YOU DR. YIMING SHEN SENIOR VICE PRESIDENT HEAD OF CHINA CLIENT SERVICES, MARSH SINGAPORE YIMING.SHEN@MARSH.COM DISCLAIMER: This presentation should not be regarded as offering a complete explanation of the matters referred to and is subject to changes in law. It is not intended to be a substitute for detailed research or the exercise of professional judgment. The organising committee of the Asian Captive Conference cannot accept any responsibility for loss occasional to any person acting or refraining from action as a result of any material in this presentation. The republication, reproduction or commercial use of any part of this presentation in any manner whatsoever, including electronically, without the prior written permission from Committee is strictly prohibited.

PRESENTATION CHINA’S BELT AND ROAD INITIATIVE: IMPLICATIONS ON THE SELF-INSURANCE INDUSTRY IN ASIA BY EDWARD WU MANAGING DIRECTOR, CAPTIVE AND MUTUAL PRACTICE WILLIS TOWERS WATSON, CHINA

Top 7 Main Risks in BRI (statistics from a seminar) Political risk, personnel safety and enterprise operational risk are top three risk / challenge elements Legal & Regulatory Public Relationship Enterprise Ops risk Talent Shortage Personnel Safety Cultural Difference Political Risk Main Risks

Captive Solutions ART (Alternative Risk Transfer), e.g. Captive, is an important solution for overseas investment risks, especially for those that are hard to be covered by commercial insurers Overseas Project 1 Group Parent Fronting Program Overseas Project 2 Reinsurance Overseas Project 3 Markets CAPTIVE Direct Overseas Project 4  Transparency & Control Flexible Program Reduced TCOR Structure  Power of Pricing Consolidated Limits/ Consolidated RM Retentions

Captive Solutions in China Analysis by Source of Risk and Stratified by Risk Rank (Before Improvements) Strategic Legal / Regulatory Products / Services Quality Financial Reinsurance Human Capital Insurance Risk Information Technology Manageme Manageme Operational 0 1 2 3 4 5 6 GRS>=15 15>GRS>=10 10>GRS>=7 7>GRS>=3 GRS<3 nt Platform nt Tool CAPTIVE PD EB Liability … Insurable Risk Cost Control Center

Captive Solutions in China Some observations – contributions to BRI • Participate in overseas insurable business actively Strong Motivation • BRI business increase very fast Insurance Program • Positioning as insurance management tool • Integration integration by lines or regions for cost saving and risk management • Take advantage of group risk management/ engineering resources A RM Tool • Benchmark international best practice via reinsures/brokers etc. • Additional capacity provider Special Use • Innovation risk solutions • Efficient claim services Focus on Services • Information platform construction

Chinese Captives Have More Significant Role in “ Belt and Road Initiative” * Have better understanding of risks associated with overseas • investment Have better resources, e.g. risk management experts, to tackle risks • * http://china-trade-research.hktdc.com/business-news/article/The-Belt-and-Road-Initiative/The-Belt-and-Road-Initiative/obor/en/1/1X000000/1X0A36B7.htm

THANK YOU EDWARD WU MANAGING DIRECTOR, CAPTIVE AND MUTUAL PRACTICE WILLIS TOWERS WATSON, CHINA EDWARD.WU@WILLISTOWERSWATSON.COM DISCLAIMER: This presentation should not be regarded as offering a complete explanation of the matters referred to and is subject to changes in law. It is not intended to be a substitute for detailed research or the exercise of professional judgment. The organising committee of the Asian Captive Conference cannot accept any responsibility for loss occasional to any person acting or refraining from action as a result of any material in this presentation. The republication, reproduction or commercial use of any part of this presentation in any manner whatsoever, including electronically, without the prior written permission from Committee is strictly prohibited.