HDInsights Edition 7 2022

NOVEMBER 2 0 2 2 | ED I T I ON 7

nsight

HDI Global Asia Paci f ic Newslet ter

Image: HDI Team Winter Forum with Broker Partners at Thredbo Ski Resort

CONTENTS

Page 2 - Foreword by Stefan Feldmann

Page 5 - HDI Singapore

Page 6 - Hello from Hong Kong

Page 9 - Insurance Innovation

Page 13 - Risk Engineering and Resilience

Page 17 - Setting pace in the Sharing Economy

Page 19 - Micromobility changing urban transport

Page 21 - HDI Th!nx makes battery reliability insurable

FOREWORD

Stefan Feldmann, Head of HDI Global Asia-Pacific, Managing Director HDI Global SE, Australia

Dear Business Partners,

It's been a busy start to the new financial year, and we're all thoroughly enjoying travelling as well as welcoming guests in Australia again. We’ve had quite a few highlights in the past few months which I would like to share with you in this newsletter.

On the 1st of September, our Sydney office welcomed our HDI Global CEO Dr. Edgar Puls and Executive Board Members Jens Wohlthat and David Hullin . For this occasion, all our staff gathered in Sydney for our very first Townhall in our new office. This was an entertaining and informative event with our CEO and Executive Board Members participating in an interactive dialogue and sharing their perspective on HDI Global's business as well as our regional opportunities here in Australia.

Image: Dr Edgar Puls, Mark Oatway, Sarah Lyons, Stefan Feldmann

HDI Sydney office, 20 Martin Place Moving offices was one of the big milestones of the last few months. Our Sydney team are now settled into our brand-new offices on level 19 and 20, at 20 Martin Place, Sydney, which we share with our fellow colleagues from HDI Global Specialty. The office has two levels with workspace for 100 staff and several meeting rooms. Even better there is also a beer tap, a pool as well as a ping pong table and many more exciting things for the teams to enjoy. It is a bright space, and always open for all our valued broker partners to stop by.

Image: David Hullin, Stefan Feldmann, Jens Wohlthat, Dr Edgar Puls

HDI client and broker partner events Following the Townhall, we hosted a client lunch where our board members had the opportunity to engage and better understand challenges as well as the opportunities that Asia-Pacific presents. In the evening, we celebrated our official HDI Office Opening at 20 Martin Place, Sydney with our broker partners in a delightful celebration, catching up again in person after two years of virtual meetings.

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HDI Winter Forum

HDI activity across Australia While there has been much activity in Sydney, our interstate offices are also out and about. In Victoria, HDI Melbourne welcomed guests to a Winter Warmer social evening at The Duke of Wellington, Melbourne's oldest licensed pub with a fabulous rooftop bar. Our Queensland team caught up with key broker partners for a special work out session to get everyone moving through the colder months and unseasonable rain.

Another recent success was the launch of our inaugural HDI Winter Forum. At HDI, we always strive to organise different and unique events so fusing snow sports with blue skies, a colourful 1970s/80s inspired cellar door drinks party at Thredbo ski resort was a hit combination for our guest brokers. New and old bonds were strengthened and our brokers even named it ‘The event of the year’. So most definitely one to repeat. We are looking forward to welcoming guests in 2023.

Image: HDI Team and broker partners in an F45 resilience work out

Over in Western Australia, HDI Perth returned to in person events with a memorable Spice Masterclass in July. The colleagues in Perth also hosted a table as a series sponsor at the Success & Leadership Breakfast, a breakfast series that features leaders from Western Australian organisations. This time the event hosted guest speaker Kevin Brown, CEO at Perth Airport.

Image: HDI's Andrew Cochrane (left) with Broker Guests at Thredbo

Image: HDI Winter Forum 70's/80's Cellar Door Party

Image: HDI Team and Broker Guests at Business News Breakfast

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HDI Team Development I also have some great news for you in terms of team development. Our very own Elizabeth Williams was named one of the Elite Women 2022 by the Insurance Business Magazine . Elizabeth Williams serves as head of people and culture at HDI Global SE in Australia, managing over 100 employees across five locations in the country and providing support to our Asia Pacific offices in Singapore and Hong Kong. She has been with HDI for almost 20 years, and has been key to creating a forward-thinking, solution-oriented culture and leadership globally. Read more about Liz here.

The Perth HDI Office also had the opportunity to welcome visitors from the east side of Australia again. Willem van Wyk, Haris Michaels and I flew in from Sydney, while Alex Fox-Slater, Jamie Ashby and Justin Klietz joined from Melbourne as we commemorated HDI’s partnership with Lockton, the world's largest independent insurance brokerage. It was a night filled with good food, great company and live music. Masterchef Australia contestant Jenny Lam not only catered the event with delicious Vietnamese food, but also shared her journey from appearing on Masterchef to opening two restaurants. Award-winning singer Ezereve also graced our event with acoustic renditions of pop songs, adding to the overall relaxed vibe of the night.

Two more highlights were that our Marine team were able to meet up with colleagues in Singapore for the HDI Asia Pacific Marine Conference .

Image: David Gibbs and Stefan Feldmann

Image: MasterChef's Jenny Lam with Chelsea Co, HDI

Image: HDI Marine team with international colleagues in Singapore

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Ira Bronk from our Liability team also attended a Cyber training session at our HDI head office this quarter returning with new expertise in this rapidly evolving and complex area. HDI Education and this Edition Although we are delighted to meet again in-person, our Lunch and Learn series continues to provide our broker community with valuable insights from our expert team. If you missed these important sessions, you can read about the highlights in this issue. In August our panel discussed Insurance Innovation . This was an especially timely topic as several mega trends evolved during the pandemic, namely remote work, artificial intelligence, cyber assets and a shared economy. The insurance industry needs to adapt to these trends with new products and services. Learn more on page 9. In September, the panel focused on Risk Engineering and Resilience . For clients to get the best out of their insurance programs, they need to include risk engineering. Risk consulting services support successes meaning revenue growth, reputation and market share. HDI Global does that by sharing industry specific loss experiences and practical loss prevention advice. Our aim is to build long-term resilience rather than just current compliance as our team explained during the session. Learn more on page 13. Plus, please register for our upcoming Lunch and Learn session, now named our 'HDInsight LIVE' series, on Valuations and Asset Value Declarations on Wednesday, 16th November . With special Guest - Tim Markey, General Manager ANZ, John Foord - our HDI expert panel will explore the challenges of our current economic conditions where inflation and supply chain impact on insurance and how valuations are an important way brokers can support their clients in this rapidly changing market. This virtual education series is free to attend and you can register for the upcoming Valuations session here .

In this issue we also look at how HDI is setting the pace for shared economy insurance . Bennett Richardson of Insurance Business Australia asked HDI’s Alex Tarantino - HDI's Regional Liability and Cyber Underwriting Manager Australasia and ASEAN - how insurance fits into the fast-changing business of the sharing economy. Learn more on page 17. In another article our HDI Global insights team explore how micromobility may change urban transport forever. Learn more on page 19 And in our final topic we explore how HDI Th!nx and ACCURE analysis data make battery reliability insurable . Learn more on page 21 I hope this newsletter issue will give you some new insights and deliver information as well as inspiration. We look forward to catching up with you our valued partners at our upcoming HDI and other industry events.

Please do reach out to myself and my colleagues with any questions or suggestions you might have.

Kind regards,

Stefan Feldmann Head of HDI Global Asia-Pacific Managing Director HDI Global SE, Australia

HDI SINGAPORE

HDI Global SE, Singapore

Hello,

This quarter we are pleased to celebrate the 10th anniversary of HDI Global in Singapore. We are excited to celebrate together this milestone in Singapore and look forward to the future together.

Great Place to Work accreditation

We had a wonderful party celebration on 30th August with over 150 Broking partners. The day was made even more special as it coincided with a visit from our HDI Global CEO Dr Edgar Puls, and Executive Board Members Mr Jens Wohlthat and Mr David Hullin who also were in attendance. At HDI Singapore, we believe that together, we have greater strength and more opportunities; to achieve what we strive for – Pioneering value driven insurance solutions globally.

HDI Global SE in Singapore is very proud to have been awarded Great Place to Work accreditation. The survey was conducted by Great Place To Work® Singapore and the results showed that 83% of our employees said that when they join the company, they are made to feel welcome and valued by the company. We have an open expression policy that encourages our employees to share their ideas on how to change the company to make it a better place to work. In August 2022, HDI Singapore hosted the HDI Asia Pacific Marine Conference, bringing colleagues from around the world together to develop product offerings and networking with local broker partners. HDI Team building On 20 September 2022, the Singapore Risk Engineering team had a team bonding session with the Property and Energy Underwriters over a game of Pool Ball. It was an excellent opportunity to strengthen connections and share insights within our team. HDI Asia Pacific Marine Conference

Image: David Hullin, Graham Silton and Jens Wohlthat

We look forward to future success working with our HDI team and valued partners.

Graham Silton Managing Director HDI Global SE, Singapore

Image: HDI staff and guests toast the 10th Anniversary success

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HELLO FROM HONG KONG

HDI Global SE, Hong Kong

Hello,

As restrictions are slowly easing, we are enjoying connecting with our clients and business partners. This Quarter I even had the chance to celebrate with our colleagues in the Singapore office as they welcomed their 10th Anniversary. In August the Hong Kong branch came together for a candle making workshop with our team members, to revisit our goals, and to help us to be shine and bring out the best in everybody around. Candles hold great significance in various facets of human life, they dispel darkness by ushering in illumination. In September HDI Hong Kong colleagues gathered to celebrate the Mid-Autumn Festival with traditional festival food. The Mid-Autumn Festival is one of the four most important holidays in the Chinese culture, among other Asian cultures. It dates back over 3,000 years ago, where the festival is meant for friends, family and colleagues to come together, for harmonious union, celebrate for the harvest and to pray good health to each other. We are always encouraged by each other and working with our valued partners. Looking forward to meeting you in person in Hong Kong soon.

Image: HDI Global Hong Kong team candle making workshop

Image: HDI Global Hong Kong team candle making workshop

Daniel Lau Managing Director HDI Global Hong Kong

Image: HDI Global Hong Kong team enjoy the Mid-Autumn Festival

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Learn with HDInsight LIVE

Insurance Innovation Responding to mega trends reshaping business

With dynamic mega trends evolving during the pandemic – remote work, artificial intelligence, cyber assets and a shared economy for example – the insurance industry needs to adapt and innovate. HDI Global team explore “Insurance Innovation” in a Lunch-and-Learn education webinar.

Alex Tarantino Regional Liability & Cyber Underwriting Mgr HDI Global SE, Australia

Mark Mackay Head of Energy, Eastern Region HDI Global SE, Singapore

Martha Hasan Liability Underwriter & Business Analyst HDI Global SE, Australia

Willem van Wyk Regional Market Manager APAC HDI Global SE, Australia

Mega trends reshaping the supply chain Ongoing interruptions in the supply chain - due to the pandemic, geopolitical crisis and climate events and evolving technologies - have shown that it may be time to re-evaluate producing the cheapest unit overseas. Companies are having to find alternative supply chains, and in some cases, bring industries back and manufacture locally again. “I think it's brought home the balance of low-cost production versus security of supply chain,” said Mark Mackay, Head of Energy, Eastern Region. It’s a global concern, but one that is seeing both a commercial and country based regulatory responses. Notably, the US Senate passed a $280 billion industrial policy bill in July this year to build up America’s manufacturing and technological edge. A move, that was clearly aimed to counter China. Global market forces – high inflation impacting energy and food prices – influence insurance and the market has seen premiums increasing over the past few years in line with the economic conditions. Locally, Climate change has had a significant impact in Australia where bushfires, hail and floods generate significant insurance claims. This results in insurances having to weigh risks, and in some cases, choose if some of these risks cannot be insured in the future. The uncertainty arising from the current geopolitical risks and the pandemic could mean the high costs of energy, supplies, food and services stay for several years. “It is a question whether or not it's twelve to twenty-four months, or if it's going to be longer term, say three to five years and no one really knows the answer to that,” said Liability Underwriter and Business Analyst Martha Hasan.

Rising costs mean insurances have to be “responsive to the challenges that they're facing in terms of prediction,” Mr Mackay said. “For us it is always a challenge on business interruption, because this means looking into the future, maybe one, two or three years along with clients who when they want to do projects, typically have to plan five to seven years in advance to determine whether the project will be profitable or viable,” he said. “This is where we're working with our clients at the moment, firstly to learn these challenges a bit better, and then to be prepared that we have to adapt and to look at insurances in a different way.” Evolving technologies is another mega trend reshaping the way we do business such as the sharing economy with companies growing from tiny start-ups to billion-dollar corporations and household names like Uber and AirBnB for example. “With COVID-19, it really just kickstarted the whole sector into hypergrowth with many people during lockdown, by circumstance or choice, wanting to work on their own terms,” said Ms Hasan. This helped sites like Airtasker and other delivery services take off. What impact do these new trends and developments have on insurance? Some of these new developments, in particular inflation, impact the bottom line of claims. “I think it's really critical that in this current market cycle, as we look beyond 2022, insurance brokers try to maintain market discipline because of the ultimate impacts on our clients,” said Alex Tarantino, Regional Underwriting Manager Liability.

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“ We want to try and reduce the volatility of this huge swing in premiums and rates longer term. You get better outcomes if you can provide consistency .” Apart from market discipline, insurers also need to step up innovation and have products readily available . In a recent article in Insurance Business [see Page X], Mr Tarantino explained that in the sharing economy the customer journey has evolved from what used to be a relationship with a product to a relationship with its use. This has big implications for insurance because the owner of the shared asset won’t necessarily think about taking out the appropriate insurance themselves. “Appropriate insurance products are required to already be at the right place and time - integrated and embedded into the platform customer service,” he said. The primary vehicle for doing this is third-party insurance. Meeting demand for embedded insurance Third-party insurance is a fast-growing area for HDI that has accelerated with over 80 submissions globally since the start of July 2021. The growth in the MicroMobility sharing economy has been enormous according to Mr Tarantino; “As just one example of the sector, I think in 2019 there were only about 700,000 users of E-scooters and by 2024, you're looking at about 4.6 to 5 million users.” This rapidly expanding market needs third-party liability that covers riders of E-Scooters for bodily injury and property damage during the use of the vehicle. Demand for electric bikes is also rising rapidly with estimates predicting that about 130 million electronic bikes will be sold around the world over the next two years. This will – according to Mr Tarantino – call for more innovative embedded insurance solutions. “ Embedded insurance should not be underestimated . The market value by 2030 is estimated to be about $720 billion ." “With 4 billion people connected to the Internet worldwide, we will see more and more peer-to-peer platforms. It's a big market, but also a massive opportunity for insurers and brokers to come up with solutions that help these clients,” says Mr Tarantino. Other examples in the sharing economy market include platforms like Camplify or AirBnB, where the typical set up involves a group policy scheme, with the business platform owner as the policy holder. This allows the users of the platform service coverage under the policy as a beneficiary, according to Mr Tarantino.

Third Party Embedded Insurance “Embedded insurance should not be underestimated,” said Mr Tarantino. "The market value by 2030 is estimated to be about $720 billion. “With 4 billion people connected to the Internet worldwide, we will see more and more peer-to-peer platforms. It's a big market, but also a massive opportunity for insurers and brokers to come up with solutions that help these clients.”

Alex Tarantino Regional Underwriting Manager

Liability and Cyber APAC HDI Global SE, Australia

Big data and the future of insurance claims Mr Tarantino also mentioned the new area of digital assets that are being secured online, for example cryptocurrencies . These also need insurance solutions that protect the user from financial loss if the product fails or if malware harms it for example. Under cyber, however, there isn't property damage per se, as he explains. “Instead, it's more of a financial loss type coverage, so there is no traditional third-party property cover.” Currently, the insurance sector tends to only react around case law on these topics.

Another interesting new field is autonomous vehicles which may make driving safer in the long term, therefore reducing bodily injury. This could then support stability for pricing insurance products. New technology like radar GPS and satellite data, geocoding or geomapping for example can also support the insurance sector. They help businesses monitor how users are performing – for example if they have been speeding before an accident. “So, when a claim comes in, they're able to look at the story versus the collected data and this again enables us to see if the client or the user has been negligent,” Mr Tarantino said. intangibles. This could also include topics like mental injury, mental distress or mental anguish, which are harder to quantify than the typical bodily injury loss for example, she explains. How can brokers make sure clients are not underinsured? To not be underinsured in this current environment, clients, particularly large multinational companies who have a substantial asset base with over 100 locations, need more frequent third-party valuations . “This is becoming more of a requirement from the insurance market,” Mr Mackay explained. “As a result, these companies will roll out the valuation for each location every three years.” He also recommends more discipline using inflation tables naming India as a positive example where it's a regulatory requirement to use industry standard inflation tables to update values. In Mr Mackay’s view however, the biggest challenge are business interruption values . “With the volatility we're seeing in the oil price currently, we're now doing quarterly business interruption updates with some clients,” he said. “There's definitely an increased appetite for longer term service contracts with suppliers to try and mitigate some of the volatility.” There's no silver bullet says Mr Mackay; “I think this just comes down to regular interaction with clients, but also sitting down and understanding the situation that they're in before pulling an insurance policy together.” Martha Hasan believes that over time artificial intelligence (AI) and big data can help cover

The Future of Insurance Responsive products and personal relationships “I think, we have to look at each individual client and the data that we have. We then have to build a product that works for that specific client. "Another important aspect is relationships and interaction. We've seen this throughout the pandemic: The insurers that have been successful are the insurers that stayed close to the brokers and clients.”

Willem van Wyk Regional Market Manager, Australasia and ASEAN HDI Global SE, Australia

Does the insurance market adapt fast enough to cover new types of risk? Mark Mackay believes yes. “I think the insurance market does step up,” he said. Naming as an example the new trend towards renewables to counteract climate change. “ HDI Global supports the transition from fossil fuels to renewables and new technologies that are part of the ESG initiative , the climate change initiative,” he said emphasizing that particularly in the liability space, insurances have to make sure that the clients that they underwrite have good green credentials.

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“Helping clients in that transition is what we're trying to support at HDI,” says Mr Mackay. Apart from expert risk and engineering advice, this could be incentives like credits, premiums or discounts for example. “ If a company has good ESG credentials, they usually have good management as well. And good management often leads to better insurance results and premiums, ” said Willem van Wyk, Regional Market Manager ASEAN and Australasia. “In general, we could do a bit more lateral thinking, outside of insurance. The banking sector, super investments and tech companies have made big milestones on AI, how to manipulate big data on modellings and simulations – things, we don't generally tap into,” says Ms Hasan. “I think there's a lot of potential from other industries that we can use and adapt within insurance. We don't have to start from scratch.” Please contact our HDI Team with questions A goal for the future

Learn with HDI Watch a recording of the lunch and learn session by clicking the link below. Please reach out to the HDI team with any questions.

Watch here: Lunch & Learn: Insurance Innovation

Contact - HDI

Alex Tarantino Regional Underwriting Manager Liability & Cyber Australasia M: +61 (0)406 173 524 Alex.Tarantino@HDI.Global

Mark Mackay Head of Energy, Eastern Region M: +65 9652 8337 Mark.Mackay@HDI.Global

Willem van Wyk Regional Market Manager, Australasia & ASEAN M: 0437 387 035 Willem.vanWyk@HDI.Global

Martha Hasan Liability Underwriter & Business Analyst M: +61 (0)410 606 398 Martha.Hasan@HDI.Global

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Risk Engineering: Building beyond compliance to long-term resilience

Risk engineering helps clients make the most of their insurance programs. HDI Risk Consulting (HRC) supports clients success in revenue growth, reputation and market share by sharing industry specific loss experiences and practical loss prevention advice. A recent Risk Engineering and Resilience Lunch and Learn Session showcased HDI’s strengths in this area.

Peter Ratering Assistant Property Underwriter HDI Global SE, Australia

Philipp Glanz Risk Engineering Manager APAC HDI Global SE, Australia

Stephanie MacIntyre Property Underwriter HDI Global SE, Australia

Anna Khomeini Market Manager HDI Global SE, Australia

What is risk engineering? Risk engineering is a strategy that aims to manage risks and reduce potential damage to businesses. As companies usually have very different risk profiles, the risk engineers conduct site specific risk assessments to fully understand the risk profile and discuss risk mitigation strategies. During these visits, in addition to identifying risks and insights into prevention, risk engineers also gain valuable data that supports underwriters when recommending the right insurance policies for clients. Recent developments including climate change, inflation, an increasingly volatile geopolitical situation, new technologies as well as cyber threats add additional complexity to the topic. A comprehensive risk management strategy can help clients save time and money. Industry shows 'genuine interest' “During our risk surveys, we understand that clients want to have feedback from a non-government and non-regulatory organization like us,” said Philipp Glanz, HDI Global’s Risk Engineering Manager for the Asia Pacific region and the Middle East, during a recent HDI Lunch and Learn Session on Risk Engineering and Resilience. “We see that there is a genuine interest in practical risk management advise including best practice risk engineering and loss prevention support.” In this regard it is essential to look at the difference between safety and compliance. “ We need to talk about the long-term resilience rather than just the current compliance ,” Mr Glanz explained.

As an example, he named the Australian Sprinkler Standard, which has had different versions over the years. “The current version, the 2017 version, is an internationally accepted standard and it's a really high quality whilst the 1999 version had some significant deficiencies compared to internationally accepted standards,” he said. “The problem at the time was that building codes in Australia still referred to the old standard, even though the new standard was published and readily available.” This created issues for many clients who thought it would be enough to be compliant today without thinking if that still meant they would be compliant in the future or of the assets real resilience over time. A price too high The fire that devastated Grenfell Tower in June 2017 was one of the worst modern disasters in the UK according to the BBC. 72 people died in the 23-storey tower block in North Kensington, West London, on the night of the fire. In one of the reports to the public inquiry, an expert said that evidence "strongly supports" the theory that the polyethylene material in the cladding was the primary cause of the fire's spread.

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Mr Glanz outlined a few recent large fire losses from around the world where the building materials used were compliant with local regulations. A major contributing factor was that there was no focus on the long-term resilience, only current compliance according to Mr Glanz. Therefore, it is important to ask certain questions according to the expert:

Mr Glanz named the black start procedure for chemical plants as an example. “We had a couple of quite large losses there recently,” he said. “So, we used that as a chance to talk to our clients about their black start procedures to see if there are any gaps in their current procedures and how they can close any identified these gaps.”

1. How strong is your loss prevention program?

A black start is the process of restoring an electric power station or a part of an electric grid to operation without relying on the external electric power transmission network to recover from a total or partial shutdown.

2. Can you prove the effectiveness of implemented risk mitigation measures?

3. Is your loss prevention program future proof?

Risk Consulting can also assist with change management: During Covid many companies started to store hand sanitizers in their production and warehouse facilities. Hand sanitizers are typically highly flammable products. So, if the fire protection concept is not designed to handle and store flammable liquids, companies need to be aware that the introduction of flammable products is a major hazard and must be managed appropriately. During the risk assessment process HRC identifies such weaknesses in the protection concept and develops adequate risk mitigation strategies together with the clients. Developing a Risk Management Strategy An essential part of a risk management strategy is to build up a business contingency management strategy. “We talk about common threats but also low likelihood, high consequence events. For example we discussed what happens if chemical companies reach a minimum staffing requirement, for example during the flu season when many employees might fall sick at the same time, even long time before CoVID” Mr Glanz said. “You really want to have these discussions beforehand and build up your long-term resilience against any potential threats that might appear.” Overall, HDI wants to increase risk awareness amongst clients by providing training so that they can build up their own resilience. HDI has a global network, a team of approximately 180 engineers, that deliver loss experiences from around the world almost in real time. If there is a large loss somewhere around the world, HDI engineers share that with their clients immediately.

‘ Presenting risks to market Another important aspect for clients is to find the best way to present their risks to the market. This is done with a risk report says Mr Glanz, which is the result of a risk survey and not just a questionnaire as these are too one-sided. Such a report helps clients to market their risks to the insurance companies, but also to manage potential risks. However, not all risk reports are made equal, cautions Stephanie MacIntyre, HDI Global Property Underwriter, based in the Melbourne office. “Often the really cost-effective reports might not always have the level of detail that we need to be able to accurately assess the risk properly,” explains Ms MacIntyre.

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When done well however, risk reports can guide underwriters with recommendations from risk engineers. “Underwriters may find it prudent to endorse the policy with clearly defined maintenance and servicing requirements to protect the insured's assets,” says Peter Ratering, Assistant Property Underwriter. “This would be not unlike common policy terms requiring regular cleaning of extraction vents to prevent grease fires in commercial kitchens,” said Mr Ratering. When investing in a meaningful risk report, an important add on is a Risk Improvement Management System. HDI has developed an account management system, GREEN 4.0, for the clients, which helps to manage the risk profile and risk improvement measures very easily, effectively and in real time. The purpose of this system is to enhance the relationship between clients, brokers and insurers. New HDI Green 4.0 application improves corporate resilience through interactive risk transparency. https://www.hdi.global/en us/infocenter/insights/2022/new-green-application/

In addition to e-mobility, many new risks will arise from evolving technologies such as hydrogen fueled vehicles and flying taxis for example. Among many considerations, HRC will be looking at individual fire and theft prevention measures. As fire risk increases with more electric or hydrogen fueled vehicles on the road, this can be a very important topic to discuss for certain concepts like underground parking for example. Complex risks “Underwriters should seek to involve risk engineers on complex risks, not just to provide insight on any endorsements or sub limits to apply to a policy, but also to provide an opportunity to collaborate with clients and mitigate any risk exposed by these new technologies. It's important to note that some risks while becoming more common do not suit a one size-fits-all-approach. We've seen this in particular with businesses incorporating more hydrogen paired technologies.”

Peter Ratering Assistant Property Underwriter HDI Global SE, Australia

Future-proofing Risk Management Strategies Future-proof risk management strategies also need to include supply chain risk . One HDI client has reported that transformers used to have a lead time before the pandemic of 6 to 12 weeks, whereas now this has increased to 52 to 86 weeks. “That's a significant change and something like that has to be implemented in a company’s business continuity plan (BCP),” Mr Glanz said. Another example is the current shortage of timber in Australia that will probably extend into 2023 and affects the entire construction industry.

Setting an Example with Motor Fleet Insurance Whilst short-term means being compliant today, long term means setting clients up for the future. HDI Global aims to set an example of such a “client-and situation-focus-risk-management” with a new product – Motor Fleet Insurance – which will be launched at the beginning of next year. For this new offer HDI risk engineers will carefully look at safety and risk assessments of motor fleets. HDI is also keen to support the transformation to fully electric and autonomous driving.

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Climate Change – Changing Environments

Current challenge: rising inflation “Property underwriters need to monitor the current inflation rate quite closely given that the premium is generated off of declared asset values or replacement costs. As the cost of construction materials and labour is significantly higher today, it is important that these increases are reflected in the values that clients are declaring. This is something to be mindful of during the renewal process with your clients.”

The CSIRO released their Mega Trends Report earlier this year, projecting extreme weather events will cost Australia $39 billion annually by the year 2050 with increased loss payments. As a consequence, premiums will rise. However, considerate risk management can help to limit exposure and therefore premium increases. Andrew Hall, CEO of the Insurance Council Australia, has highlighted it may be prudent for example to raise buildings on stumps in low lying areas, reinforce roofs in cyclone affected areas, and potentially relocate individuals and businesses in the event of a total loss in areas where they can't be adequately protected.

Stephanie MacIntyre, Property Underwriter HDI Global SE, Australia

Please contact our HDI Team with questions Watch here: Lunch & Learn: Risk Engineering & Resilience

Insurers also need to prepare for evolving risks from climate change . “I think we really have to accept and prepare for more extreme and more frequent weather events,” Mr Glanz said. “Climate change also means we will have a change in ambient conditions which will affect the operational capabilities of technical systems. This needs to flow back into the design and operation strategy, but also maintenance and inspection programs.” HDI has approximately 180 risk engineers globally and within this is a team that focuses on climate change and develops specific reports and loss prevention strategies to support brokers and clients into the future.

Download Presentation Slides here: Lunch & Learn: Risk Engineering & Resilience

Contact - HDI

Peter Ratering Assistant Property Underwriter HDI Global SE, Australia

Philipp Glanz Risk Engineering Manager Asia-Pacific M: +61 (0)498 016 552 Philipp.Glanz@HDI.Global

Stephanie MacIntyre Property Underwriter M: +61 (0)417 671 391 Stephanie.MacIntyre@HDI.Global

Anna Khomeini Market Manager M: +61 (0)450 080 244 Anna.Khomeini@HDI.Global

Peter Ratering Assistant Property Underwriter M: +61 (0)434 865 980 Peter.Ratering@HDI.Global

HDInsight Edition 7 - page 16

HDI setting pace for shared economy insurance This article was produced in partnership with HDI Global SE, Australia Bennett Richardson of Insurance Business Australia asked Alex Tarantino, at HDI Global about how insurance fits into the fast-changing business of the sharing economy.

First published in InsuranceBusinessMag.com/au on 09 August 2022

Peer to peer services Peer-to-peer services and the sharing economy seem to throw up a new disruptor firm every other week that promises to revolutionize the way we work, eat, travel, spend, communicate or (insert random verb here). The way the sharing economy works raises fundamental questions that many in the insurance world have not grappled with before. That might be true in some cases, but somebody forgot to tell HDI Global. Alex Tarantino, HDI regional underwriting manager for liability and cyber, says that in the sharing economy the customer journey has evolved from what used to be relationship with a product to a relationship with its use. This has big implications for insurance because the owner of the shared asset won’t think about taking out the appropriate insurance themselves. But HDI is working to cover the corporate liability of the new economy and technology entities, says Tarantino. “Appropriate insurance products are required to be at the right place and time by already being integrated and embedded into the platform customer service,” he says.

It’s a fast-growing area for HDI that has accelerated suddenly with over 80 submissions globally since the start of July 2021 to now. And not from minor players either. “These are big global sharing economy providers. At the same time, there are also some requests of start-ups who are looking for the right insurance partner who understands their needs and supporting them to grow together” says Tarantino. Growth in some areas such as micro-mobility is on a rip. Last year, shared e-scooter giant Lime raised $523m in funding. At the beginning of this year, the European micro-mobility platform Bolt raised €628m lifting the company's valuation to a total of €7.4bn. The number of e-scooters used in sharing services globally is expected to have increased nearly sixfold to 4.6 million in 2024 from 2019 levels, according to market research company Berg Insight.

The primary vehicle for doing this is third party insurance.

“Then we've got the modular, covered options – so that’s liability for damage in the insurance, care, custody and control,” he says. “There's also things like cyber, there's data protection, and sometimes sort of bolt on products as well [for] crisis management or loss of turnover.”

HDInsight Edition 7 - page 17

‘Companies like these have third-party liability cover for riders that includes bodily injury and property damage during use of vehicle, as well personal accident. Another area is the shared use of private assets such as campervans, or holiday homes on platforms like Camplify or AirBnB. The typical set up for this version of the shared economy involves a group policy scheme, with the business platform owner as the policy holder. This allows the users of the platform service coverage under the policy as a beneficiary, says Tarantino. Other types of Insurance for technology driven companies include contractual liability coverage for financial reimbursement resulting from non performance or mal-performance of a promised service. For example the secure storage, custody and transfer of digital assets including cryptocurrency. One of the problems in dealing with insurance in the sharing economy is how to accurately assess risk given the lack of historical data for many of these new businesses. While HDI uses algorithms to help assess risk, an important part of the equation is allowing access to the usage data with additional premiums charged based on use. “We ask for usage volume, the product type, quality control and maintenance, the geography, location, control of that usage, any previous losses and lessons learned.” In addition, any data from global markets are applied locally. A lot of the companies and services began in Europe or the US before they moved into Australia. “When brokers approach us with sharing economy opportunities here, we are able to tap into that expertise,” says Tarantino. In the rapidly evolving post-pandemic economy, brokers are looking for opportunities in the shared economy space to evolve and move with the times. Brokers can help new economy platforms accelerate successfully by enhancing their value proposition and managing the shifting risk landscape. “The pricing structure is based on a per usage, or transaction basis.”

The new economy is here to stay but to help it grow, robust insurance is needed to enable trust and reduce financial exposure for users, says Tarantino. In the early stages of growth, success or failure of a business can often ride on public perception of a service or product and limiting risk plays a key role in ensuring that unfortunate incidents don’t trip up what would otherwise be a viable idea. “Having an insurance solution is really, really critical to protect them and their business for the future,” says Tarantino.

Please contact our HDI Team with questions

Contact - HDI

Alex Tarantino Regional Underwriting Manager Liability & Cyber Australasia M: +61 (0)406 173 524 Alex.Tarantino@HDI.Global

Andrew Cochrane Underwriting Manager, Liability Northern Region M: +61 (0)0456 568 456 Andrew.Cochrane@HDI.Global

Matthew Wuiske Underwriting Manager, Liability Southern Region M: +61 (0) 498 001 258 Matthew.Wuiske@HDI.Global

Tami Sorensen Liability Underwriting Manager, Western Region M: +61 (0)411 011 622 Tami.Sorenson@HDI.Global

Ashley Barrett Liability Underwriting Manager, Queensland M: +61 (0)410 026 659 Ashley.Barrett@HDI.Global

HDInsight Edition 7 - page 18

Micromobility may change urban transport forever Getting from point A to B over short distances with micro and light vehicles has become one of the keys to sustainable urban transport. However, micromobility sharing platforms have had their fair share of issues: from safety concerns and insurance challenges to public nuisance caused by illegally parked bikes and scooters blocking sidewalks. In this article the HDI Global team explore evolving insurance considerations for micromobility.

First Published HDI Global Infocentre on 23 June 2022

Most trips in cars are short (and often made solo) Getting around on electric scooters or bikes over short distances can be an important pillar of sustainable mobility. These modes of transport include both electric and non-motorised vehicles. As a result, this trend enhances the overall quality of urban life by making short-distance transportation more comfortable, available, and efficient. According to McKinsey, "Trips of less than 8 km (5 miles) account for as much as 50 to 60 per cent of today's total passenger miles travelled in China, the European Union, and the United States." With the bulk of urban trips being so short and a lot of them being made by just one person, micromobility offers a great alternative to cars. In the United States, for example, the average adult weighs 82 kg and the average vehicle weighs 23 times as much. According to the EPAs Automotive Trends Report, the average vehicle weight "has increased slowly over the last several years and is currently at the highest point on record, at 4,156 pounds (Note: approx. 1.86 metric tons)." According to data compiled by Valence Strategic, which was published in Wired Magazine, "One kilowatt hour of energy can only get a gasoline powered car to travel 0.8 miles (1.3 km)." Electric vehicles are far more efficient than gasoline powered cars, being able to travel 6.6 km with one kwh of energy. Using an electric scooter, however, one could travel more than 130 km. With most of a car’s energy being used to move the vehicle itself, micromobility has the potential to provide transportation at a much lower economic and environmental cost. For many cities struggling with the consequences of rapid urbanisation, micromobility can be part of a solution to crippling congestion and the resulting noise and smog.

Small electric scooters and bikes aren't meant to take the place of cars or public transportation entirely. However, they have the potential to serve as a first mile/last-mile alternative to public transportation, as well as a means of connecting neighbourhoods. Small, lightweight electric vehicles are booming In addition to private e-bike sales, micromobility sharing platforms have burst onto the scene in recent years, and various companies have reached unicorn status by attracting huge investment. ‘Last year, shared electric micromobility giant Lime raised $523 million in funding. At the beginning of this year, the European micromobility platform Bolt raised €628 million, lifting the company's valuation to a total of €7.4 billion.

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S Naturally, insurance plays a key role in the success of micromobility concepts worldwide. Since most operators are growing fast and expanding into new regions rapidly, they are dependent on a partner who understands the various challenges they face and is able to support them adequately. Insurance products should therefore be easily scalable to function across different countries and jurisdictions. Insurance solutions that are seamlessly integrated into a micromobility service also enable operators to set themselves apart from their competitors. From the operators’ perspective, it is essential that the solution instils trust in their services and protects their customers, but at the same time it has to be scalable and simple.

Accordingly, the number of scooters used in sharing services is expected to increase from 774,000 in 2019 to 4.6 million in 2024, according to market research company Berg Insight. Between 2020 and 2023, Deloitte expects that there will be 130 million e-bikes sold around the world, noting "the number of e-bikes on the roads will easily outpace other e-vehicles by the end of next year”. Asia, the United States and Europe have all been at the forefront of the micromobility trend. China, however, is the largest scooter and bike manufacturer in the world today. In Taiwan, the micromobility company Gogoro is implementing an integrated system of self-developed e-vehicles, sharing platforms, and a battery sharing network – all in one cohesive technology ecosystem. Smartphones, proximity cards, and a cloud-based system make Gogoro's scooters a prime example of a smart city concept. The scooters give users live information about their trip and let riders unlock the scooter with an app, as well as with biometric technology that smartphones can use. Removable batteries and self-service vending machines have been at the heart of the Gogoro concept since the very beginning. These vending machines allow a battery to be replaced with a fully charged one in a split second. However, micromobility is not a novel idea in Europe either. On top of already high ownership rates, European municipalities were among the first to provide shared bicycles as a public service. In Denmark, for instance, 90 per cent of all citizens own a bicycle, but only 56 per cent possess a car. Safety is still a major concern Most major micromobility operators work with cities and insurers to address these issues. For example, they introduce electronic geo-zones to prevent riders from either riding in an unsafe area or parking in an area where the city doesn't want them to park – this can also help in preventing people from riding on sidewalks. Most companies also require users to be 18 or older. In some cases, a valid driver's licence is required to open an account. till, the regulations for micromobility service providers differ from country to country and even sometimes within a country from city to city. Operators not only have to align their business activity operations with complex regulations, but they also need to manage their risks accordingly

Insurance vital to building trust “Ultimately, the solutions we build aid in instilling an element of trust, which is the foundation for these new business models. Our partners need to earn the trust of their customers. We assist them in this process. And by doing so, we enable them to bring their products to market."

Meryem Seyyar Head Digital Solutions HDI Global SE

Resolving urban congestion, reducing environmental damage and reaching climate goals are ultimately global issues. As the global trend of switching to micromobility options for short-distance travel is propelled even further, it will be imperative that all stakeholders work together to find solutions for the emerging conflicts. Insurers can play a key role, not just as risk-carriers, but as enablers of new business models.

Please contact our HDI Team with questions

HDInsight Edition 7 - page 20