The 2 nd International Istanbul Insurance Conference Liability Underwriting & Claims in the MENA Market Claims in the MENA Market Lina Hantas ACE American Insurance Co Regional Casualty Manager - MENA

What is Liability? The state of being legally obliged to pay money to a Third Party. The state of being legally obliged OR responsible for an act due to negligence Gross liability (without the need to prove negligence)

Liability Products Casualty: covers any awards of damages given to a member of the public/third party because of an injury or damage to their property caused by the insured ’ s business activity or the insured ’ s product Public and Product Liability : covers any awards of damages given to a member of the public/third party because of an injury or damage to their property caused by the insured ’ s business activity or the insured ’ s product claims that are made against an employer by an employee for an injury or illness/disease arising out of and during their course of employment. Workmen Compensation limits are paid based on statutory law or the labour law. Employers Liability needs to prove negligence of the employer. Workmen Compensation/ Employers Liability : claims that are made against an employer by an employee for an injury or illness/disease arising out of and during their course of employment. Workmen Compensation limits are paid based on statutory law or the labour law. Employers Liability needs to prove negligence of the employer. is a request to return to the manufacturer a batch or an entire production run of a product, usually due to the discovery of safety issues. Product Recall : is a request to return to the manufacturer a batch or an entire production run of a product, usually due to the discovery of safety issues. Negligent acts and/or omissions by the individual and the organization resulting in damage to the environment Environmental Impairment Liability: Negligent acts and/or omissions by the individual and the organization resulting in damage to the environment

Liability Products Financial Lines : also called Professional Indemnity Insurance, protects professional practitioners such as Architects, Lawyers, physicians, against potential negligence claims made by their client Professional Liability: also called Professional Indemnity Insurance, protects professional practitioners such as Architects, Lawyers, physicians, against potential negligence claims made by their client : payable to the directors and officers of a company, to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization Directors ’ and Officers ’ Liability: payable to the directors and officers of a company, to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization Coverage for banks in the event of loss due to dishonest acts of its employees or individuals external to the bank Bankers Blanket Bonds: Coverage for banks in the event of loss due to dishonest acts of its employees or individuals external to the bank

Underwriting Factors Size of the business/ Turnover/ Revenues/ Financials Number of Locations Number of Employees/ Wages Business Occupancy Limit of Liability Geographical/ Territorial limits Jurisdiction/ Legal factors & environment Trigger: Claims made/ Occurrence Form Coverages (Primary/ Excess, DIC, DIL, etc.) Deductible

Liability Opportunities The Liability market in the MENA region is still relatively under penetrated when compared to other markets. This creates high potential for growth. Emerging Market with growing insurance awareness and still non litigious society. Foreign investors, Lenders ’ & Contractual requirements in Mega Infrastructure & Industrial projects and hence the request for high limits& wide Jurisdiction from rated companies. Limited Capacity, financial rating and underwriting expertise of the Local & National companies. Product exports to Europe, USA & Canada Regional companies with cross boundaries expanding within and beyond MENA

Liability Challenges Build, grow and maintain a profitable liability portfolio is a bigger challenge for insurers. The concept of exposure and liability being a long tail business is not well appreciated. Increased court awards (i.e. Compensation under EL for certain sectors) The best products and the best underwriting methodology for liability risks are no substitutes for adequate pricing Premiums should reflect claims trend that will escalate and the uncertainties of a changing legal environment

Liability Claims in MENA Liability Being a long- tail business (Asbestos Claims, Legionella Bacillus Claims) Undefined exposures Long claims process for Bodily Injury Limited Data Extensive statistical work Extensive Actuary work (Managed loss ratio, IBNR, Frequency/ Severity of claims)