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Closing the protection gap in the MENA region

Climate Check Podcast

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    About this episode

    Andreas Pollmann, client management executive and head of department for the Middle East and North Africa region, discusses the perils the region has to face and the steps being taken to mitigate the risks (Part 1), followed by a discussion on how Munich Re could help close the protection gap through partnerships in the region (Part 2).

    About the guest

    In 1996, Andreas Pollmann began his professional career at Arthur Andersen GmbH in Düsseldorf in the fields of audit, tax, and business consultancy, where he held various positions. In 2000, he moved to Munich to take up a senior position with a German subsidiary of Fuji Film, a Japanese company in the optical and photographic industry.

    In early 2002, Andreas moved to the Munich Re Group, Munich, where he started as International Organisation Coordinator for the Singapore branch. In February 2004, he moved to Munich Re's subsidiary in Johannesburg, South Africa. There he held various management positions until his return to Munich in February 2008, where he assumed a Client Management position. In April 2009, Andreas was appointed as a member of the senior executive management of Munich Re, Munich. He is responsible for the Munich Re Group's Non-Life Reinsurance business in all markets in the Middle East and North Africa. 

    Andreas Pollmann
    Andreas Pollmann
    Client Management Executive
    Middle East and North Africa

    Part 1

    Mark Maroon:

    Welcome to Climate Check, everyone. This is Mark Maroon, vice president and head of portfolio management and reinsurance for American Modern, a Munich Re company. Today I'm joined by Andreas Pollmann, Client Management Executive and head of department for Munich Re's clients in the region known as Mina, the Middle East and North Africa. Andreas, thank you so much for joining us today.

    Andreas Pollmann:

    Thank you very much, Mark, for having me. Pleasure being here.

    Mark Maroon:

    Absolutely. So maybe just to begin, can you give us a little bit of an overview of your role for Munich Re?

    Andreas Pollmann:

    My role, thank you, Mark, for asking, is, as you said in the introduction, is client management executive. So actually, I'm the person who owns the result responsibility for whatever Munich Re is doing in the Middle East, North Africa region for the normalized business. P & L responsibility, pretty much.

    Mark Maroon:

    Thank you so much for the overview. One of the things we wanted to talk about today was that, a lot of the conversation around climate resilience has to do with adapting to weather that is getting increasingly extreme, right? So when many of us think of the Middle East, North Africa, we think of a civilization that has been successfully contending with a harsh environment where temperatures are high, water is scarce, really, since the beginning of recorded history. So I'm just kind of curious, what are the key perils facing Mina right now?

    Andreas Pollmann:

    That's indeed a good point that you're making, Mark. When talking about Mina, actually, first point I always bring to the audience's attention is that it is a very heterogeneous area. The North Africa has its specifics, and you have the Arabian Peninsula, which also has the specifics that you mentioned, or rather, a harsh environment. What they do certainly have in common is a very threatening environment and also, natural catastrophes that are looming. Unfortunately, Mina and the Arabic Peninsular is struck by regular floods and rainfall, believe it or not. I mean, obviously, you would think at Mina region, look at Saudi Arabia, it's desert. It is, but it still rains.

    For example, when you look at the United Arab Emirates, there is even cloud seeding and rainfall is something that they need. They need to somehow produce sweet water. If you look into Oman, and now we are really at the east part of the Arabic Peninsula, there's frequent typhoons and tropical cyclones actually, who hit the coast of Oman, who can also hit the coast of the United Arab Emirates and Dubai. On the Arabic Peninsula, the last major event happened in 2019. There were some floods and there were cyclones and typhoons in 2017 or so. But that gets quickly forgotten, particularly floods. Naturally, water evaporates quickly. But the damage that remains, is increasing. And what I'm saying is actually, applying to the entire Arabic Peninsula.

    So water is a topic not only to ensure that you can still survive, but it's also, a threat because controlling rainfall, for example, cyclones or hurricanes, which can hit either the eastern part of the Arabic Peninsula, but also, the Red Sea. This is certainly actually a topic, a threat that is hitting the area more and more. The area where actually, you see the deserts or the central part, is obviously, less affected. They have different problems. This is drought, but this is certainly an exposure that comes from a climate perspective, becoming increasingly more difficult.

    Mark Maroon:

    Right, that makes a lot of sense. So what are some of the things that you're looking at from an underwriting perspective to try to control some of the risks that you see come across your desk?

    Andreas Pollmann:

    So raising awareness about this continuous exposure and the higher return of return periods, is something that we continuously do. On the same note, of course, we tell our clients, if you want to get your property, lives or whatever insured, first of all, you need to educate your clients. And then, of course, we need to work together to find the right protection for it, and you need to buy the right reinsurance to spread the risk and not retain too much in your books. So awareness, and then finding solutions and offering, of course, our good capacity over and above our knowhow, this is the way we do.

    But the awareness and the cooperation with our insurance companies, our clients, does not stop. A very important role is actually what the policy makers and the governments are playing. I give you two examples. Again, Morocco jumping to the west and then later to the east.

    Morocco has been the first one leading by example. Definitely, a role model in devising a cat pool, which has two aspects. One is, let's call it the conventional catastrophe, protection against earthquake, amongst others, but predominantly earthquake, which is now actually helping them. The other one is a parametric trigger product, which helps the uninsured people in Morocco. Maybe I haven't mentioned in the beginning that the penetration ratio of insurance in this region is relatively low. So Morocco was really leading and spearheading the initiative to implement cat protection in the market by making it, and this is the magic word, compulsory. Although people sometimes feel it as a tax, I remind everybody by saying insurance is boring until you need it, and now it's needed and it's helping.

    Now I do my jump to the west. There's another market, Oman, who actually took the role model example that Morocco gave, and they're now busy implementing something similar. Both have in common that this is driven by the governments. Without the government and without the push, by making a compulsory or by a strong lobby activity by the government, things are not really happening. But once it's there, it really helps. And as I said, Oman is the second one, and I'm very confident that there will be other governments who also follow the route to either buy parametric trigger products or apply their mind on making certain protection compulsory.

    Mark Maroon:

    So that was kind of where I was going to go next with this, because I was curious of your opinion around what some of the different regions around the world can learn from some of these resilient efforts from Mina. Do you think going compulsory really is the way to go to go? Or do you think there's going to be a little bit more of an influx of some of these parametric products?

    Andreas Pollmann:

    Good question. Parametric products have a certain advantage, but also a disadvantage. And the advantage is obviously, and this is in the nature of the product that you define the trigger, and then you have literally, instant payout without many questions or much question asked. What it actually does, it just is a once off payment of whatever hundred of millions, and then country or the economy goes with it. Insurance has different values attached to it by just transferring funds. And this is, let's call it the conventional cat covers, which actually look into what is really the exposure, what type of risk do we have to model, what is the return period, what parts of the country are actually exposed? And then get the insurance industry and the policy holder along with the government to say, "Okay, what are protective measures?" So this type of learning exercise that we take our clients and the governments with us, this only you do once everybody is aligned on buying proper protection and not only, although we said it, pleasure, not only parametric trigger products who really only deal with funds.

    Mark Maroon:

    Let's pause here and pick up in our next episode. I'd like to have you talk about the partnerships that are at play in the Middle East and Africa that are helping close that insurance gap. So listeners, please join me in the second half of my conversation with Andreas Pollmann and go to for more information on this topic.

    Part 2: 

    Mark Maroon:

    Welcome to Climate Check. This is Mark Maroon, vice president and head of portfolio management and reinsurance for American Modern, a Munich Re Company. We're continuing my conversation with Andreas Pollmann, client management executive and head of department for Munich Re's clients in the Middle East and North Africa. Andreas, in our last episode, you were discussing the perils that the Middle East and Africa face from climate change. Can you tell me more about the partnerships that are helping close the insurance gap in this region?

    Andreas Pollmann:

    Partnerships. Yes, Munich Re is actually proud to have been working in the region now since the late 1960s. So we're actually present in the region for a very long time, literally even before the oil boom started. So we have partners there for many decades, and somehow we inherited also, of course, the relationships to our clients and people working there from, let's call it, generation to generation. So what does it mean? First of all, we have very trustful relationships. Clients understand who Munich Re is and what we do for many decades and what we have contributed in the past already.

    And also they're very keen on actually listening to us and getting their advice also going forward. So apart from the history we have from the experience and the very solid relationships, we have all the fundamentals and the partners in the market actually to play a good role in helping our clients to play their role that they assume in the respective market as insurance companies. So examples that would come to mind is risk management. So we help them and they convert our risk management advice into their products and their offerings to their clients.

    We augment product innovations together with them, and also we help them to come up with solutions to better sell and increase their distribution channels. One example I can give is aggregators are really not that frequent in the market, but they're a good tool to promote insurance awareness and make the consumer feel well or feel good by having good choice at a good price. So also encouraging our clients to live up to that competition that comes is another example how to increase the penetration and work with our partners going forward.

    That's one example. Another one is certainly when looking at renewable energies and the new technologies, somebody has to ensure it. So educating, telling our clients what is the best cover for a solar power plant or whatever. This is something that we deliver to them that they take with a high level of acceptance because of the very good relationships we have. Third aspect, this is of course the quality of the insurance markets. One of the aspects that we still find is that we have a lot of very solid relationships, would be inclined to say maybe too many because there's a very high fragmentation in the markets.

    This has the downside that of course you can have many meetings, but what we need is a solid insurance industry that is actually having insurance companies that have the power and the strength and the stamina actually to work the long while to get things improving. I gave examples, innovations, rolling out innovations, improving in distribution, etc. So we would also like to see and encourage this with the respective stakeholders that the consolidation is taking place. So eventually we'll probably have less partners on the market, but even better ones.

    And this is something we're also working on, particularly the Saudi Arabian area or the Arabic Peninsula has been like the fuel station of the world for many decades since the '70s. So the accumulation of wealth that happened on the Arabic Peninsula in the last, let's call it 20, 30 years or so is amazing. So the [inaudible 00:03:50] that is exposed now to natural catastrophes has really grown significantly over the past decades. If you just look at Dubai, for example, for those who have been there, what you're seeing now is amazing, so protecting these from harm from natural catastrophes is very important.

    Mark Maroon:

    I think that's an interesting point because that's definitely something that I think we're seeing across the globe is sort of the proliferation of exposure and the amount of value at play that's going to be potentially exposed to these different natural catastrophes.

    Andreas Pollmann:


    Mark Maroon:

    So how do you think climate change is affecting a widening protection gap in MENA? Because it sounds like that could potentially be an increasing issue right now.

    Andreas Pollmann:

    Protection gap, Mark, is really one of my biggest, let's call it concerns but also ambitions from a business point of view. Our reason for this is that the penetration, let's call it my markets and the region, and this is actually the unifying factor or the common denominator, the penetration and then trends penetration is very low. Whether it's an earthquake or a flood or something else, this can happen anytime everywhere. So you see big economic losses that may hit more wealthy or less wealthy economies and leave them alone with little insured loss, little protection.

    I think it should be our, or actually I see it as our ambition as being one of the responsible persons for sales and the P&C, property and casualty in this region to never sleep and never lay back on encouraging people to promote insurance. Our partners come up with the right protection, the right products, and then of course do everything that closes the protection gap and we're a key audience actually is the government and the regulator. When you talk politics, of course, there's always completely different set of obstacles, but still, you never give up and try to make the policymaker promote insurance and get the people's mind and attention on buying insurance protection for the houses.

    Simple product like household or house owner is rarely seen in the Middle East, and this must change.

    Mark Maroon:

    I'd kind of be curious to hear your opinion on how MENA compares to other parts of the world in terms of adopting strategies that would help to foster climate resilience against some of these events.

    Andreas Pollmann:

    I would take your question as an example, Mark, to talk about renewable energies. Saudi Arabia, oil rich country, biggest oil producer in the world, but they're also probably an area that is blessed by a lot of sun. Sun has, of course, two factors. It can be very hot and dry, but also these days it's a great source of energy, of renewable energy. Very cheap, cost is literally zero except the infrastructure that you have to build. And once it's up and running, you can actually use it. And Saudi Arabia with its ... And I'm taking Saudi Arabia as the key example. Morocco is another one, by the way.

    They are investing a lot into renewable energies, so [inaudible 00:06:39], renewable energies, and then next hopefully to replace this big oil supplier by becoming a very big hydrogen supplier. So green hydrogen, so hydrogen produced out of solar, which is there is nothing greener than that. So actually changing the role from an oil producer to a green energy producer. And here to coming back to your question, our role is certainly to help supporting the investments that go with it. Not only with know-how, but also with products.

    Very basic area that comes to mind is performance guarantees, but also of course insuring the property and the assets that are built and protect them actually through insurance from any unforeseen events.

    Mark Maroon:

    So are there any other lessons the rest of the world can learn from climate resilient efforts in MENA?

    Andreas Pollmann:

    I think so. Mark, yes. So again, Arabic peninsula, this is an area that is transforming into an oil rich economy, into something else. A more privatization, bringing people into entrepreneurship. And also from a climate perspective, many rule makers, policy makers, understood that there is an exposure, there is a threat. So actually understanding what is the threat, floods, for example, hurricanes, typhoons, whatever, bringing a lot of rain and uncertainty and damage. Then preparing against it, consulting reinsurance, for example, buying enough protection, encouraging the industry to buy insurance, preparing the insurance industry of the respective domestic market to be aware of what's happening and actually bringing this into action.

    Let's call it rapidness and execution. This, I think, in this region is something that is really a role model. The region is a role model that other countries in the world can learn from. Maybe I sound a bit biased because I'm in charge for the region, but certainly understanding the problem and then acting and executing. This is something that I'm really good at. This region is attracting a lot of investment for foreign investors or any investor he wants, of course, stability. Political stability is on a good path, I think, slowly but surely.

    When it comes then to climate protection, the same applies. You want to have certainty as you want to have certainty as an investor. You want to have the certainty that whatever you invest there is properly insured. It's managed by a healthy and sophisticated insurance industry. And again, here we come into play to promote and do whatever we can do to contribute our fair share as an insurance reinsurance company to the prosperity of that region.

    Mark Maroon:

    Yeah. It sounds like things are definitely moving in the right direction and really dynamic time to be working in this region. So Andreas, thank you so much for taking the time to speak to us today.

    Andreas Pollmann:

    Thank you. Mark, it's been a pleasure.

    Mark Maroon:

    And listeners, if you'd like to hear more about the insurance industry's role in advancing climate change solutions, please subscribe to our podcast. And as always, for more information, head on over to and we'll see you next time.

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