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Business Risks

60 years of Schadenspiegel

This year, Schadenspiegel is celebrating its 60th anniversary. It started out in 1957 reporting on losses in the fields of machinery breakdown and erection all risks insurance. Today, the magazine covers a wide range of subjects, from detailed reports on individual loss events to in-depth risk analysis. Tobias Büttner, Head of Claims at Munich Re, talked to two Schadenspiegel veterans, Detmar Heidenhain and Paul Einhell, about the early days of the publication.

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From left to right: Tobias Büttner, Paul Einhell and Detmar Heidenhain

Tobias Büttner: Welcome Mr. Einhell and Mr. Heidenhain. We are very pleased to have this opportunity to talk to you about the history of Schadenspiegel. Sixty years ago, how did the idea first come about to bring out Schadenspiegel as a new publication?

Paul Einhell: As machinery breakdown insurance was an important line back in the 1950s, company directors Gerathewohl and Waldemer first came up with the idea of a publication. To help with client acquisition and marketing, they wanted to provide primary insurers with something that really highlighted the need for this kind of insurance. They felt the ideal medium would be a printed publication with pictures illustrating losses and which, in contrast to other publications, also focused on technical aspects. I only became involved with Schadenspiegal after I joined the Engineering Department about seven years after it first came out, so I can only make an educated guess.
 
Detmar Heidenhain: Loss adjusters were also very appreciative of Schadenspiegel. They found a lot of useful information for their work in the articles. Even though the initial focus was on machinery breakdown insurance, the loss spectrum was always wider than that. It included damage caused by miscalculating the dimensions of falsework during bridge construction, problems with installing oil tanks and the risks involved in driving an excavator over recently filled land.
 
Büttner: How often did Schadenspiegel appear, and how was it produced?
 
Einhell: To begin with, there were no fixed publication dates. We simply waited until enough interesting claims had accumulated in the different departments. We sometimes had to wait quite a while as we only featured settled claims so as not to interfere in ongoing cases. And there was no real editorial office to begin with. I was responsible for the publication for decades as a kind of one-man editorial team, and I wrote many of the articles myself. These were usually then passed on to the Chief Engineer for approval. It was only much later that we received any editorial support.
 
Heidenhain: Over time, we also tried to persuade the underwriters responsible for a specific claim to write articles, which we then published under their own names. For the authors, it was a good way to make a name for themselves with colleagues and clients.
 
Einhell: The appearance of Schadenspiegel has changed dramatically over the years. The first few issues had no cover picture at all. Then in the mid-1960s, we wanted to enhance the external impact of the publication and introduced a more attractive cover design. So the first cover picture arrived in 1966, still in black and white at that time. Then in the early 1970s, the pictures were produced in colour, and there was a good reason behind the change. During a fire loss in Austria, the high temperatures caused the reinforcing steel to melt. But you would have seen nothing of this effect on a black-and-white photograph.
 
Büttner: Was there a separate Claims Department at that time, or did underwriters still have combined responsibility for underwriting, claims, risk inspection and maintaining client relations?
 
Heidenhain: When I joined Munich Re in 1975, it was usual in Engineering for underwriters to handle individual claims. There was a sub-group that dealt with claims, but back then they used to say that whoever underwrote the risk should also settle the claim. That practice was later changed for governance reasons. A separate Claims Section had been set up in the Liability Department at a much earlier stage.
 
Büttner: What type of major losses did you deal with in the early days of Schadenspiegel?
 
Heidenhain: The main areas of focus were the engineering lines, in other words machinery and erection all risks. At the time, power plant claims, such as damage to turbines, could involve between 30 and 50 million deutschmarks and were considered major events.
 
Einhell: Back then, losses from natural catastrophes did not play anywhere near as important a role as they do today, as very few were insured. It was not until Munich Re established its “Joint Office for Natural Hazards” in the mid-1970s that greater focus was placed on these risks.
 
Büttner: How have technical insurance covers changed over the years?
 
Heidenhain: In the 1970s, Electronic Equipment Insurance was launched as the use of computers and electronic control systems began to spread. Munich Re wanted to get in early and offer a product that you could approach clients with, and which would open up reinsurance opportunities. Another innovative product was in the field of cooling systems – the DOS (Deterioration of Stock in Cold Storage) policy. With this cover, you could insure both the cooling equipment and any deterioration of products and foodstuffs in cold stores resulting from damage to the equipment.
 
Büttner: Was Schadenspiegel partly conceived as a loss prevention tool?
 
Heidenhain: Absolutely, but as well as Schadenspiegel we also had “Technology for Underwriters”, another publication from the Engineering Department. It described the main risks and loss features, for example for certain kinds of machinery. Loss prevention was one of the principal aims behind this brochure, but it was also meant to assist underwriters when writing risks. Until it was discontinued, Technology for Underwriters was always included with Schadenspiegel as a supplement.
 
Büttner: As well as underwriters and claims technicians, Schadenspiegel is also aimed at scientific institutes and organisations. At what point did the magazine open up to a wider readership?
 
Heidenhain: Until the end of the 1960s, Schadenspiegel was only made available to Munich Re cedants. When Dr. Jannott became Chairman in 1969, a more relaxed approach was taken, and research institutes, industrial companies, brokers and experts were added to the mailing list. But only after a direct request had been received and with the express approval of Dr. Gerathewohl. In special cases, a personal letter was even attached from the Chairman of the Board of Management, Dr. Jannott. The fact that distribution was a management issue shows the importance the company attached to Schadenspiegel.
 
Büttner: Even before I worked in Claims, I used to enjoy reading Schadenspiegel, simply because it took an in-depth look at important insurance issues. If you look at Schadenspiegel today, what is your general assessment?
 
Einhell: It makes a welcome change from other Group publications in that it does more than just briefly outline loss events. The topics, i.e. the losses, are examined in detail and this provides experts with added value that would be very difficult or impossible to gain from other publications.
 
Heidenhain: The aim today is still the same as it was then: to draw clients’ attention to the potential risks in their portfolios. And at the same time, Munich Re wants to position itself as a partner that can both reduce the financial burden on primary insurers and assist them with tips and advice on claims assessment and processing. In that sense, Schadenspiegel is still providing a valuable service today.

Further Information
Munich Re Experts
Tobias Büttner
Head of Claims at Munich Re
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GABRIEL GONZALEZ GARCIA
MUY BUENA REVISTA UN SERVIDOR TIENE EJEMPLARES DE 1972
Gerrie Zaaiman
I once walked into Dr. Albrecht Tielsch's office, who was a Munich Re engineering risk specialist. He asked me out of the blue, "In Loss of Profits insurance, what do you insure?" I answered, "Time." He said, "You are the first person who gave me the correct answer." This was typical of the mindset amongst the Munich Re Engineering Team members, namely to challenge our thinking about engineering risks, insurance and re-insurance all the time.

It is a major challenge to provide mechanisms through which the future engineering risk specialists could learn more and faster about these topics from the senior engineering risk specialists. On-the-job learning from the senior Munich Re engineering risk specialists were always the fastest method, but training courses and reference material such as Schadenspiegel, Technology for Underwriters, The MRA Book of Engineering Insurance, the Handbook of Loss Prevention by Allianz, the IMIA papers, from the Advanced Study Groups, etc. are indispensable.
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