Headquartered in Germany, HDI Global provides insurance to a range of corporate customers. InsTech’s Ali Smedley caught up with Claire McDonald, Executive Board Member and Chief Underwriting Officer for the property, engineering and marine lines of business at HDI Global SE. The discussion covered how the company is thinking about managing climate change, how it is supporting clients and how it works with technology companies within IoT, cyber and more.
Claire, what does your role at HDI Global involve?
I joined the company in 2019 after working at Allianz for over 30 years. I am now a member of the Management Board at HDI Global SE. As part of this I am responsible for global property, engineering and marine risk for underwriting and claims. I also oversee the risk consulting group including the engineers that we send to sites to meet clients and who assist our clients in the development of risk prevention and management strategies.
Climate change is becoming an increasingly important topic for insurers. How is HDI Global addressing this?
Weather events are becoming more extreme, which is affecting the industry’s balance sheets. For example, recent cost estimates for the June 2022 hailstorms in France are reaching eight billion euros.
At HDI Global, we are focused not just on underwriting but also risk mitigation and resilience. We help clients plan for the future by understanding their needs and how they may be affected by climate change. For example, we can evaluate a wide range of environmental risks that a manufacturing plant may face including potential water scarcity or even its risk of flooding. This enables us to underwrite more effectively but also support clients to create resilience plans.
How is HDI Global supporting clients with the green transition?
As HDI Global underwrites on an individual basis, we work with clients to understand their business, how it is transitioning from more carbon-intensive activities and how its associated risks will change. Over time clients may change their supply chains, production methods and materials, leading to a completely different risk profile. We are able and willing to accompany them throughout this journey.
Which business lines are you seeing impacted the most by climate change?
Property and engineering sectors are being impacted to a large degree, followed by marine. Climate change is also leading to new opportunities as the world transitions to a lower carbon economy. New engineering projects such as hydrogen projects and offshore wind farms are being developed. At HDI Global we have to understand the risks associated with these new projects, including their supply chain and if prototype technology is being used.
What do you see as the biggest challenges and opportunities regarding climate change in the coming years?
The biggest challenge for the industry will be keeping natural catastrophes insurable. This is an issue for both the direct and reinsurance market. If insurers can no longer afford reinsurance to protect their balance sheets, this will affect their ability to offer insurance to the direct market.
There are many opportunities for insurers to help clients respond to climate change, including advisory services that would typically have fallen outside of the traditional insurance offering. Using technology such as IoT to help with risk mitigation and early warnings for natural catastrophe events is also a big area of opportunity.
How is HDI Global addressing ESG within its own operations?
HDI Global’s ESG strategy has mostly focused on the “E”, but we are working to build out the Social and Governance aspects too.
HDI Global’s head office was designed to be a very low impact building. A significant amount of an office’s energy consumption is due to hot water usage in office bathrooms, therefore our office bathrooms have no hot taps!
HDI Global has started making underwriting exclusions and limits. For example, we have made the decision to limit our fossil fuel portfolio. This means that if we underwrite new coal projects we have to stop insuring another facility in our fossil fuel portfolio.
Why has HDI Global joined InsTech as a corporate member?
Being part of the InsTech community is a great way to connect with innovators within the industry. We can learn from others whilst sharing our own expertise. Whilst InsTech is a global network, there is still a strong London presence to the community. As a German-based company, it is great to expand our network.
HDI Global is also interested in partnering with other organisations, and InsTech is a great platform through which to make those connections.
What companies is HDI Global looking to connect with?
HDI Global has its own internal startup company within the organisation: HDI TH!NX, which is our vehicle for partnering with technology companies. We are interested in partnering with companies within the IoT, cyber, ESG and broader risk mitigation space.
We recently announced a partnership with ACCURE, a battery intelligence software company. ACCURE can monitor battery performance, providing us with a new data source which is improving our underwriting and risk management. HDI Global is interested in any partnership that can change how we offer insurance and improve the service that we offer customers.
How should readers reach out to learn more?
To learn more about the areas that HDI Global is active in please visit our website. For any potential partnerships, people should reach out to York von Falkenhayn, Head of Corporate Development or Dr. Verena Brenner, Managing Director of HDI TH!NX.