HDI Global is the industrial insurance subsidiary of German (re)insurance and investment group Talanx –which is also the parent company of reinsurance giant, Hannover Re. “What a lot of people may not know is HDI Global SE Australia provides insurance for almost half of the Top 200 companies listed on the ASX.
Along with our underwriting for other major corporations and our steadily expanding mid-market insurance book, our Australian team are on track to write over half a billion in insurance premium by the end of this calendar year,” says Stefan Feldmann, Head of HDI Global Asia Pacific and Managing Director HDI Global SE, Australia. “The local market is increasingly recognising we are a meaningful player, and within HDI Global our contribution from Australia and access to the Asia Pacific region is becoming core to the group.”
A global player
On a worldwide scale, HDI Global grew its premium income by 17.9% in financial year 2022 to EUR 8.9 billion. Since 2018 it has almost doubled gross written premiums. “As an industrial mutual, HDI was created by industry for industry,” says Feldmann.
With its 120-year history as an industrial mutual, HDI is a household name in Germany and throughout Europe and a leading insurer for most of the DAX, a stock market index of 40 major German blue chip companies. Parent company Talanx recently raised its profit forecast for financial year 2024 to more than EUR 1.7 billion.
The group draws its financial strength from being an industrial mutual. HDI V.a.G is the majority shareholder owning 76.7% percent of parent company Talanx, which means they control their own destiny. Recently, Talanx increased its free float from 21.1 percent to 23.3 percent on the DAX (German stock exchange).
While strengthening Talanx membership in equity indices, the company will receive gross proceeds of approx. EUR 300 million from the capital increase which will further enhance the already solid capitalisation of the Group for further organic and inorganic growth around the world.
International Programme capabilities
Born as a mutual insurer of the German iron and steel industries and the liability association, HDI Global SE has continued to morph into one of the most respected and leading international insurers offering a broad and responsive range of insurance solutions.
With its strong financial roots and combined global capabilities, Feldmann believes HDI is well positioned to become a leading provider of corporate risk management and risk transfer solutions in Australia and the Asia Pacific region.
“Corporates expect a lot from their insurance partners and want to know they have a reliable and trustworthy partner,” says Feldmann. “With a network across more than 175 countries, we can provide unparalleled solutions to businesses who operate nationally, and also valuable insights for multinational clients on foreign markets and compliance.
HDI has written approximately 5,000 international programmes globally with around 27,500 local policies in different countries around the world. Our experience is world leading in this space and our network of international programme and underwriting experts have a great reputation for being solution-focused.
“There’s been significant growth in the number of international programmes produced from our local Australia office, as we have invested heavily in market leading professionals in this segment,” says Feldmann. “Our underwriters are at the forefront when clients and brokers request international programmes, particularly in the Property, Liability, Marine and Accident & Health lines – and now the market is recognising who we are and what we’re capable of.
Our experts navigate local regulatory requirements while meeting the cover requirements of our customers.” Through HDI’s IP-Web clients can control and manage their international programmes and have transparency over their multi-national policies.
Clients and their brokers can access all their details at a glance including premiums, coverage conditions, asset locations and claims developments.
Recognising the need for flexible solutions and claims excellence is central to the HDI proposition. It’s a philosophy Regional Claims Manager Asia Pacific, David Lloyd, has developed with the team. ‘‘Clients buy insurance to protect themselves.
When the unexpected happens the impact is felt on the balance sheet, but also can influence brand and reputation,” he says. “With the expert knowledge on our team, we work collaboratively with clients to ensure reasonable resolution of any claims. When claims take the form of litigation, we are aware that we are defending the case in their name so work to protect and support their reputation throughout the process.”
With litigation increasing, along with claims inflation the HDI team work closely with brokers to ensure cover is appropriate to clients’ needs. “At HDI, our claims team have extensive experience and work closely with underwriters so we have established relationships which is important when claims are made.”
There has been a steady increase in class actions in Australia since 1992 when favourable legislation allowed for new litigations he says. “Working on an ‘opt-out’ model, to commence a class action in Australia, seven or more people are necessary.
Over the last three decades, there’s been $8 billion in settlements,” Lloyd said. “Forty of those class actions demanded $50 million or greater. We’re watching these cases closely particularly in the current claims inflation environment for their potential impact on clients.”
Insurance demands from corporate clients are always evolving and recent inflation has had a considerable impact on the insurance industry as replacement values become more difficult to predict, which in turn makes managing risk more complex.
The accuracy of declared values and claims inflation is another area where the team looks to work closely with clients, particularly given supply chain delays and extended reinstatement times.
Business interruption periods are up from what they were a few years ago and as the cost of replacing an asset goes up, so the declared value should also be increasing. “Valuations establish the correct value of the property asset or business at the time the insurance policy is taken out.
To have valuations right from the start is important for a streamlined and positive claims experience,” says Lloyd. ‘‘Businesses need to know they can count on their claims management providers when time is of the essence. They need to know they will have a reliable partner throughout the whole claims process,’’ says Lloyd.
A partner in transformation
Today, the market is rapidly evolving and includes new areas where insurers face a completely novel set of claims such as energy storage, solar and wind. Transitioning to renewable energy is one of the most significant tasks of our time.
Mitigating climate change and reducing dependence on fossil fuels have become paramount and HDI is committed to working with clients to understand their challenges and their roadmap for the future. “The insurance industry is evolving along with the transition to renewable energy.
As a partner in transformation HDI is an important part of the journey,” says Feldmann. “We are working with advanced technologies such as data analytics and climate modelling to assess risks more accurately.”
At the start of 2023, there were 106 renewable energy projects under construction in Australia, which involved a capital investment of about $25 billion. HDI is a leading underwriter for many of these projects, particularly in the Engineering, Liability, and Marine lines.
At the same time, the industry continues to learn from the loss activity that the sector has experienced in recent years.
Haris Michaels, Engineering Underwriting Manager at HDI Global encourages brokers and clients to engage with the insurance industry early to understand the risks.
“Technical maturity is a work in progress, particularly in the wind, battery storage and hydrogen space which is still in development. Likewise, our understanding of natural catastrophe risks continues to evolve, and we are eager to share this knowledge with our broking and client partners to help with mitigation efforts.
“With our experience, we understand the industry’s pinch points so these can be considered when it comes to the planning, development and operation of assets. This means we can guide brokers and clients based on our experience to obtain a robust and balanced outcome for all stakeholders,” says Michaels.
“HDI have been, and continue to be a part of, the renewable energy sector. As a global organisation we are led by our sustainability strategy, but our team also have a strong interest which drives our support of the sector.”
Future of the market
Looking to the future, Feldmann sees still strong growth potential for the business as a true relationship insurer. “I believe a lot of our clients and broker partners value the strong culture and ‘can do’ attitude to finding solutions that we have as a team, which is what sets HDI Australia apart.
We work hard on keeping our start-up culture alive, even though we have been running as HDI Global for 12 years in Australia. Our team bring a lot of passion to the business and are looking after our brokers and clients with technical expertise and enthusiasm.”
With offices in Sydney, Brisbane, Perth and Melbourne and team members in Adelaide, HDI Global is working to bring the best of its local team of experienced underwriters, risk engineers, claims experts and international programme specialists to support clients nationally and globally.