FULLCOVER 10_EN

Sharing our passion for insurance
THE
#10 Spring 2017

will be there!
This is the motto of the MDS Group, which goes so
well with the launch of FULLCOVER 10.
We have arrived at edition number 10 in what
has been a great and fantastic adventure. We
created this magazine with the world in mind,
using our ideas, images and design to transform it
into something for every market, region, partner,
expert, culture, risk and history.
This 10th
edition is special, as it should be.
Starting now, we can set our sights on number 20,
continuing to reaffirm FULLCOVER as a vehicle
for sharing knowledge, innovation and opinions,
and recognising the contribution that one of
society’s most beautiful, humane and important
sectors makes to the economy.
It is also an opportunity to acknowledge and thank
everyone who helped us make this dream come
true, one edition after another.
First, the entire MDS team in charge of the project.
FULLCOVER is indeed a homemade product, put
together with passion, energy and enthusiasm; it’s
a great dedication to our profession of insurance
and risk specialists. I wish to send a warm embrace
to everyone involved over the years.
To everyone who contributed with ideas, texts,
pictures, interviews and images. In our midst we
have had leading market personalities, experts
from different areas and regions, consultants,
researchers, insurers, reinsurers and brokers.
To everyone who has invested in and supported
the different editions of FULLCOVER, with its
brand, image and advertising, bolstering our
magazine’s reputation and visibility.
This 10th
edition has three main themes:
QBE, the Future and 10, and I invite you
to discover them.
José Manuel Fonseca
MDS Group CEO
7

4EditoriaL
8John Neal
Interview with QBE CEO
24Shades of Grey:
Macro outlook
2017
By Devadas Krishnadas
2810 Porto Icons
36Mastering
Pillar 3
reporting
By Antoine Bourdais
40Apollo Group
A major investor in the Portuguese
Insurance Market
Tranquilidade: Maintaining
that competitive edge
52Insurance
Development
Forum – IDF
58The broker
of the future
By Steve Hearn
60Bradesco
A leading insurance
company
6610 MDS
Milestones
director José Manuel Fonseca · editor in chief Paula Rios · editorial committee Ângela Fonseca · Carla Gonçalves · Jacqueline Legrand · Liliana Baptista · Susana Neiva
contributors Alex Wise · Antoine Bourdais · Christian Wertli · David Butterfield · Devadas Krishnadas · Doug Alexander · Francesca Breeze · Hélène Chauveau
International SOS · Jamie Crystal · Joel Cleto · Juerg Trueb · Marine Charbonnier · Pedro Castro Caldas · Phillip K. Schulz · Shivaun Moreno · Steve Hearn
Tanguy Touffut · Vincent Vandendael · Zurich · title FULLCOVER · author MDS Group · edition number 1st
Edition (FULLCOVER 10) · publisher MDS Group
place of publication Porto · date of publication April 2017 · circulation 4000 · design Studio Dobra · printing & finishing Lidergraf Sustainable Printing
legal deposit 374241/14 · issn 2183-6787
8

74Dossier
Risks of the
Future
Overview
Changing the standards
Blockchain
New risks in a changing World
Driverless cars
Share economy for business travel
Reducing the risks from
rapid demographic change
Regulatory risks and their impact
on the reinsurance industry
Standing up to the weather
Parametric insurance
R(Evolution)
117Brokerslink UK
Bridge
The Brunel of Bridge building
Manchester by Roger Potts
UK Insurance Market
129Brokerslink
Global board
Brokerslink
Conference 2016
14010 Brokerslink
Faces
149MDS
Ana Mota
A woman’s perspective on insurance
André Tostes
When numbers tell a story
MDS Africa
Growth, opportunities and challenges
MDS News
16210 MDS Faces
169Sonae Sierra
At the forefront
of the retail revolution
176TRIVIA: IN THE
post-truth era
By Pedro Castro Caldas
178MDS releases
Trivia
180Readings
182FULLCOVER
Behind the scenes
18610 FULLCOVER
Editions
9

QBE has had an international dimension to its
operations for over 113 years, and today this extends
across 37 countries and employs 14,500 people.
fullcover speaks to John Neal about how the
business has evolved and grown as a global insurer, the
importance of culture and diversity, and what drives
an Englishman, now living in Australia, working
globally and with a love of Portugal.
INTERVIEW WITH QBE GROUP CEO
JOHN
NEAL

m d s m a g a z i n e
12
Acclaim and QBE
Singapore have a
relationship that goes
back decades. However,
in recent years, we have
seen QBE responding
to our Acclaim team
in proactive ways,
serving the needs of
our clients in Singapore
and the Asian region.
They are prepared to
break the boundaries
to craft creative risk
solutions, responding to
the challenging needs of
our corporate clients.
Anthony Lim
Acclaim
QBE's Group Head Office, in Sidney, Australia. Photo by David Clare, First Light Photography.
* The names behind QBE: The
Q was taken from Queensland
Insurance, B from Bankers' and
Traders' and E from The Equitable
Probate and General Insurance
Company, the companies that
gave origin to QBE.

f u l l c o v e r
13
QBE* has been through a process of simplification
and refocusing of its international operations.
Can you tell us more about the QBE of today; its
ethos, capabilities and aspirations? How have these
changed from when the company was founded 130
years ago?
We have always had an international aspect to the
business. An office was opened on Fenchurch Street
in London in 1904, and some of the offices in Asia date
back over 100 years. We grew dramatically throughout
the 1980s, 1990s and early 2000s with acquisitions; there
were 150 in a 25‑year period. So this growth effectively
constituted an international insurance company.
Over the last four years we have been trying to
crystallise the value of what a global, opposed to an
international, insurance company looks like, focusing on
where we want to be and where we do not. This goes to the
heart of our business culture, the vision and values, how
our customers perceive us and how our people think and
feel about the business. So in some ways our legacy has
been helpful. It is great to have such a footprint, to be able
to play in the world of insurance rather than be limited by
geography or product.
But, it’salmost asdifficult toflipthison itsheadandask
how shouldwe think andact asa globalinsurer.Anything
we doin insurance isn’t complicated but it iscomplex.
Marketsare different; eachwillhave their ownviews.Weare
able tolook at globalinsurersthroughparticularlens.We
can certainlyview themthroughthe lensof thecustomer;
sowhat’sthe value of being globaltothe customer? Wecan
alsolook at it froma diversityperspective, a development
perspective for our people.
But in reverse, I’m one of the people that doesn’t believe
in global product management. I think geographies
are different. Yes, property & casualty insurance is
property & casualty insurance, but the way in which it’s
translated and distributed can be very distinct in different
geographies, and I think you have to respect that.
So, for me, it is about having a global capability behind
the organisation but with an exclusive basis of delivering
locally; that’s got to be the end product. It’s been an
interesting four years; sort of re‑engineering the company
to be global.
QBE has a presence in all the major insurance hubs in
the world. We can legitimately face off to the broker and
their customer and say, if you have got a multinational
interest then we have a capability to deal on that basis.
Our emerging market footprint is 22 countries across
Asia and Latin America which is different and hard. If you
say that one of the values of being global is the ability to
translate uniformly then geography adds complexity. If
you set up a multinational capability in London then you
are doing this through the lens of one country. You do that
in our emerging markets and you are doing it multiple
times. But, I think we would be naïve to run the business
for the short‑term, you have to run with the longer term in
mind and doing that means those emerging markets will
translate into success.
The positive outlook for Asia Pacific
will clearly continue to drive increased
competition. Against this backdrop,
QBE for its part is excited about the
wide‑ranging opportunities presented
in Asia Pacific for our broker partners
to build and expand market share. The
Agency space remains the primary source
of intermediated business with local
brokers looking to global networks like
Brokerslink to help provide cross‑border
solutions for customers.
Doron Grossman
Head of Distribution, Brokers and Agency
– Asia Pacific, QBE Insurance

14
regrettably, until an event. In my view it will take a major
world event to turn the market.
Our assumptions are that QBE can grow but relatively
nominally at about 3% top line per annum. This will be
fuelled by two things ‑ emerging markets where growth
is expediential, about 11%, and a real focus around client
retention.
Then outside of these areas, we have to be smart in
terms of capital and cash management, tight on business
operational management and make sure claims are well
paid for the right customer and where there are challenges
we are tough on that. People get confused sometimes that
it’s all about cost cutting. We spent AUS$365m setting up
our service centres in the Philippines and that was about
delivering business efficiency and scalability. That’s how
we look at it.
The needs of global clients are evolving, so being able
to respond effectively to meet their requirements is
critical for brokers. How have their needs evolved
and how are QBE’s servicing capabilities able to
support brokers in delivering these requirements?
I think, increasingly, the successful businesses are
multinational; whether that’s importing or exporting
or physically having people on the ground in different
countries.
Part of our solution is to be more technologically savvy
in the way we can support brokers and their clients.
For a multinational it becomes hugely complex when
you start issuing policies across multiple geographies,
particularly with aspects such as tax and licensing.
What we want the broker and the client to see is what’s
happening. Therefore, we set up our systems to allow
broker and client to be able to see these areas and how
policies interlock, right through to being able to show
what is happening with a claim. These factors create
a speed of access that provides a comfort that, despite
the complexity of the business, there is clarity ranging
from jurisdictional compliance through to a clear line
on claims.
From an underwriting proposition we need to be a
little more joined up about the approach to a client; it
should not all be about underwriting. Who leads our
conversations with the broker should depend upon their
needs. That might mean be an underwriter or a claims
specialist or a risk analyst. We are happy to do it any
which way to respond to what is most important to the
broker and their client.
That is important for all of us because, if you can
provide that right level of service, whether you’re broking
or underwriting, the longer you retain the client the
more valuable the client becomes to you. The trust is
greater and it is a fairer understanding, so I think you can
actually, whether you're broking or underwriting the risk,
make a better margin.
Our three developed markets are roughly the same
size for us. We write roughly AUS$5bn in UK and Europe,
with a strong focus on the London market, and AUS$5bn
in North America and AUS$5b in our home market of
Australia and New Zealand.
We have a 30% share of the commercial market in
Australia. We are a big ticket and recognised brand and
that brings with it quite a lot of social responsibility. You
need to be thoughtful about how you position yourself,
being very conscious of the service proposition to the
customer and what the company stands for. So it brings
a different set of challenges.
But the QBE business, I feel, is nicely set. Our spread
across markets is exactly what we want so, to my mind,
the diversity by geography and product aggregates
enables us to be consistent in terms of the expectations
of our shareholders and our customers.
The global markets remain challenging on a number
of levels and with the ‘traditional’ risk pricing
environment no longer operating in identifiable
cycles, how does QBE ensure its pricing and risk
selection processes respond to these aspects while
remaining profitable?
Inmy30yearsininsurance,Ihaveneverseenpriceas
challengedasitistoday,never.It’satough,toughplacetobe.
The QBE team is hyper disciplined in how they go
about their business, we have been able to think through
this approach as we’ve gone through the process of
deciding what we want to be. We are very strong in
terms of benchmark pricing and technical pricing, and
understanding how we deploy capital and what that
means, and the team has done that very well at a tough
point in the cycle.
There are some things you have to do in business
because you have to run your organisation well. But,
ultimately, you are trying to facilitate and create the
optionality around growth. At different points in the cycle
that is difficult but if you can grow, you’re away.
I think if anything in the macro environment changes,
for example, the moment you see just the hint of interest
rate increase coming, it changes the model, and that can
make it just that little bit more manageable. Any change
in the pricing would give us the ability to grow quite
quickly. It is dependent on where you operate. In the
Australian home insurance market we saw inflation come
through in the claims line for the first time in probably
two decades, driven off the currency falling – it is an
import economy so all costs increased and that came
through in the claims line. This is what we think we will
see in the UK post Brexit; we are already seeing some
movement in the motor business line.
In Australia you can change price. We saw a move
from negative to positive in just six months, you can
play a harder price card to get it right. It is slightly more
challenging in the UK. As Steve Hearn at Ed has said
nothing has changed the market in the last 30 years other
than an event. The market will continue in this malaise,
Working with
QBE Brazil
strengthens
the
commitment
to offer quality
products to
our current
and future
clients.
Hélio Novaes
CEO, MDS Brazil

f u l l c o v e r
Editorial
15
QBE has focused on stabilising its North American
operations. What opportunities do you see for
speciality lines growth in this market?
North America has been interesting for us in that we had a
really focused business in the region. Then around about
2008, we became quite expansive in our acquisitions. We
went from 300 staff in one office to 3000 staff in almost
100 locations at just the time when the market became
challenging. We got ahead of ourselves in what we might
have wanted to do, so North America for us has been a
fundamental rethink of the business.
We have narrowed the market down to commercial,
corporate and specialty, where we think we have a
brand and recognition, and we have restructured to be
positioned in those market sectors. Our capabilities,
customers and brokers match.
We have mirrored the way brokers deal with the US by
taking a regional perspective. We have set up in the major
hubs with a very clear understanding of the environment
and market segments that we want to participate in.
While the North American market has regulatory
complexity with quite archaic processes, it is an
innovative market and quick to latch on to new products.
Once you understand the market, you are in the rhythm of
it, in many ways it is more stable and predictable.
For LatinAmerica as a whole, the economic
and the political environments show signs of
improvement in a couple of key markets, with
the average GDP growth expecting to rebound to
around 2% next year. Our strategy is on the lines
of business where we see the highest potential
for profitable growth, where there is the closest
connection to QBE’s core capabilities and where
the best opportunities for building the strongest
partnerships with intermediaries including
brokers and with policy holders in general.
Juan Suparo
Head of Major Trading Partner Engagement,
Latin America, QBE Insurance
QBE's Group Head Office, in Sidney, Australia.

16
We are currently writing about US$5bn and we can
probably write between US$5bn and US$8bn. By focusing
on the biggest brokers, the wholesalers and the super
regionals we can have relevant interaction with them
and, despite the overall scale of the market, still play an
important role.
IthinkwenowhaveagoodNorthAmericanbusiness–and
wenowhaveanothercoupleofyearstoimprovethemargin.
QBE has seen some strong growth in Latin America
in the first half of 2016. Do you see this as a
continuing key emerging market going forward?
And what about the role of Asia?
If you look at the QBE business today, 15% of what we do is
in emerging markets; this is roughly split equally between
Asia (predominately South East Asia) and Latin America.
Latin America is important to us with about AU$1bn
of premium income there. In my view it is a much
harder market for us than Asia. You have to grapple with
economic challenges that we are not used to dealing with.
For example, if you run a business in Argentina your wage
bill will double every three years because wage inflation
runs at 30%. You have a challenge both in managing the
cost line of running the business and on the claims line
because that same inflationary factor is impacting your
claims cost. You have very different dynamics in running
the business there. The specialty type insurance products
are really yet to materialise so you are looking more at the
retail and commercial insurance. So the economies in
themselves are challenging but in our view it is worth the
invested time.
We have been lucky to have been in Asia for a long
time. We have not had to buy into that market or not had
problems with joint venture partners that some have.
It makes the rhythm of the business easier, and the
returns are great. Growth is challenging; the markets in
Hong Kong and Singapore are as competitive as anywhere
in the world. People think Asia is an easy ride, it is not. It’s
a strong market for us and we are committed to it.
As an international insurer, diversity and inclusion
are no doubt important areas of focus. How do you
ensure these are reflected and embraced at all levels
across the business, and at the interface with your
customers?
One of the exciting things about running a global business
is when you talk about diversity – at QBE we get that
almost by virtue of who we are – it is really what the
business is trying to achieve. You need different cultures
and different thought processes and these also bring
innovation into the business. If everyone looks like me,
then we’re in trouble! That doesn’t reflect the world we
operate in, and that’s across every generation.
It was interesting for me moving to Australia as there is
a very strong gender agenda. Not that gender should be
about targets, that’s not always that helpful, but gender
targets have been in place for seven or eight years there.
In the banks the split will be 40% female – in our head
office in Sydney the split is 35%.
Because it has been an area of focus, you think about
the value you get from it. Our board meets around the
world – much like Brokerslink’s – and I get asked if it is
QBE is one of
thecompanies
best suited
to develop
new market
segments,
thanks to its
capacity for
innovation.
Enrique
Schoch
Filhet-Allard
MDS
Roger Potts (Bridge) with John Neal (QBE) and Paula Rios (MDS Group).

f u l l c o v e r
17
We went down that road a little bit but recognised that
we needed to be careful. We now have a broad‑based
discussion around talent. By doing so it falls into place,
naturally. To reflect this our group executive used to
be our diversity and inclusion counsel but they are not
anymore, they are our talent counsel.
What key attributes and capabilities will future
insurance leaders need to have to succeed?
The first thing Iwant tosee in future leadersisauthenticity.
Iwant tosee a realperson and sense that it isreallythem,
the person you are going tosee consistentlyeachday.Next,
theyneedtobe smart; that doesn’t mean theyhavetoahave
a PHDor similar but, that there’sjust an interest,something
that showsthere are likelytotackle a problemdifferently.
They need a lot of energy and should be inclusive;
whenever they have an idea or a thought their immediate
next step is to share; if you put an idea on the table and
develop it, it does come through.
The ability to care is so important. When we look at
our staff engagement surveys two things matter; does the
company’s vision resonate and do people actually believe
in it? And do you care? If you get those things right in any
organisation, then your workforce is in great shape and
you interface with your customer will be better.
QBE expects our leaders to adapt; to have the capability
to adapt. For example, I certainly feel that where we have
been able to persuade and support leaders to work in
different geographies and cultures they become more
thoughtful and considerate, and a lot more open‑minded
as a result. There are clever ways to achieve this and I
admit we used to be unsophisticated in the way we did it.
Before we might have said “This opportunity has come up
in Singapore you’ve got to go there.” What you might come
back to if you go, we don’t know, go and see what you come
back to. Now we can do assignments of six weeks, three
months, one year or even two years. It’s a great opportunity
and the experience coming out of that is valuable.
How do you see the dramatic changes we have
experienced in the political, social and technology
landscapes impact on global insurers and brokers
over the next few years?
I think you have got an interesting voice coming through
in the world. Whether it is Brexit, or President Trump in
the US, or what we have seen in Italy and are about to see
in Germany and probably in France as well, politicians
have got to listen and try to understand those concerns.
I think there is a chance for us (the insurance industry)
to be part of that voice.
A little known fact, I think, is that the total money that
life and non‑life insurance companies control in the world
is the same size as the world’s pensions funds. So we
control a third of the world’s investment capability. I think
there is a macro responsibly on us as well to be socially
and not just economically aware, and just thinking a bit
more broadly on some of the bigger themes in the world
and what we can do to help.
diverse? While it may not reflect gender diversity as much
as we want (currently 25% of the board are women), we
have Americans, Australians, British, Hong Kong Chinese,
German and a Brazilian so if you doubt for one moment
that we are not getting a diversity of thinking coming
across the board table, then don’t.
But I think it is an interesting position around diversity
and the development of businesses. If you talk to our
Latin American business about diversity, they wonder
what on earth you are going on about, why you are even
talking about this? It’s just the way business is there.
I think it’s the younger businesses, who are more
diverse and inclusive by design. It’s the way they’re set up.
It is the older, more established businesses that are more
challenging.
In some ways, whilst we are preoccupied with trying
to think how we will deal with millennials at one end, we
should equally be thinking about how we maintain the
knowledge bank the older generations represent.
QBE has created a reverse mentoring programme, this
is where we pair a younger, junior employee, to act as a
mentor to share expertise with an older, senior colleague.
Of course, the two ends of the spectrum are connected.
There is certainly an opportunity for our industry here.
Another important factor to drive diversity is to think
about talent development in a holistic basis; if you think
smartly around talent then you will create diversity.
Unfortunately, if you just think of diversity in number
terms it becomes a bit awkward and the business just
doesn’t feel comfortable.
The Continental European market in
general is seeing a strong drive towards
product and client segmentation,
which means clarity on risk appetite, a
clear value proposition and an efficient
service offering are critical to success.
QBE is well positioned to take advantage
of the significant development
opportunity that Continental Europe
presents and is looking to develop a
strong focus in various niches areas
in Construction, Life Sciences, Cyber
and Real Estate.
Chris Wallace
Director of Continental Europe for
QBE Insurance Group

18
That works both ways. It’s for us to engage with
government perhaps more effectively that we have done
in the past and vice versa for governments to engage with
us. To me what helps in that respect is the more unified
we are – thinking of Brokerslink – the more complete you
can present yourself then the more likely you are to be
listened to.
QBE sees the world as more global in terms of how
customers behave. We might have a debate about
what is going on in the world around globalisation and
immigration but that’s a whole different debate. At the
customer level the ability to be able to say “yes, we can
service your needs” is really quite important.
Broker models are also changing. One example is
Brokerslink’s transformation from a network of
independent brokers into a truly global broking
business. Can this model successfully challenge
the traditional international broker structures?
Ultimately, I think, as the two largest brokers have got
more powerful it has created more opportunity for all
the other brokers. They have fire power and capabilities
to invest in technology and analytics and do what they
do very well but that provides space for the others, who
can personalise the way they do business with the client
and get to know them that much better. We can get to
know a selective number of markets better and create the
connection more strongly and with greater confidence.
I think that’s the opportunity that’s there.
To me, Brokerslink becoming a global broking
company is the opportunity. There is a massive
bank of clients that want to be looked at and treated
individually, that want to have a real connection with
the broking firm they select to partner and feel as if
they can have a greater degree of intimacy with the
market, more personal, and that their business is
being considered individual. Brokerslink can join up
a capability globally so can do everything anybody
asks for with a greater personal connection, you’ve got
an advantage. And actually that to us as underwriters
makes a difference. If we feel that a broker has a genuine
understanding of the client they’re representing then
we will price the risk accordingly.
The ‘piece of paper’ doesn’t tell you about the client,
the numbers don’t tell you about the client – that is
lagging data, it’s not leading data. So what Brokerslink can
provide, with their more intimate knowledge of the client,
is leading data. If underwriting is all about maths then we
will lose money because the market generally prices at
a lower level and everybody cuts the price. I can tell you
what the technical pricing for a risk is and you never quite
get there. It really is about understanding the client and
the best we can do that, and the way we have chosen to do
that, is through the broker. I think Brokerslink’s ability to
do that more intimately than a larger broker because they
have to do things a certain way, is important to us. If you
then join that with the global capabilities it puts you in a
very different space.
Disruptiontakesmanyformsanditspotentialimpact
ontheinsuranceindustryiswell‑documented. How
do you see disruption – a threat or an opportunity?
I think it is important for us to embrace the disruptors
and work with them. Ultimately, we have the clout
and the capability in the market place, and they
bring a different way of thinking and probably new
technologies, so if we partner with disruptors rather
than feel intimidated by them, there is an opportunity,
and that’s certainly what we are doing at QBE. In fact,
we are about to have our first ‘hack‑a‑thon’ to work out
how and where we will invest our money in terms of
supporting disruptors. For me, it’s about where they are
channelling distribution and how they might distribute
products differently.
There is some smart work taking place in the retail
space, around being able to provide insurance almost
without asking a question. QBE is working with a US
partner to consider if we can actually provide business
insurance on this basis, and we think we can. If you take
a photograph of the premises you want to insure, let’s say
it’s a shop. The photograph instantly has a GPS (Global
Positioning System) code so you know exactly where the
property is located. You can access civic data; see the
property’s construction, its size and space. You can then
go into their website to see the types of products they sell,
you can access their filed financial accounts, go into any
Dun & Bradstreet data.
When you look at all this data it is probably 50% to
60% more information than we could gather by asking
questions. So there is definitely a different way to go
about insurance.
I have always had a bit of a ‘bee in my bonnet’ around
an annual insurance contract. I think the one thing
that should never happen is issuing annual insurance
contracts, even for a business. Businesses might want
to deal with their insurances in line with revenue
cycles, so why not? They may want to make the contract
continuous. There are plenty of places in the world, where
we do some of the most complex construction contracts
taking place today, and they’ll run for 15 years without
batting an eyelid. We insure Crossrail in the UK (one of
Europe’s largest railway and infrastructure construction
projects) and have done so since 2005. The project
completes in 2017 with the link under London. We’ve
insured the third runway at Hong Kong, 4th
extension
at Chengi airport in Singapore. But we won’t insure
someone’s home for more than a year; what’s that all
about?
If you are a bank customer, then you either want to pay
for your insurance in line with your pay cycle so it may be
monthly or fortnightly. Or if you want to borrow money
to buy a car and the loan is for four years then you insure
the car for four years. So you have to stand back and think,
why not any insurance?
So in some ways the disruptors are like a variation
on diversity in the workforce, they are just forcing you
to think differently which, ultimately, is a good thing.

f u l l c o v e r
19
The evolution of Cooper Gay into Ed has attracted
a lot of attention. Alongside the new brand, Steve
Hearn, Ed’s CEO, has said the firm is redefining
broking and building the broker of the future.
A bold claim but is this a realistic proposition?
I think what Steve Hearn has done, quite smartly, is create
noise around Ed which is ultimately what the objective
was. You have to create the noise if you want to “shake the
tree”.
In a way it has surprised me that the wholesale
broking model has survived for as long as it has
unchanged. I was predicting the end of it in the 1980’s
but it is still going strong now. But I do think wholesale
needs to be reinvented. It is self‑evident to me that
there is value in a “brokers’ broker” with access to
a range of markets and a broader understanding
of opportunity, this is clearly adding value. This is
essentially what they have done in the past but it now
has got to be done more efficiently. That is what Steve
and Ed are doing.
The Lloyd’s market is a wholesale, subscription,
sharing market. When we talk about Uber and AirBnB
as the sharing economy, Lloyd’s should be on that list,
and it has been around doing it for over 300 years. It’s
kind of not a new idea. Lloyd’s, like any business, has to
continue to reinvent itself, to create greater efficiency in
the operating model. That’s the challenge for us. Some of
these challenges have been forced on us. Regulation, for
example, has added a degree of complexity and cost to
the business. Some is necessary, but some is completely
spurious.
We have got to find a way to take some of the frictional
cost out of how we do business. That’s ultimately our
disruption risk. Someone will come in and say “I spend
a dollar, and you guys take 35 cents out of it between the
two of you, and I’m not happy with that”. That’s the issue
we have to solve. Which is what, I think Steve, is sat in the
middle of.
QBE’s vision is to be the insurer that builds the
strongest partnerships with customers. How does
that manifest itself in the day to day activities of the
business?
The most important point for me is the customer point
of view, and that starts with the broker, we have to listen.
It is not for us to define our products and just put them
on the table. We have to be prepared to adapt our products
to meet the changing dynamics of the market.
I’ve talked earlier about how we lead the client/
broker conversation reflecting what is most important
to them. Another example would be in London where
we underwrite roughly 50% on Lloyd’s paper and 50%
on QBE’s. We are completely agnostic about these
markets. Our view, and the way we run the business, is our
underwriters are dual accredited to write on both and
we allocate the same capital and same cost irrespective
of what paper is used. What we might use on a risk will
be completely led by the customer.
Employee volunteers from QBE North America participate in home builds to provide
low income and impoverished families with the opportunity to become homeowners.

20
In one of your tweets you say every organization
needs to understand and communicate its purpose
and why it exists – how would you define QBE’s
purpose?
The only two things I think that differentiate insurers
and brokers are what our customers think and say about
us and what our people do; that ultimately is what will
differentiate us from the pack.
When you think about renewal you want to begin that
process almost the day after you’ve renewed the policy –
reviewing what went well, what didn’t go well? If you want
to connect with the customer you work across the area
that didn’t go quite so well, then that next renewal will
be fine. To me it’s really just getting the intimacy with
the customer.
Onthepeoplefront,itisjustmakingsuretheyare
equippedtohavethatkindofconversation.Ontheone
handtheyhavetohavethetechnicalcapabilitytodothejob
youareaskingthemtodo.Ontheotherthey’vegottohave
customerintimacycapability.Ifwedon’tputthecustomerat
thecentreofourvision,thenweareinabitoftrouble.
The QBE business lights up when you talk about the
customer. People say that’s what we are here to do.
Community support and sports sponsorship are
part of QBE’s DNA. Why are initiatives such as
Premiums4Good (where 25% of insurance premiums
go towards social investments) so important to the
business?
Premiums4Good (P4G) came out of one of our leadership
forums. We had a Dragons’ Den type assessment of ideas
and three came through of which P4G was one. At the
time it was called “Policy with a Heart”.
Essentially, what we say to someone who buys
insurance with us is that we will invest 25% of the
premium into socially responsible investment strategies.
We invest directly into projects which deliver benefit
to communities and the environment, rather than into
general ethical or environmental funds. That could
be social impact bonds, green bonds or bonds behind
renewal energy and infrastructure.
The process is very transparent and we provide the
customer with annual update on the investments so
they gain an understanding around the projects being
The only two things I think
that differentiate insurers
and brokers are what our
customers think and say
about us and what our
people do.
QBE employees participate in a local school refurbishment programme
in Manila, Philippines.

f u l l c o v e r
21
Howdoyouunwindandrelaxafteradayattheoffice?
It is the simple things in life that make a difference to me;
good food, good wine, good conversation. I think having
a broad base of friends makes all the difference. They
enable you to get outside of your own world.
So a decent set of friends sat around the table with a
good meal and glass of Douro, and the world’s a different
place. That to me, is the best way to relax.
Mygreatfriendshavenothingtodowithinsurance.You
arewhoyouarewithyourfriends;youarenotanametag,
andthatisimportant.Lifebringsitsownchallenges,you
havetobecarefulaseveryonehassomethinggoingonin
theirlivesatsometime.It’sbeingcontent,beingyouwith
yourfriendsthatmakesthedifference.
FULLCOVER understands you have a close personal
affinity with Portugal. Can you tell us more about
your relationship with and interest in the country,
its people, culture and its food and wine?
I do. My favourite place is in the Algarve.
It all started when we went with some neighbours of
ours in UK who used to visit there a lot. We just thought,
this place is perfect. I think the Algarve has more days of
sunshine than anywhere else in the world. You have the
sea, you can play golf, and it’s very easy.
I have had a place in Quinta do Lago for 10 years and try
to visit there three times a year.
The Algarve is where I feel most relaxed. It is just
somewhere I’ve liked for a long while. It ticks all the boxes
for me ‑ a wonderful climate and incredible people. I think
the Portuguese are just outstanding. They are welcoming
and easy to deal with. The food and wine are just brilliant.
Wherever I am, I will always look out for Portuguese wine,
a red, a decent Douro, on any wine list.
Ienjoythe opportunitythat myrole createstoexperience
different placesand culturesthat you wouldn’totherwise
see. [John spendsat least half histime eachyeartravelling
acrossthe globe]. However, Ithink a legacyoftravellinghas
meant the thought of going on a plane toexploresomedeep
jungle or suchlike in myown time, just doesn’tappeal.Iget
accusedof being veryboring but Iwouldratherrockupin
Portugalwhere Iknow what toexpect and canrelax.
IfthereisanyregretitismyPortuguese. Itisfrankly
rubbishwhichIknowisacardinalsin.•
supported and can use the data in their own corporate
social responsibility performance reporting. P4G
resonates really well with some business sectors, for
example, consulting and professional firms. It is also great
for our own people, providing a real sense of respecting
the communities in which we operate.
In 2011, we established our own global foundation.
As well as in the Group, it operates in each of the divisions;
Europe, North America, Australia and emerging markets.
We put between 0.5 and 0.6% of our profits each year
in the foundation, so about AUS$5m to AUS$6m.
The total fund is divided between the divisions.
Each division has employee‑run counsel to decide
how to allocate the funds. Although they were working
autonomously, interestingly, each division has ended
up with the same approach. They have each chosen
a main charity they want to support for the year with
the remainder getting distributed across a plethora of
organisations. In total, across the year, we support about
300 charities.
You have to be careful as the CEO that you don’t over
engineer these kinds of opportunities. They have to be
led by the people in the business. It is about allowing
your people to do what matters to them. I think this
approach is a lot more valuable for our employees and the
communities they operate in as opposed to supporting
just one charity.
What have been the professional and personal
highlights during your 13 years at QBE?
If I have to choose, firstly, what we have been able to
achieve with the UK and European business. We have
pulled together a disparate set of businesses across these
territories, unified them under one brand and really
present a strong value proposition.
The second has been going through the thoughtful
process of re‑establishing QBE as truly on a global map.
That has been exciting to do.
Third is around talent. Setting up our own leadership
academy, developing our own underwriting academy
has been great. I really feel as if, in this respect, we are
investing in the industry and not just in QBE.
The QBE business lights
up when you talk about the
customer. People say that’s
what we are here to do.

22
QBE Insurance Group was founded
in 1886 by two young Scotsmen,
James Burns and Robert Philp.
The growth of QBE, nationally and
internationally, is the story of an
institution that for more than 127
years has played a significant part
in Australian commercial history.
Nowadays, QBE is one of the
world’s top 20 general insurance
and reinsurance companies, with
operations in all the key insurance
markets, growing its gross written
premium from $1 billion in 1994 to
more than $14 billion in 2016.
They are present in 37 countries
and headquartered in Sydney.
Gross written premium and net
earned premium (US$M)
Gross earned premium by class of business
14,395
15,092
2016
2015
11,066
12,314
Gross written premium
Net earned premium
2016 2015
5%
10%
Operational Highlights
37
Countries
269
Offices Globally
14,226
Overall Workforce
53% Female — 47% Male
28%
Women in
Management
1% more than 2015
worldwide
Commercial
& domestic property
31.4 31.0
Motor & Motor casualty 18.3 17.7
Agriculture 10.8 10.8
Public/product liability 10.1 10.7
Workers compensation 7.4 8.3
Professional indemnity 6.3 5.6
Marine energy & Aviation 6.3 6.6
Accident & Health 4.6 4.0
Financial & Credit 4.0 4.1
Other 0.8 1.3Source: QBE Annual Report 2016 & Annual Review 2016

23
f u l l c o v e r
Australia & New Zealand
A diversified general insurer providing cover for
commercial and personal risks. The strong customer
focus, disciplined underwriting and strong capital base
assists consumers and business to mitigate and manage
risk while delivering strong and stable returns.
North America
North American Operations is a specialist insurer and
reinsurer with a full scope of commercial, personal and
specialty lines capabilities and a focus on delivering
a comprehensive suite of products through a targeted
distribution model.
Emerging Markets
This division has a meaningful footprint with leading
positions across many of the world’s most attractive
emerging markets. With its customer base, distribution
partners and product range, it is uniquely positioned to
continue to deliver profitable growth over the long-term.
Gross written premium Gross written premium Gross written premium
Combined operating ratio Combined operating ratio Combined operating ratio
Net earned premium 1
Insurance profit margin Insurance profit margin Insurance profit margin
Europe
European Operations’ business units are aligned by
geography and/or distribution characteristics. Retail
distributes commercial and specialty products in the
UK and continental Europe. International Markets is a
global specialty business using the Lloyd’s platform (and
includes Canada) and QBE Re is a global reinsurance
business.
Equator Re
Equator Re, as part of the broader Global Reinsurance
Operations team, is instrumental in managing the
Group’s exposure and reinsurance risk appetites. In
doing so, Equator Re works closely with divisions to
bridge the gap between their risk appetites and that of
the Group.
Bermuda
Markets at a glance
US$ million
4,647
2%
from 20152
US$ million
3,318
1%
from 20152
US$ million
4,076
7%
from 20154
US$ million
3,115
10%
from 20155
US$ million
1,632
6%
from 20157
US$ million
1,328
8%
from 20158
97.8%1 99.2%
in 2015 4.7%1 2.5%
in 2015 93.6%3 89.1%
in 2015 10.1%3 13.4%
in 2015 99.5%
99.2%
in 2015 5.5%
4.9%
in 2015
Gross written premium6
¹ Adjusted for transactions to reinsure run-off liabilities.
² Prior period comparable figures exclude premium associated
with the sale of M&LS in 2015.
³ Adjusted for transactions to reinsure UK long-tail liabilities.
4
Down 3% on a constant currency basis.
5
Down 6% on a constant currency basis.
6
Adjusted for North American Operations
loss portfolio transfer transaction.
7
Up 10% on a constant currency basis.
8
9
Combined operating ratio
Insurance profit margin
US$ million
1,349
34%
from 2015
US$ million
468
28%
from 2015
70.7%6 89.0%
in 2015 35.0%6 28.1%
in 2015
Gross written premium
Combined operating ratio
Net earned premium
Insurance profit margin
US$ million
3,933
4%
from 20159
US$ million
3,410
4%
from 20159
92.7%
91.3%
in 2015 12.3%
14.2%
in 2015

IllustrationbyTiagoGalo

f u l l c o v e r
27
Fragmentation
First, Fragmentation. In the aftermath
of the Second World War there was a
general trend towards international
frameworks followed by an exuberant
rush to globalisation after the end of the
Cold War.
Old geo‑political rivalries gave way and
entire new markets became available for
development, investment, production
and consumption, resulting in bilateral
and multilateral trade, political and
monetary frameworks.
However, we are now witnessing a
rising tide of populism. This has been
simmering for a long while, before coming
into the mainstream and triumphing in
electoral politics.
The election of the improbable Donald
Trump as America’s 45th
President is
perhaps the most prominent indication
that populism and the creep of the
political margins towards the centre is
now in unabashed full gallop.
Trump has committed himself to
building a ‘wall’ along the US‑Mexico
border, renegotiating NAFTA and
disavowed the Trans‑Pacific Partnership
(TPP). He has expressed scepticism about
NATO and indicated a disinterest in the
historical security guarantees given to
Japan, Taiwan and South Korea.
The populist wave whichhasbrought
Trumptothe Presidencyhasgiven resolve
tosimilar movementsin Western Europe.
These maylead topoliticalsuccessfor
thefar right in France, the Netherlands,
GermanyandItalyin 2017. Democracies
willonce again elect itsown greatest cynics.
Calibration
Second, Calibration. South East Asian
nations in particular, but governments
more broadly, are reassessing their long
held political and economic assumptions
about frameworks, systems and
relationships. Donald Trump is a game
changer, and the ripple effects are likely to
be more tsunamic than gentle.
2017 is likely to be characterised
by a growing ambiguity over global
leadership. Who really is leading the
world? How do we think about the future
of American leadership that will likely
be more transactional than strategic
under Trump? Where can economies
– particularly those that are heavily
external trade dependent ‑ find sources
of demand that are relatively tariff free
and accessible to fuel that future growth?
Where will smaller nations, particularly
in Asia and Africa find a security partner
that is reliable, predictable and capable?
The answer, vigorously self‑promoted, is
China. China is pointing to developments
in the West– promoted as erratic,
unreliable, anti‑free trade and militaristic
– as a sign that countries need to find a
more stable, predictable, pro‑trade and
reliable ‘big brother’.
China’s characterisation of itself is
best thought of in terms of its historical
personaofabenevolenttribute‑demanding
‘Centre’. Those who position themselves
as tribute nations will benefit while those
which choose to resist or to challenge will
feel the full pressure of its displeasure.
2016 was a year of surprises. Several political and
economic constants have shifted fundamentally.
shades of grey:
Macro Outlook 2017
BY DEVADAS KRISHNADAS
…we are now witnessing a
rising tide of populism. This
has been simmering for a long
while, before coming into the
mainstream and triumphing
in electoral politics.
DEVADAS KRISHNADAS

28
Countries do not make strategic
realignments lightly. Trump’s reign is
likely to be the tipping point towards a
recalibration of longer term strategic
geometries with the compass spinning
from West to East.
With the future of the TPP in question,
the Chinese can be expected to fill the
vacuum with support for the Regional
Comprehensive Economic Partnership or
RCEP. This is an Association of Southeast
Asian Nations (ASEAN) wide FTA with
Australia, China, India and South Korea.
The Chinese will also use its
strengthening economic and military ties
with its contiguous countries– Myanmar,
Laos, Cambodia and Vietnam – to shift
the reference point for ASEAN’s direction
from consensus to compliance.
The Asian Infrastructure Investment
Bank (AIIB), the Silk Road Fund and
the One Road, One Belt strategies
are practical, tangible and sizable
commitments China has made to the
future of greater Asia on the land side.
Its assertion of maritime dominion in
the South China Sea through its island
bases and self‑declared Air Identification
Zone – are more problematic.
Confrontation
This raises the third structural shift –
Confrontation and with it the rising
danger of miscalculation. With so many
long‑term stable features of the geo
‑political and geo‑economic frameworks
now in flux, there is the danger of not only
wrong calls but also rapid escalation.
The United States continued efforts
to ensure freedom of navigation in
the South China Sea, especially in the
context of an erratic and sensitive new
President, sets up a tinderbox scenario
where an operational situation such
as the 2001 Hainan Island incident
can rapidly escalate into a wider
confrontation.
The benign statements by Trump
on and about President Putin have
also alarmed Western Europe. The EU
convened an unprecedented Foreign
Minister’s meeting following the
November 8th
US Presidential election
specifically to discuss the implications on
Western Europe of a Trump presidency.
Shades of Grey
Fragmentation, Calibration and
Confrontation. These shifts are likely to
be enduring critical uncertainties which
will force governments and transnational
corporations to relook at their exposure to
risks but to also search for opportunities.
These uncertainties are notable in being
about fundamental and core issues long
held to be stable – Global leadership, geo
‑political frameworks and globalisation.
Where there had been more of a black and
white picture for several decades there are
now varying shades of grey.
For ASEAN nations those opportunities
are to be found in finding ways to
strengthen their linkages with China.
The rewards they can expect, like the
penalties, will be tangible and practical.
The benefits will also be unencumbered
by ‘linkages’ to thorny issues such as
insistence on ensuring human rights,
reducing corruption or guaranteeing
political freedom as has been the case
vis‑à‑vis the United States.
2017 is likely to be
characterised by a
growing ambiguity
over global
leadership.
Fragmentation,
Calibration and
Confrontation. These
shifts are likely to
be enduring critical
uncertainties which
will force governments
and transnational
corporations to relook
at their exposure to
risks but to also search
for opportunities.
FMG – FUTURE‑MOVES GROUP PTE. LTD
→ Headquartered in Singapore, Future‑Moves
Group has an international consulting practice
and executive education service spanning both
the private and public sectors. FMG provides
expertise and bespoke services in corporate
strategy, strategic planning, risk advisory, data
analysis and public policy.
→ FMG is also Southeast Asia’s first consultancy
to develop and deploy its own foresight‑driven
strategic management tool – FUSE: Foresight
‑driven,Understanding,StrategyandExecution®
– an essential framework thatprepares
organisationstotaketheinitiativefortheirfutures.
For more information, please visit
www.future‑moves.com.

f u l l c o v e r
29
The China Play
However, this is not to suggest that China
will have it all its way.
The leadership of President Xi Jinping
appears to be evolving to a departure
from the 10 year rule norm. He may well
be positioning himself to be a perpetual
leader now that he has consecrated
himself as a so called ‘Core Leader’. We
can expect to see high level political
chess moves in 2017 as Xi continues to
consolidate his authority.
The Chinese financial sector has
considerable opaqueness and its
relationship to the investment‑led model
of growth increases its exposure to
systemic risk as the economy continues
to decelerate. The housing overhang in
secondary cities could be a trigger for a
deflation of the asset bubble that is the
wider Chinese property market.
In their growing boldness in their
assertion of sovereignty and what they see
as their correct place at the world table,
the Chinese may overreach by moving
too aggressively. For many nations the
dangers of American withdrawal have to
be balanced against the risks of triggering
an overreaction by the US to provocative
Chinese moves.
These macro risks are likely to be
masked by the performance of the US
equity markets and to a lesser extent its
real economy, which has been recovering
through the 8 year period of the Obama
administration. The stock markets are
likely to view a Republican administration
as a net positive for the economy
and are pricing in expectations that
Trump will deregulate aggressively and
swiftly. In particular, the financial and
mining sectors are poised to see market
confidence in their prospects zoom if
Dodd‑Frank is rescinded and the climate
management related limits on mining
lifted.
Expectations that Trump will launch,
a deficit‑driven, expansive fiscal policy
concentrated on infrastructure will
boost business sentiment. The multiplier
effect from infrastructure investment –
if productive and not pork barrelled –
could be significant.
While there is unease over the details
on how Trump will ‘put America first’ by
discouraging American companies from
outsourcing, the potential long‑term
costs to competitiveness and public
revenues will be obscured by the short
‑term euphoria that he is reconstituting
American manufacturing, thereby
‘saving jobs’ and ‘Making America Great
Again’.
Reshaping Landscapes
The outlook for 2017 is thus one of strategic
shifts that will coincide to reshape the
geo‑political and economic landscapes for
the longer term. These shifts, will elevate
uncertainty and increase risks.
Governments everywhere are operating
with the expectation of crisis, finding
themselves forced to rethink fundamental
positions and long‑held relationships.
Shades of Grey shattered by the
occasional burst of white lighting of crisis
will continue to colour the world view for
the near future. •
DEVADAS KRISHNADAS
Chief Executive Officer,
Future‑Moves Group Pte. Ltd.
→ DevadasistheFounderandCEO
ofFuture‑MovesGroupPte.Ltd(FMG),
a strategic management consulting
firm. He is also an Independent
Director of the reinsurance firm
PartnerRe Asia Pte. Ltd. and the
direct insurer, Auto & General
Insurance Singapore Pte. Ltd.
→ Prior to founding FMG, Devadas
spent over 15 years in the Singapore
Government, playing a key role in
developing Singapore’s security,
fiscal and social policies.
→ Devadas is also a recognised
public intellectual and author. His
latest book, The Seduction of the
Simple, an anthology of his public
commentaries, was released in 2016.
The outlook for 2017
is thus one of strategic
shifts that will coincide to
reshape the geo‑political
and economic landscapes
for the longer term.
These shifts, will elevate
uncertainty and increase
risks.
DEVADAS KRISHNADAS

v
Porto is just a certain way of taking shelter in the afternoon,
of sheathing myself in silence and trying to bring to the surface
a few words, with no other purpose than to oppose the thick
body of these walls with the rebellion of my gaze.
Porto is just this attention fixed on listening to the footsteps
of the old, who at certain hours cross the street in order to
pass their days in the café over there, eyes empty, all the tears
of the children of St. Vitor flowing in the furrows of their
melancholy.
Porto is just the little square where for so many years I have
been learning methodically to be a tree, approaching in this
way, more and more, the morning rustle of the sparrows,
those rascals who, however much they flutter away, come
always back into my life again
On poor terms with the city, I look at the vestiges of youth
in the palm of my hand, and of that unruled passion I will
let a single petal, for its whiteness, float to rest.
Eugénio de Andrade – in The Slopes of the Gaze (ed. Focus 1992)
Porto

One of Porto’s most iconic elements is its
trams which have been rolling through the
city since 1895. For decades, the main tram
shed and workshop for the public system
was located in the Boavista roundabout.
The site was redeveloped at the beginning
of the 21st
century and in its place is one
of the most emblematic buildings in
Porto, the Casa da Música (literally The
House of Music). Inaugurated in 2005
with a concert by Lou Reed, the structure
was conceived by Dutch architect Rem
Koolhaas and its construction presented
many new engineering challenges. The
New York Times described the Casa da
Música as “one of the most important
show theaters built over the last 100
years”. Coincidentally, José Manuel
Fonseca, MDS’s Group Chief Executive,
was President of Casa da Música from its
foundation until 2014. •
Casa da
Música
Casa da Música, ©Matilde Ramos
Porto has never faltered in stressing its main vocation
as a merchant centre and port (as perpetuated in its
name). First established in the Bronze Age, over 2,500
years ago, on a strategic hill above the estuary of one of
the greatest rivers of the Iberian Peninsula, the city grew
considerably during the Roman period (when it was first
named “portus”). By the end of the Middle Ages, Porto
had experienced new and important urban developments
responding to the increasingly dynamic and pioneering
spirit of its merchants – which would lead to the maritime
expansion that the Portuguese would be recognised for
from the 15th
century on. The people’s entrepreneurial
and nonconformist characteristics, forever marking
the spirit and identity of the city, were fundamental by
the 19th century for the establishment of liberalism,
for a new industrial period and, later, for the triumph
of the republican regime. The old Penaventosa hill,
crowned by the medieval cathedral, has witnessed all this
development and, since 1996, has been a UNESCO World
Heritage site. •
Eugénio
de Andrade
The city of Porto
The birthplace of MDS
One of the most important names in 20th
century
Portuguese culture, while not born in Porto, is irrefutably,
its greatest poet, Eugénio de Andrade (1923‑2005) came to
live in the city in 1950 and immediately fell in love with it
and would spend the rest of his life in, what he described
as “the little town square where, for so many years, I have
been methodically learning to be a tree”. The poet would
dedicate many of the pages and verses that he wrote to
the scenarios and landscapes of the borough, to Porto’s
people, its identity and to the friends he made there. He
also bequeathed the city one of the most beautiful books
about Porto, the “Daqui houve nome Portugal”. •
33

Belmiro
deAzevedo
São João (Saint John's)
Festivities
Although “Our Lady of Vandoma” (whose medieval image
can be found inside Porto’s cathedral) is the city’s patroness,
the most popular saint in Porto is Saint John Baptist.
Celebrated on the 24th
of June, his festivities were already
deeply embedded in Porto by the 14th
century. Fernão Lopes,
a chronicler who wrote the history of Portugal, described the
pagan roots of these celebrations held in the summer solstice.
Saint John’s festivities bring hundreds of thousands of people
on to the streets, mixing traditional gastronomy with music,
dancing, campfire jumping, fireworks, processions and
“scent exchanges” between people who carry leeks, aromatic
herbs and basil flowers. The National Geographic magazine
considers this one of the world’s most unmissable events. •
Whilst a secret since the Middle Ages, it
took the interest of British merchants in
the 17th
century, for it to become famous
worldwide. Port wine is impossible to copy
anywhere else on the planet. Produced
over 200 kms away from Porto, in the
vineyards of the Douro cliffs – an ancient
and regulated demarcated wine region –
Port is transported and aged on the estuary
of the city’s great river, in the cellars that
have turned that area into a UNESCO World
Heritage site. Port is the best of two worlds:
a very sweet nectar and, simultaneously,
a high alcohol content. It is also the origin
of some of the best wine ever: bottles of
Taylor and Fonseca vintage from 1994 were
awarded a prestigious 100 points from Wine
Spectator magazine. •
Born in Marco de Canaveses near Porto, in 1938, Belmiro de Azevedo is one of
Portugal’s most successful businessmen. A chemical engineering graduate,
he assumed control of Sonae in 1974 and the year after, specialised in business
management at Harvard University. His rare entrepreneurial capacities, his
pioneering vision and the culture he implemented at Sonae, transformed the
group, growing from its Porto base into one of the most dynamic companies
internationally. Sonae is a multinational company managing a diversified
portfolio of businesses in retail, financial services, technology, shopping centres
and telecommunications. He is one of the most respected people in Portugal,
recognised for his boldness and spirit, non‑conformity and relentless defense
of his values, strongly represented in the group he created. He was also linked
to several international organisations and received praise for his work in several
countries, such as Spain and Brazil. •
Written by Joel Cleto
Joel Cleto was born in Porto in 1965.
With a degree in history and Master
of Archeology from the University
of Porto, he is a college teacher of
Art and Heritage. He is an author
and host of the acclaimed TV show
“Caminhos da História” which airs
on the Porto Canal TV network.
Ângelo Paupério, Paulo Azevedo and Belmiro de Azevedo. ©Pedro Granadeiro
Port Wine
34

Casa de Chá
da Boa Nova
Built between 1958 and 1963 and just two
meters above the ocean in one of the rockiest
areas of greater Porto’s Atlantic coast, the Casa
de Chá da Boa Nova (literally the Tea House of
Boa Nova) is an architectural and gastronomic
delight. Architect Álvaro Siza completed the
building in 1963 and then over 50 years later,
transformed the space into a restaurant for
Portuguese chef Rui Paula, who recently (2016)
secured a Michelin star. •
Casa de Chá da Boa Nova. ©Nelson Garrido
Álvaro Siza
In 2005, Álvaro Siza, one of the most highly regarded architects of his
generation, was awarded the keys to the city of Porto. Born in 1933, in the
neighbouring coastal town of Matosinhos, Siza credits the area’s linear and
artless maritime landscape as the spirit of his creativity, although, he doesn’t
deny the influences of other architectural greats such as Adolf Loos, Alvar
Aalto and Frank Lloyd Wright. In a way, Siza synthesized these 20th
century
masters with a very personal language and appearance, which, since the
1960s, has firmly evolved into a worldwide reference. This was recognised
in 1992 with a Pritzker Architecture prize – considered the Nobel Prize of
architecture – and in 2009 when he was presented with the Royal Gold
Medal for Architecture by Queen Elizabeth II. •
Eduardo
Souto Moura
Manoel de Oliveira
Continuing the architectural theme, another Pritzker prize
winner with close links to Porto was honoured in 2011. Eduardo
de Souto Moura, born in the city in 1952, became only the
second winner to receive their Laureate from a serving US
President. Barack Obama described Souto Moura as someone
who “is never satisfied with easy solutions”. The architect of the
Municipal Stadium of Braga and Casa da Histórias Paula Rego
in Portugal and projects all over the world, Souto Moura was
responsible for the rehabilitation of emblematic and historical
buildings in Porto such as the Prison of Relação (Cadeia da
Relação) and The New Customs building (Alfândega Nova) and
the city’s award‑winning subway stations. •
WhenManoeldeOliveirapassedawayin2015at106yearsofage,
thecountrytookthenewswithdifficulty.Thefilmmakerand
directorwhowasborninPortoin1908,hadcometobeviewed
asanimmortalfigurebythePortuguese. Heremainstheoldest
directorinhistory,withthelongestcareerincinema.Hestarted
outasanextraatInvictaFilm,apioneerofPortuguesesilent
movies.Hisfirstmovie–“DouroFainaFluvial”(1931)–wasa
silentfilmbuthethenlivedthroughthehistoryof20th
century
ofanaloguecinema,directingessentialworkssuchas“Aniki
‑Bóbó”(1942),“AmordePerdição”(1979),“Francisca”(1981)and
“ValeAbraão”(1993).Hedirected32featurefilms,hislastonewas
in2014.AwardedtheGoldenLionoftheVeniceFilmFestival,
ManoeldeOliveiradirectedinternationallyrenownedactorssuch
asMarceloMastroianni,JohnMalkovichorCatherineDeneuve.•
Architect Álvaro Siza. ©Arquivo Siza Vieira
35

38
Solvency II, Pillar 3 regulatory reporting
requirements came into force on 1st
January 2016. As a result, in addition
to the Quantitative Reporting Template
(QRTs), firms must produce two key
narrative reports; a Solvency & Financial
Condition Report (SFCR) – disclosed
publically on an annual basis – and a
Regulatory Supervisory Report (RSR) –
disclosed privately in full to a supervisory
body every three years and as a summary
once a year.
Antoine Bourdais, director of banking
andinsuranceatsoftwaresolution
providerInvoke,discusseshowto
masterPillar3reporting,explaining
the challengesandwhybusinesses
mustfuture‑proof their processes.
Mastering
Pillar 3
reporting
Insurer
Challenges
BY ANTOINE BOURDAIS

f u l l c o v e r
39
Looking back at 2016, what main challenges did
insurers face with Pillar 3 reporting?
After years of preparation, the Solvency II regime brought
the European Union (EU) insurance market the most
complete reporting package the industry has ever known.
Based on the experience of the 2015 preparatory phase,
insurers appeared ready to face the first challenges of
Pillar 3 reporting. The main issue, however, came at the
end of 2016 when the regulation required the submission
of annual 2016 data reports.
The first day one and quarterly submissions under
Solvency II were made in May 2016. While the latter were
pretty close to what insurers experienced during the
2015 preparatory phase reporting exercise, the challenge
was to be fully prepared for the first annual Solvency II
submissions based on December 2016 data.
For clients, one of the key factors of success was to not
underestimate the workload required for this first annual
report.Partofthechallengewastoefficientlyre‑organisethe
company’s internal resources so they could cope with the
multi‑facetedburdenofPillar3reporting.Theyhadtonotonly
meetthe2016regulatoryrequirementsandpreparetheir2017
submission, but also anticipate any additions to regulation.
These included a number of main requirement updates
and additional reporting obligations, such as the National
Specific Templates (NST), mandatory in Ireland in 2016
and France in 2017.
While large companies created distinct teams dedicated
to tackling these issues, smaller entities faced a real
organisational challenge, delegating responsibility for
producing present reports and preparing for future ones
to the same person.
The next challenge for insurers is to further industrialize
their reporting production processes. Very few are 100%
ready to automate the production of the whole set of
expected reporting templates.
For clients, one of the key
factors of success was to not
underestimate the workload
required for this first annual
report. Part of the challenge
was to efficiently re‑organise
the company’s internal
resources so they could
cope with the multi‑faceted
burden of Pillar 3 reporting
ANTOINEBOURDAIS

40
ANTOINE BOURDAIS
→ Director of the Banking and Insurance
Division at Invoke – a European software
provider specializing in financial, tax and
regulatory reporting, Antoine Bourdais
participates in XBRL Europe and XBRL
International working groups dedicated
to regulated information.
→ Antoine graduated as a mathematical
engineer from the French engineering school
INSA and with an MBA. After several years
as a project manager in financial reporting at
Invoke, he was promoted product manager
for the Reporting & Consolidation software
range, reinforcing his collaboration with the
R&D department. Today he is responsible for
driving the Banking and Insurance division
overall product strategy.
In 2016 insurers had to report additional statistical data
(new reporting requirements of the ECB and FSB) some
of which could not be retrieved from existing Solvency II
material. The challenge therefore was gathering data for
Solvency II, enriching it with additional information and
making sure it’s of sufficient quality to form a report.
It’s important to bear in mind that the volume and
scope of requirements will continue to increase, rather
than decrease. The introduction of the additional
Financial Stability reporting templates by the European
Central Bank (ECB) is a typical example of this, and
Solvency II regulation will undoubtedly be subject to
further enhancements of this kind in the future.
We are currently leading projects among insurer clients
that are much more than just initiating the automation
of regulatory reports production. They use the Invoke
regulatory reporting platform further upstream in their
information systems as a regulatory data warehouse.
The Invoke platform enables them to collect, store
and process the necessary data to meet the initial EIOPA
Solvency II requirements, and the statistical data required
to meet the additional reporting requirements of the ECB
and the Financial Stability Board (FSB). Data is sourced
from a wide range of systems and held centrally in the
data warehouse. Software then undertakes cross‑system
data consistency checks and validates data quality.
Data quality is the hot topic, particularly as regulators
repeatedly communicated to the industry that, while
some progress had been made, the quality of the data
submitted was not sufficient. The goal is to move from
a pure reporting system to a comprehensive regulatory
platform to ensure data quality prior to report production.
What is the key to a successful Pillar 3 reporting
strategy?
No matter the company or the context, the target stays the
same: achieving full automation of Pillar 3 reporting. The
question is how to get there smoothly.
Insurers must have a clear assessment of their IT
system maturity. Only then will they be able to identify
which data is Solvency II ready and which is not mature
enough to be used for automatic report production.
For processes to evolve, relevant milestones have to be
defined. Some insurance companies have decided their
system is not Solvency II mature enough and prefer to use
a ‘tactical’ software solution for Solvency II reporting right
now. They prepare data manually and use software such
as Invoke ‘e‑Filing Insurance’, our cloud portal solution, to
transform the Excel data into the expected XBRL format.
More mature clients who use the Invoke’s ‘strategic’
regulatory reporting system manage and centralise all
of their data, which in turn enables them to not only
produce regulatory reports that meet Solvency II’s
quality criteria, but also satisfy their internal reporting
requirements. •
In 2016 insurers had to report additional
statistical data (new reporting
requirements of the ECB and FSB)
some of which could not be retrieved
from existing Solvency II material. The
challenge therefore was gathering
data for Solvency II, enriching it with
additional information and making sure
it’s of sufficient quality to form a report.

APOLLO GROUP
A major investor
in the portuguese
insurance market

Established in 1990 in the USA by a group
of experienced investors, Apollo manages
a portfolio of assets covering private
equity, credit and real estate. Apollo
is present in three continents – North
America, Europe and Asia – and has a
network of 15 offices.
The financial sector was, from the start,
apriorityinitsdevelopmentstrategyandits
firstinvestmentwasinaninsurer.Banking
andinsurancefeatureprominentlyinits
investmentportfolio;AtheneUSA,oneof
thebiggestfixedannuities(pensionplans)
insurers,iscurrentlythebiggestasset
managedbyApollo.
Even the tough economic conditions
of the last few years have not prevented
Apollo registering significant growth;
assets worth $160 billion were under
management in Q1 2015, by the end of
2016, it was $192 billion.
GustavoGuimarãesexplainshowthe
firmmanagestosustaincontinuedgrowth
anddeliverexceptionalresults:“Apollo
integratesallitsoperations,believingthis
isthekeydifferentiator.Itsinvestment
strategy,appliedsuccessfullyovertheyears,
enablesittoidentifygoodinvestment
opportunities,providecapitaltosupport
andcreateleadingcompaniesandadd
valueforinvestorsacrossseveralsectors”.
Gustavo also mentions Apollo’s
flexibility in how it approaches and
invests in various company set‑ups
and during differing market cycles,
evidences its strong market expertise.
f u l l c o v e r
43
Apollo Global Management is a leading worldwide asset manager.
The American private equity firm has a long history of raising,
investing and managing funds for some of the world’s most prominent
institutional (blue chip) and individual investors, including large‑scale
American pension funds and sovereign wealth funds.
In Portugal, Apollo has increased its investment in the insurance sector.
After investing in Tranquilidade in 2015, Açoreana Seguros followed
in 2016 and by the end of the year both were merged into a single
business under the Seguradoras Unidas umbrella. Tranquilidade
and Açoreana however were kept as commercial brands.
Gustavo M. Guimarães, President of the Board of Directors of
Seguradoras Unidas, speaks to FULLCOVER about the continued
growth of the Apollo Group and its investment strategy in Portugal.
apollo group
Gustavo M. Guimarães, President of the Board of Directors of Seguradoras Unidas.

44
A different approach
For Gustavo Guimarães, the Apollo Group
has a different approach to the investment
process: “It starts with the autonomy
it gives the management teams of
companies it invests in. Apollo believes in
a model that, while as shareholder it may
contribute with capital, knowledge and
better working practices, it also values
the independence of the companies’
management teams and local managers.
It is they who should define the strategy,
without conflict of interest, receiving
incentives which ensure shareholder and
company objectives are fully aligned.”
Apollo operates in sectors which can be
complex from a regulatory, supervisory
and legal perspective. Gustavo assures:
“The operation is always intent on
minimizing the risks and sharing its
vast experience in governance models,
compliance and managerial ethics with
the companies it supports.”
The business is equally experienced
in carrying out investments during
times of economic and financial market
uncertainty and finding business
opportunities that not only add value
for investors, but also for the countries it
invests in.
Gustavo adds: “Apollo has a history
of being a responsible, result‑oriented
investor with a long‑term development
perspective and a constructive approach
to the managed companies it works
with. This can already be observed in its
affiliates in Portugal.”
Equally strong collaboration between
company management teams ensure
group portfolio integration which further
contributes to its global development.
“The integrated business model
combines the strength of private equity,
credit and real estate platforms with
important factors such as long‑lasting
investor relations (including many
important pension/global sovereign
funds and institutional/private investors),
a long‑term capital base, a strong
reputation and a team with a great know
‑how,” he says.
Outside the financial sector, Apollo has
interestsinotherareassuchasdistribution,
transport, media, telecommunications,
industry and natural resources. “Apollo
is very committed to Portugal, there is a
desire to invest medium to long term in the
country and to diversify into other sectors,”
Gustavo states.
Investment Plans
Apollo started investing in Europe in
2001 and since then has been growing in
highly regulated sectors such as banking
and insurance, with acquisitions in the
United Kingdom, Italy, Germany, Spain
and Portugal.
Having bought Tranquilidade in
early 2015 and Açoreana in 2016,
these investments now position both
companies as the second largest non‑life
insurance operator in Portugal, holding
more than 15% of market share. Adding
to this investment is the purchase of
AdvanceCare’s business – shareholders
in Europ Assistance – giving the group
further interests in the insurance and
health sectors.
Gustavo confirms: “These investments
by Apollo are a sign of the trust this
important international investor has in
the national economy and especially the
Portuguese insurance sector.”
We asked Gustavo Guimarães
what Apollo’s future plans are for
Tranquilidade and Açoreana. He replies:
“We have clear objectives of growth and
to take a leading position in Portugal.
We want the best people, with the best
practices, demonstrating a culture of
innovation. We want to be recognized
as the market leader for collaboration,
efficiency, service quality and solvency.
Our ambition is to be the investor of
choice for partners and clients and to
be the insurance company that delivers
outstanding value”.
Gustavo concludes the insurer sector
and, specifically, the Portuguese market,
are amongst Apollo’s strategic investment
plans: “Apollo is very committed to
Portugal, there is a desire to invest
medium to long‑term in the country and
to diversify into other sectors. This is
evidenced by the recent acquisition of
Veralia, a leading company in the glass
packaging market, located in Figueira
da Foz. Within the Portuguese insurance
market, Apollo’s investments confirm its
commitment to develop a sector which
faces a lot of challenges.” •
Apollo is very committed to
Portugal, there is a desire to
invest medium to long term in
the country and to diversify
into other sectors

Ateamof986
employees,
including 376
investment
professionals
$192 billion
of assets under
management
(as of December 2016)
Company
listed in
the New
York Stock
Exchange
(NYSE)
Global company
with 15 offices
in 3 continents

Established in 1871, the Tranquilidade brand is well‑known in all
business sectors for its portfolio of comprehensive and specialist
insurance for individuals and companies. Its products are
distributed via a network of brokers and agents who are respected
for their industry knowledge and expertise.
With Tranquilidade’s 145‑year history, detailed market knowledge,
steady growth and reputation for innovation it aspires to be the
insurer of choice for clients and partners.
The merger of Tranquilidade and Açoreana – another centenary
brand – in 2016, created Portugal’s second biggest non‑life insurance
company with a market share of more than 15%, some 1.4 million
clients and almost 650 million euros in premiums volume. This
alliance has scale to grow and invest; its plan for the coming years
is to embrace the opportunities that present themselves within
its chosen markets, maintain its competitive edge and follow
clear strategic priorities of growth, profitability, simplicity and
service quality.
Jan de Pooter, the insurer’s ceo, discusses with FULLCOVER
the challenges, the areas and opportunities for change and his
leadership goals.
maintaining that
competitive edge
46
INTERVIEW WITH JAN DE POOTER, CEO OF TRANQUILIDADE

You’ve been Tranquilidade CEO since 2015. Having
worked in so many different insurance areas and
countries, why did you accept this challenge ?
Tranquilidade is a brand with history; it’s very strong
and well‑recognized in the market and being able to
be a part of this project, leading its transformation and
consolidation, was irresistible.
Besides Portugal, where else have you gained your
experience?
I worked in Asia, spending three years in Kuala Lumpur,
where I launched the first bancassurance partnership of
the Fortis Group in Asia with one of the biggest banks in
Malaysia, Maybank. Living and working in other places is
an enriching experience, not only professionally but also
personally.
The Apollo Group is now a shareholder of
Tranquilidade. How does this impact on the
company’s strategy and how is it adapting to a
different organizational culture?
The Apollo Group is not an insurer, it is an investor
and this factor enables it to recognise and respect
Tranquilidade’s existing culture, supporting it with new
perspectives and knowledge.
Having a new shareholder allows access to partners,
suppliers and the best managers in the world, which is
clearly an advantage for the company. Furthermore, we
can share the good practices and experiences of other
countries. Stability and growth are the two key‑words
Apollo Group brings to Tranquilidade.
In 2016, Açoreana joined Tranquilidade. How does
this acquisition add value to the Group and to the
insurance market?
The acquisition of Açoreana was a very important
milestone in 2016; Tranquilidade and Açoreana are
two centenary brands, with a history of experience and
expertise that positions them as leading players in the
Portuguese insurance sector. After the legal merger at
the end of the year, we became the second biggest non
‑life national insurer. Our expanded operation ensures
we are better prepared for future growth; we can build
upon our market presence, increase efficiency and our
competitiveness and invest more in technology, new
processes, products, quality of service and information.
This creation of a very strong operator in the market
also brings added value for our clients, associates and
partners.
The Portuguese market has been highly
concentrated. What is the impact of this upon the
national insurer market?
I believe the consolidation process is a natural step in
a mature market such as Portugal and it will of course
have an impact. Recently we have witnessed a high
concentration of insurers; in 2008, the top five non‑life
insurance companies, held 52% of the market share and
now this has risen to 70%. The markets predict this trend
will continue. As far as I am concerned, a market with
little growth and profitability/low interest rate challenges
can only encourage businesses to deliver greater
efficiency and competitiveness and create potential for
bigger investment capacity.
How did Tranquilidade prepare itself internally for
the Solvency II requirements? What was the impact
on the company and markets worldwide?
Preparation for Solvency II has been in progress for some
time before the 2015 deadline. Tranquilidade has been
implementing several initiatives gradually and defining
policies in fundamental areas, such as investment
and risk management, reinsurance, remuneration,
outsourcing, compliance and auditing.
The new system is more than an internal regulation
and the procedure of evaluating processes and risks has
created opportunities for improvement. For example,
risk planning enables us to revise our sales strategies
and product design to optimize risk capitals and price
premiums more competitively. To me, the biggest
impact of Solvency II, which is risk‑based capital, is the
need to adjust the capital to the risk profile. In market
terms, this implies several companies will have to adjust
their strategies, not only on a national scale, but also
internationally. On the other hand, it may also facilitate
increases in capital; something that will occur across
Europe. Another consequence of Solvency II is the need
for greater information transparency, with detailed
solvency reports available for the many stakeholders.
This, together with optimizing companies’ risk capital (as
mentioned before), delivers peace of mind to our insured
and investors, plus it’s an instrument that creates value.
48
Stability and growth
are the two key-words
Apollo Group brings
to Tranquilidade.

Tranquilidadehasahistoryofdevelopinginnovative
solutions. It was, for example, the first insurer
in Europe to launch personal accident insurance
for ‘Pokemon Go’ players. What is the strategy
that enables you to respond to the needs of more
informed and demanding consumers and also place
yourself ahead of the competition?
Weanticipatetheemergingmarkettrendswithproducts,
servicesandinitiativesthatmeetthenewneedsofour
clients.Technologyandhowconsumersreacttoitis
constantlyevolving;therearenewbusinesslinesand
newrisks.Being awareofwhatsurroundsus,findingnew
businessopportunitiesandlookingatproducts,services
andprocesses‑alwaysfromtheclient’sperspective‑are the
determiningfactorsforsuccess.Bycombiningourtechnical
expertisewithourcapacityforinnovation,weareclearly
settingourselvesapartandwewillcontinuetodoso.
Ourkeyfocusistoimprovetheconsumer’sexperience,
developspecificproductsforstrategicsegmentsandto
ensureournon‑compulsoryinsuranceproposalsadd value.
Recent studies point out to a paradigm shift in
clients’ relationships with insurance companies
and an increasing reliance on the use of digital tools.
What challenges does this present to insurers, is
technology disrupting the traditional business
methods and how is Tranquilidade adapting to this
new digital era?
It is indeed, a challenge for the market and naturally,
for Tranquilidade. The market is changing sharply, with
consumers becoming increasingly sophisticated in their
buying patterns, which we have to know better. In an
industry with multiple players and complex processes, we
have an ambitious goal which is to increase the efficiency
and agility of our processes and ensure a relevant and
effective follow‑up for our clients and brokers.
I trust that over the next few years, technology will
simplify processes and products further and greatly
impact the after‑sales service. We shall continue to focus
on these areas, launch new products and services and
continue to simplify our processes.
One of our top operational priorities is to improve
the client’s experience with the company in two key
areas; how we service and how we simplify client
communication/enable better access to information.
We have several ongoing initiatives for simplifying
and optimizing processes all relating to products,
subscription, after‑sales and claims. These include;
the upgrading of systems, new health, home and life
products and services, moving from paper to electronic
communication with clients and brokers, launching
an e‑learning platform and looking into new ways of
monitoring clients’ claims.
f u l l c o v e r
49
Our key focus is to improve the
consumer’s experience, develop
specific products for strategic
segments and to ensure our non-
-compulsory insurance proposals
add value.
Paula Rios of MDS Group with Jan de Pooter and Cristina Brandão of Tranquilidade.
apollo group

And is there any area where you see digital being the
dominant channel?
Claims is an area where digital interaction with the client
is perfectly possible. We are already seeing examples
of this, such as when opening claims’ cases by simply
sending a photo to the insurer. Another area is in
information provision; with more and more information
becoming easily available, there’s greater capacity for
analysis. I think process simplification and data analytics
are probably the most important components of the new
digital age and these will add huge value, both for the
client, the companies and distribution networks.
Tranquilidadehasbeenawardedseveralprizes.
ItwaselectedSuperbrand2016andwasgiventhe
portugueseBestBigNon‑lifeInsureraccoladefrom
Examemagazineforthesixthtime.Whatisthe
importanceofthisbrandrecognitionfromconsumers?
I consider these prizes to be recognition for our work. They
are important distinctions and, to quote our advertising
campaign, ‘bring more responsibility to us and more
tranquility [translation of Tranquilidade] to our clients’.
They are stimuli to continue improving our services
and products. We have a history of almost 150 years and
will continue to be the insurer of choice for our clients and
partners. We want to be leaders in client satisfaction and
profitability, unrivalled in the quality of the partnerships
we establish with brokers and agents and ahead of the
market for the support we give and receive from our
employees. Being recognized is very gratifying.
YouareimplementingtheAmbição2020[Ambition
2020]project.Whatarethegoalsbehindthisstrategy?
Ambição 2020 is a project we launched in early 2016 and
it will be our strategic pathway for the next few years,
providing a platform for growth. This project involves
all within the company (over 100 employees are directly
involved), and analyzes the national and international
market trends and their impact on or business. This in
turn, defines our future strategic direction.
Ambição2020hasfivekeyfoundations; the first is
technicalexcellence–everythingrelatedtoclaimsand
pricingsophistication,thesecondistosimplifyand
digitalizeprocessesandservices,thirdis tofocuson
strategicsegmentsandproducts,fourthistocontinue to
developthemostefficientdistributionnetworksand last
butnotleast(onthecontrary)istofurther developour staff.
We have well defined goals and all involved are aware of
the role they play. Progress is already very noticeable and
this will certainly be evidenced in our results in the next
few years.
In 2016 you attained growth in your results and your
client base. What is Tranquilidade’s plan for the
future?
The Ambição 2020 vision is a strategy for growth.
We intend to grow in market share, volume, quality,
profitability and service. Traditional companies have
been more focused on compulsory lines – auto and work
related accidents – giving us an opportunity to grow in
non‑compulsory lines, by launching innovative services
and products. We want to develop in strategic areas, such
as health and life and focus on innovation and insurance
which adds more value to everyone. We want to anticipate
and meet the needs of clients in all sectors offering
simplicity, innovation and professionalism – even in
product lines such as car insurance that will inevitably
become a lower priority within insurers’ portfolios.
In your view, what are the future challenges and
opportunities in the insurance industry and how do
you see the role of brokers?
We will have an increasingly complex market,
characterized by digital and emerging risks. In the
corporate area there are cyber risks and threats arising from
globalization. I believe brokers will have a stronger role
in the management of their clients’ insurance portfolios,
offering differentiating products and complementary
services that allow risk prevention and mitigation.
And do you foresee any changes for insurers?
In Portugal, the consolidation process will have a great
impact on the market during the next few years; new
players ‑ of a bigger dimension and scale – will emerge
and the resultant shareholder changes will bring more
rationalisaton and efficiency to the market. I think
insurers will revise their risk assumptions, given the
new risk based capital regime, leaving some to focus on
other areas of risk. Then, as I already mentioned, there
will be greater process simplification, more use of digital
channels to communicate with clients and partners
and increased transparency and quality with after‑sales
services.The opportunities presented by data analytics
and new risks are also important.
Tranquilidade and MDS have worked very closely
together throughout the years. How would you
describe this relationship?
The relationship between MDS and Tranquilidade is
very important; our ethos of co‑operation, trust and
professionalism has enabled us to support MDS in the
different business areas it has developed, such as those
managing contracts with State and public entities, the
network of agents and partners and of course, brokerage.
It is a partnership we are committed to and one we wish
to develop further.
50

Inrecognitionthateducationisakeyelementofyour
corporate social responsibility policy, you recently
established a partnership with Universidade Nova
– School of Business and Economics. What are the
goals of this partnership?
Nova‑SBE is one of the most reputable and innovative
institutions of higher education in Portugal and is
ranked amongst the best business schools in the world.
Tranquilidade’s support of a new Nova‑SBE university
campus, which is being built in Carcavelos, near Lisbon,
is part of a partnership that includes training, talent
management, digital transformation, consumer analytics
and distribution networks. Our ‘consulting labs’ program
is also part of the partnership. Here, Tranquilidade will
present challenges to Nova‑BSE students and teachers,
giving them experience of working with business
professionals while within a university environment. This
will be reflected in the student’s Masters Thesis which
while covering a relevant area and meeting demanding
criteria, bring the fresh vision of young people into the
company.
The insurance sector must better promote the
benefits it brings society. Do you agree?
Yes. The image of the insurance sector has been
improving but there is still a lot of work to be done. The
importance of insurance, whether covering an individual
life/families’ lives or protecting companies’ assets is
not always properly acknowledged. Our sector and the
essential role it plays within the economy must convey
this message more effectively. It is clear insurance
is a business, but it also adds value to society and is
fundamental to the sharing of information. Most people
do not appreciate the value of the claims we pay and
what insurers return to society. This communication
is everyone’s responsibility: the Portuguese Insurers
Association, insurers, brokers and agents.
On the other hand, it is also important to attract new
talent to the sector, showing how interesting it can be to
work in insurance and how it encompasses numerous
knowledge areas. Our partnership with Nova‑BSE will
help promote this. •
f u l l c o v e r
51
We want to be leaders in client
satisfaction and profitability, unrivalled
in the quality of the partnerships we
establish with brokers and agents and
ahead of the market for the support we
give and receive from our employees.
Century-old brands, Tranquilidade and Açoreana have
a long history and emotional connection with Portugal
and its people. They operate across all business areas
offering a wide range of products, including specialist
insurance, distributed via a network of brokers
and agents who are renowned for their expertise.
Tranquilidade and Açoreana’s profound market
knowledge, solid foundations for growth and brand
reputation ensures they are the insurer of choice for
clients and distribution partners.
The merger of Tranquilidade and Açoreana in 2016
formed the second biggest non-life insurance operator
in Portugal; it has more than 15% market share of
non-life business, some 1.4 million clients and receives
almost €650 million in annual premiums.
Tranquilidade and Açoreana aspire to be the market
leaders for client satisfaction and profitability; something
that will be achieved due to the unrivalled quality of
broker partnerships and employee support.
apollo group

54
Insurance
Development
Forum – IDF
Closing
the gap

f u l l c o v e r
55
idf
About the Forum
The IDF is a partnership between United
Nations’ (UN) leaders, the World Bank
Group and the insurance industry (which
takes the lead role). It was developed with
the support of the UN‑backed Political
Champions Group for Disaster Resilience,
first announced at the UN COP21 Summit
in December 2015 and officially launched
at a high‑level UN meeting in April 2016.
Members comprise the chief executive
officers/chairs and presidents of 14 global
insurance firms. Inter‑Governmental
Organisations are represented by
The Financial Stability Board, the UN
Developmental Program and Word
Bank Group. Global insurance industry
supporters include the International
Insurance Society (IIS), The Geneva
Association, The International Co
‑operative and Mutual Insurance
Federation and the Association of
Bermuda Insurers and Reinsurers.
The driver behind IDF is a High Level
Steering Committee comprising industry,
UN agency and World Bank leaders who
establish priorities and mobilise resources.
Chair is Stephen Catlin (also incoming
chair of the IIS), co-chairs are Helen Clark,
administrator, UN Development Program
(UNDP) and Joaquim Levy, managing
director and chief finance officer of World
Bank Group. Alongside insurance industry
representatives, members include Mark
Carney, governor of the Bank of England
and chair of the Financial Stability Board,
Dr Robert Glasser, special representative
of the Secretary General for Disaster Risk
Reduction and head of the UN Office
of Disaster Risk Reduction (UNISDR),
David Nabarro, special adviser of the
Secretary General on the 2030 Agenda
for Sustainable Development and UN
member and Stephen O’Brien, under
secretary general and emergency relief
co‑ordinator and head of the Office for
the Co‑ordination of Humanitarian
Affairs (OCHA).
To achieve this, the G7 committed to intensify its efforts to help vulnerable
countries manage climate change‑related disaster risk and build their
resilience. Protocols such as the Sendai Framework for Disaster Risk
Reduction 2015 – 2030, Sustainable Development Goals 2030 and the UN
Conference of the Parties (COP21) Paris Climate Agreement are already in
place and form part of the Post 2015 Agenda – a UN‑led process to identify
global and national development priorities.
The G7 leaders concede however, they need to learn from and extend
already existing risk insurance facilities such as the African Risk Capacity,
the Caribbean Catastrophe Risk Insurance Facility and other initiatives to
develop insurance solutions and markets in vulnerable regions.
Their desire to optimise insurance industry collaboration and their ethos
of ‘think together, act together’ prompted a number of global insurance
and reinsurance experts, including XL Group executive deputy chairman,
Stephen Catlin, to form the Insurance Development Forum (IDF).
At the June 2015 Summit in Schloss Elmau,
Germany, G7 leaders pledged to increase the
number of people in the developing world
who are insured against the negative impact of
climate change. Known as the G7 InsuResilience
target, they set a goal ‘to insure 400 million more
developing nations’ citizens against the effects
ofclimatechangeandrelatednaturalcatastrophes
by2020’.
Stephen Catlin, IDF Chairman & XL Group Deputy Chairman

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