Interview

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Interview with Dr. Stephan Haverkamp, Senior Underwriter, Munich RE

In the next issue of EOMAG, EARSC had the opportunity to discuss with Mr. Haverkamp from Munich RE some relevant questions for the Insurance sector and its possible partnership with Geo-information service providers.

UNDERSTANDING THE SECTOR

From the point of view of geo-information, how can EO service industry better understand the Insurance sector (business structure, strategy, potential growth technologies and prospects)?

The insurance sector is dynamic and has introduced a great variety of new insurance products in recent decades. Each line of business is very specific in terms of technical requirements. Therefore it would be interesting for the EO industry to gain a deeper insight into those lines using geo-related information and identify common business opportunities. Due to risk capital requirements, the insurance industry is always interested in maximum precision in risk evaluation. If this is not possible, the insurance industry may be prevented from servicing certain lines of business or regions. The EO service industry has the potential to improve risk evaluation or even make it possible in the first place.

As your role within your company, what challenges have you faced in this position and what in your background prepared you to meet the challenges of partnership within geo-information sector?

There are very well-informed experts in the geo-information sector and in the insurance industry. However, the two worlds are completely different, so it is not unlikely that people will be talking at cross purposes. As I also have some experience in programming GIS-based modelling software, it is an interesting challenge to interface the geo-information sector with the insurance industry’s needs.

Briefly, what the insurance sector needs and better understand how it uses or wants to use geo-information, such that we can align our services appropriately

Insurance products with geo-information components require a reliable input data supply. Clearly, the supply of geo-information has been substantially improved during the last few years. The crucial thing is that what the insurance industry needs is not raw data but information and intelligence. In the process of comprehensive risk evaluation, certain geo-related parameter values can have a huge impact on the overall analysis result. The insurance industry is striving to translate these parameters into risk information, such as premium rates or amount of losses. Technically, this translation is usually processed by very specific GIS-based models. In summary, the value of geo-information for the insurance sector will substantially increase when appropriate model applications can be provided along with spatial input data.

COOPERATION & PARTNERSHIP WITH EO INDUSTRY

In your opinion…

Is there a role for geo-information community inside insurance sector? Could both sectors work together? What type of dialogue mechanism already exists or could take place with the EO service industry? What is your opinion in future alliances/collaborations with industry players?

Yes, there are some geo-information communities inside the insurance sector. Insurance and reinsurance companies that are substantially involved in geo-related insurance products are staffed with experts in geo-information technology. These experts sometimes team up for joint projects with insurance-specific objectives. Munich RE also offers advanced training courses on geo insurance applications for our clients.

Where is your company announcing opportunities for the EO service industry and what can you advice to our members who like to start business with you? Would there be a role for EARSC to help finding potential contractors for doing business?

It is still difficult for both parties to identify the appropriate business partners. Usually we are not interested in off-the-shelf products and thus have to do some research about a companies’ capabilities and interests before we enter into a contract. It would be a great step forward if EARSC could provide a catalogue of service providers, including a summary of their expertise in the insurance sector. For example, Munich Re is looking for a company with additional dedicated yield modelling and system development capabilities for our agricultural insurance division .

Are there new upcoming opportunities from Climate Change? Increasing demand due to increasing awareness of the citizens? Increasing environmental risks? New opportunities – e.g. transportation along the North Eastern Passage?

It is foreseeable that climate change and increasing environmental risks will give rise to new insurance products in many markets. In the last few decades, the insurance sector has already had to cope with the effects of climate change. For example, in some agricultural production areas, typical precipitation and temperature patterns have changed. This has a substantial impact on crop production. Consequently the extent of insurance coverage and rates have to be adjusted. Terms and conditions of these insurance products are directly related to the variability of all influencing production factors like precipitation, temperature, soil, management, etc. Thus the technical analysis requires plenty of geo-information data on a high temporal and spatial resolution scale. It is very likely that we will need further specific tools for environmental risk evaluation.

SERVICES

Innovation within the insurance sector is usually important, can we (EO service industry and oil and gas) do take actions to bring the research and industry in both sectors together? Do you co-operate with industry to improve and innovate in terms of your products?

The insurance sector has two major objectives: first, increased efficiency of existing processes and, second, development of new insurance markets. Especially the latter is a concrete example of where there can be cooperation. Munich RE’s role is to establish a sustainable insurance system, which would pave the way for the EO industry to develop appropriate applications. We also need to define the insurance-related parts of the concept. In order to complete the cooperation, the EO service industry needs to contribute its technical expertise. Both industry sectors would benefit. The return for the EO sector is generated from selling applications and EO information periodically, whereas our income is generated from traditional insurance business. Both sectors need to keep an eye on the economics of their initial investments. The expected return from new business has to be sufficient in relation to development expenses.

FUTURE & SOCIETY

At the end of the interview, we would like to ask you for your overall recommendations on the future development of the geo-information service sector, and would like to ask to give some hopefully positive messages to the members of EARSC

We see a high potential for the geo-information sector to service the insurance industry. The key to success will be the capability to provide services of value for daily insurance business. Therefore it is essential to improve communication. It is still a difficult task to identify EO companies that are in a position to provide the services we need. My view is that companies capable of providing interdisciplinary competence can easily introduce valuable innovations to the insurance sector. Frequency, resolution and coverage of geo information data have been improved, which implies high potential benefits for the EO service industry. There are plenty of unexplored opportunities.

About Mr. Haverkamp
As a senior underwriter, Dr. Haverkamp is responsible for acquiring and developing agricultural business on behalf of Munich Re, the world’s biggest reinsurance company and leading agricultural reinsurer.
After two years of military service, he began his studies in agriculture and computer sciences in 1991. During this time, he also worked for the United States Department of Agriculture (TX), German Federal Ministry of Agriculture and an insurance company (LVM) in Germany. In 2000, he completed his academic education with a PhD thesis about method development for large-scale hydrologic models. Prior to the start of his reinsurance career in 2002, Dr. Haverkamp worked as a software engineer for Daimler-Benz InterServices (debis).

Eomag!23_Interview with Dr.Stephan Haverkamp, Munich RE.pdf