Project background


The Southeast and Central Europe Technical Assistance for Catastrophe Risk Insurance Facility SECO Project was established in accordance with the Grant Agreement signed on November 25, 2009 between Europa Reinsurance Facility Limited and the International Bank for Reconstruction and Development ("IBRD"). The International Bank for Reconstruction and Development (“IBRD”) - acting as an administrator of grant funds provided by the Swiss State Secretariat for Economic Affairs (SECO) under the Southeast and Central Europe Technical Assistance for Catastrophic Risk Insurance Facility Trust Fund - proposed to extend to Europa Reinsurance Facility Limited (“Recipient”) a grant via which, the International Bank for Reconstruction and Development would finance 100 % of eligible expenditures consisting of consultant’s services, training and operating costs. The initial project’s closing date under the agreement was March 31, 2013. As per twice amended grant agreement the Project closing date is June 30, 2018 and it includes activities in Bosnia and Herzegovina.
The Southeast and Central Europe Technical Assistance for Catastrophe Risk Insurance Facility GEF Project was established in accordance with the Grant Agreement signed on January 9, 2012 between Europa Reinsurance Facility Limited and the International Bank for Reconstruction and Development ("IBRD").The World Bank agreed to extend to the company, on the terms and conditions set forth or referred to in the Grant Agreement, a grant to assist in financing the Project. According to the Grant Agreement, the International Bank for Reconstruction and Development would finance 100 % of eligible expenditures consisting of consultant’s services, goods and incremental operating costs. The initial project’s closing date under the agreement was December 31, 2015.


Project Objectives


Europa Reinsurance Facility Ltd. was created to address very low levels of catastrophe and weather risk insurance penetration in Southeastern Europe. Preparation of the Facility began in 2008 with the financial and technical support from the World Bank under the SEEC CRIF (Southeast Europe and Caucasus Catastrophe Risk Insurance Facility) project, the Global Environment Facility (GEF), the Swiss Secretariat for Economic Affairs (SECO) and the United Nations International Strategy for Disaster Reduction (UNISDR) Europe. The Republic of Albania, Europa Re's first shareholder, joined in the spring of 2010; the Republic of Serbia and the Republic of Macedonia followed with their respective shareholder memberships in 2012.

The main rationale for governments’ participation in Europa Re program is to jump-start the domestic catastrophe and weather risk insurance markets through enactment of government policies, which can stimulate demand for catastrophe insurance products and increase the public awareness about natural disaster risks.

In the current regional sectoral and institutional context in which governments in the region have very limited financial capacity to assist their populations in regaining assets and productive capacity destroyed by natural disasters and catastrophe insurance and weather-risk coverage among homeowners, farmers, small and medium-size enterprises (SMEs) and farmers is currently almost non-existent in the region, membership in Europa Re program has provided shareholder member countries with numerous benefits:

  • reduced fiscal risk exposure to natural disasters through:
    • Expanded private catastrophe and weather risk insurance coverage of homeowners, SMEs and farmers;
    • Coverage of government assets;
    • Potential insurance coverage of government’s social obligations to socially vulnerable segments population exposed to natural disasters.
  • jump-starting of the development of local catastrophe insurance markets through the creation of country specific risk models, regulations, pricing and actuarial guidelines and new products – to be funded by international donors.
  • reduced systemic risk for the financial sector, particularly in earthquake prone countries, as the collateral of banks and the solvency of insurance companies will be protected.
Europa Re’s objective was to develop in partnership with local insurance companies, new weather-risk insurance products, automate insurance underwriting and pricing processes for such products, and increase public awareness of weather risk in participating countries.

By increasing access to financial protection through affordable catastrophe and weather-risk insurance products and transferring weather risk to the private sector we seek the reduction of economic vulnerability for homeowners, farmers, the enterprise sector, and government agencies to the adverse impact of climate change and will result in reduced physical and financial vulnerability to natural disasters and the lasting ability to adapt to climate change.


Innovative public – private partnership


Project structure

Because the program is owned and governed by participating governments in collaboration with the Board of Directors which is composed of independent, reputable professionals with re-insurance experience and a well-established track record in the industry, it ensures the engagement of major stakeholders locally. Moreover, because much of the technical work was focused on establishing systems to collect and synthesize weather data, stakeholders have gained requisite skills and knowledge to better understand weather risk and to adapt to climate change in their respective countries. Furthermore, public awareness of climate change and the benefits of catastrophe and weather risk insurance was raised through information campaigns and new regulations, resulting in increased demand for catastrophe and weather-risk insurance products.

Corporate governance
Europa Re is:
  • Fully decentralized Swiss-based public-private partnership catastrophe reinsurance company with representative offices in Skopje, Belgrade, Tirana and Almaty;
  • Owned by the governments of the FYI of Macedonia, the Republic of Serbia and the Republic of Albania; the Europa Re Shareholder Member Countries that provide overall strategic oversight and policy advice;
  • Licensed and supervised by FINMA, the Swiss Financial Market Supervisory Authority and audited by reputable external auditors;
  • Led by a Board of Directors composed of reputable professionals with (re)insurance experience and a strong management team with well-established track record in the industry;
  • Managed by a Management Team that comprises highly skilled reinsurance professionals with proven track record.
Business model
Our main objective is to develop the local catastrophe risk insurance markets in Southeast Europe by equipping the direct insurance companies with adequate reinsurance, know-how and insurance technology to enter or expand presence in catastrophe and weather risk insurance product lines, which include earthquake and flood insurance and multi-peril agricultural insurance products. Improving risk management standards at local, national and regional levels as well as educating the public on natural disaster risks and disaster risk mitigation, are also among the core objectives of Europa Re.

Europa Re’s regional approach to managing catastrophe risk mirrors the trans-boundary character of most natural disasters, which often affect a number of neighboring countries and its regional activities will facilitate:
  • The development of local and regional insurance markets for catastrophe insurance products;
  • Improved credit quality and affordability of catastrophe insurance products sold to consumers and businesses; and
  • Reduced fiscal exposure of governments to natural disasters due to increased level of insurance coverage among businesses and homeowners.

Participating insurance Partners


Direct insurers part of the program benefit from:
  • Access to a sophisticated web-based production platform with integrated insurance technology applications that include automated pricing and underwriting, innovative claims management services, financial and regulatory reporting, interactive consumer information portal (CATMonitor) and risk management; and
  • Dedicated reinsurance capacity for the risk arising out of sales of insurance products endorsed by Europa Re.
These features are expected to considerably reduce local insurers’ production costs, eliminate technical complexity involved in issuing catastrophe and weather risk policies, thus resulting in lower insurance premium and improved claims settlement experience for consumers – households, SMEs and farmers.


Procurement


World Bank Procurement Procedures
For more information about procurement activities, please e-mail: procurement@europa-re.com

Procurement Notices


Publications


Project related expenses information