Sascha, would you give us an overview of which risks are covered by Albatros in property insurance in the industrial sector and what all falls within your area of responsibility? 

First and foremost, I am responsible for the property and business interruption insurance of the Lufthansa Group. The so-called property assets include buildings owned by Lufthansa, the operating equipment as well as goods and inventories. This includes everything from simple office chairs, tools and spare parts, aircraft simulators to large buildings such as Lufthansa's training and conference centre in Seeheim. The second component, which is often larger in the event of a loss, is business interruption insurance. It covers the financial risks of the LH Group as a result of insured property damage. As an example, one can mention loss of earnings, ongoing wages and salaries, rental payments and some other items. In addition, I also look after selected third-party clients and joint venture companies in property and business interruption insurance. 

The so-called terrorism insurance also falls within my area of responsibility. It covers property and business interruption damage as a result of a terrorist act or other political dangers such as civil war or civil unrest, which are excluded in property insurance. Technical insurance rounds off Albatros' portfolio in my area. The largest cover in this area is the maintenance and repair insurance for companies with so-called MRO activities. MRO stands for Maintenance, Repair and Overhaul.  This insurance covers damage to the processed aircraft part due to processing errors. It also includes engine test cover for engine test runs and machinery and assembly insurance for individual risks and projects.  

That is quite a range. But it is also understandable, since the operation of an international air transport group gives rise to a number of risks. What role do we play in this for the Lufthansa Group?

From a purely formal point of view, we are the corporate broker of the LH Group and are responsible for organising insurance cover in the interest of the Group. The much more exciting question is how to live this role! From my point of view, our role can best be defined as risk manager for the entire Lufthansa Group. Our task is to identify existing or newly emerging risks, to analyse them, to point them out to the responsible persons in the Group and finally, if necessary, to cover them. 

Specifically, in the area of property insurance, this means first of all knowing the property values but also the company key figures for the business interruption insurance and insuring them adequately. However, there are always projects such as major new construction and renovation activities or the relocation of a simulator where construction work insurance or transport and assembly insurance may be required.

It is also clear, however, that not every risk in the Group can be insured, nor does it have to be insured at all. A group as solid as the Lufthansa Group can certainly bear a certain share of its risk itself with its good risk management. It is not important to insure every small loss, but above all those risks that would acutely endanger the balance sheet in the event of a loss. This can work, for example, through adequate deductibles in the respective insurance contracts. A real milestone here was certainly the implementation of a captive solution in the area of property insurance. We succeeded in this in very good and close cooperation with our colleagues at Delvag Versicherung AG for the last tender in April of this year, which has given us a much better position in the insurance market. I would like to take this opportunity to thank my colleagues once again for their excellent cooperation!

What does your work look like in practice?

The work in the practice is often very diverse and varied. Of course, we also have some day-to-day business. From internal coordination to customer enquiries to market observation, it's all there. What is always very interesting and exciting for me are the worldwide fire protection inspections that we carry out together with the insurers. Due to Corona, this has been a bit more difficult recently, but in phases it is possible again. Here you not only get to know the most diverse companies and contact persons in the Group, but also gain a good insight into work processes as well as organisational and plant fire protection at the individual locations. We also like to combine such appointments with annual meetings or actively accompany the establishment of a fire protection concept in order to expand it to meet the requirements of insurers with regard to property insurance.

Then, of course, there is the tendering of larger contracts. This often runs in phases and over several months. Either as a new project to hedge certain risks or for existing large contracts. Because these are also regularly put out to tender in order to create the best relationship between coverage and price for our internal customers. New projects are often construction projects for which an individual combined policy consisting of construction work and liability insurance is used. But the relocation of flight simulators is also a complex project that we often accompany. Here, risks arise at almost all milestones, from dismantling and transport to assembly and the test run. We cover this, for example, with a combination of transport and assembly insurance.

In addition, we regularly organise client events such as the Industry Insurance Day, in which I am involved together with my colleagues. Here we inform our clients about current market events, past or pending tenders and all topics that concern the LH Group from the insurance side.

How do you assess the risks in the property insurance sector in the future?

Climate change and the associated risks and damage will also play a central role here. This year alone, the flood disaster in Germany and the fires in Greece have shown how quickly situations with devastating effects can arise. The intervals between such events are getting shorter and shorter and the losses run into the billions. Here, effects on premiums are to be expected. This also applies to existing and upcoming supply bottlenecks. For these lead, for example, to increased construction costs that need to be covered. This affects customers and insurers alike.

In general, insurers are paying more and more attention to the topic of fire protection in the area of property insurance. It is therefore important for companies to position themselves well in order to benefit from good offers and conditions. Of course, it is also in their own interest to carry out risk management in order to avoid losses. 

In the future, companies will also be more concerned with the issue of ownership options. The question of what I can insure myself and what I cannot is still central. This is also one reason why the captive model is currently experiencing a renaissance more than ever.  

Thank you very much for the interview. 

About Sascha Schwank 
Sascha Schwank has been with Delvag Group for around three years. He previously worked in various positions in the Property division at REWE Group for around five years before moving to Delvag Group in July 2019. Sascha is a trained insurance salesman and graduated with a Bachelor of Insurance Management from the Technical University of Cologne. In his free time, he not only spends time with his family or playing sports, but is also a passionate FC fan. 

Interview: Philipp Schmid, Corporate Communications Delvag Group