Participants of the meeting organized by Nart Brokering discussed pharmaceuticals, chemicals and cosmetics sectors. Nart Risk Management Forum 2008 also supported by Risk Management Forum 2008 Turkish-French Trade Association and German-Turkish Chamber of Chamber and Industry hosted executive people from Pharmaceuticals, Chemicals, Cosmetics and Perfumery sectors apart from many local and foreign expert insurers and Risk Managers.

“Risk Management Forum 2008” organized by Nart Brokering took place at Istanbul Hyatt Regency Hotel on 14 October 2008 with attendance of over 300 participants. Held this year for the 5th time and bringing sector executives and insurers together, this forum addressed “Risk Management in Pharmaceuticals, Chemicals, Cosmetics and Perfumery sectors”. Both local and foreign speakers who are expert in their own fields shared their visions and experiences at Nart Risk Management Forum.

Levent Nart, Chairman of the Board of Directors of Nart Insurance and Reinsurance Brokering, speaking at forum opening, said that Pharmaceuticals, Chemicals, Cosmetics and Perfumery sectors are among the most risky sectors in the world. Giving some information about changing trends in pharmaceuticals sector, Mr Nart said that Brazil, China, India, Indonesia, Mexico, Russia and Turkey would account for 1/5 of world pharmaceuticals market expected to reach 1,3 trillion dollars in 2020.

AGING POPULATION CHANGED MEDICINES

Pointing out that world population is getting older quite fast, Mr Nart said: “Life expectancy in early 1900s was 55 in the USA and Europe, this expectancy reached 85 in 2008. 2/3 of people aged over 65 are alive.” Indicating that there is a shift to medicines preventing development of diseases from therapeutic medicines in pharmaceuticals sector, Mr Nart also said that R&D costs have shown a fast upward trend in the sector. Pointing out that chemicals sector is now going through a new era with the advent of nanotechnology-based applications, Levent Nart also said that people now tend to give a bigger consideration to their personal care in parallel to enhancement in educational and income level in the world and that this, in turn, provides cosmetics sector with new opportunities. Mr Nart said in another part of his speech that NART is keeping up an uninterrupted growth in its 9th year reinforcing its leadership identity in 10 niche markets with its sectors-specific restructuring and that they are providing services in Turkey from 30 different countries doing business in Pharmaceuticals, chemicals, main and subsidiary automotive industries, construction and building material production, Shopping Malls, retail, energy, metal, machinery and food sectors, in particular. He pointed out that they, as innovation leader of Turkish insurance market, have presented “doctors-specific” Jinerisk and Ortorisk products and that, thereafter, they brought into Turkey “art collectioners-specific” NART PLUS product putting most updated protection/ preservation measures and techniques available in such centers of arts as Basel, New York, Miami, Maastrich and Venice at disposal of art-lovers, museums, galleries and auctioneers in Istanbul.

Teoman Yelkencioğlu, Chairman of German-Turkish Chamber of Industry and Commerce, making a speech at meeting opening, pointed out that Nart Brokering has proved to be responsive to risk management in the sector with its forums.

RISKS IN PHARMACEUTICALS

At first session of Risk Management Forum 2008, participants discussed “needs analysis and problems of pharmaceuticals sector in the world and Turkey as well as recommended solutions”. Mr Kaya Turgut, Honorary President of Pharmaceutical Manufacturers’ Association, acting an chairman of the session, said that risk management has gained more importance for Turkey as it faces ever-changing risks.

Sanofi-Aventis General Manager Olivier Guillaume, first speaker of the session, pointed out that one of the most important problems in pharmaceuticals industry is intellectual property rights asking for implementation of the EU criteria in whole world in order to prevent spurious medicine production. Mustafa Nevzat İlaç Sanayi General Manager Levent Selamoğlu, second speaker of the session, pointed out that world pharmaceuticals market amounted to about 671 billion dollars and that Turkish market is about 6.8 billion Euros. Indicating that 80% of the medicines used in Turkey is are locally manufactured and that 20% are imported, Mr Selamoğlu said: “Despite this, 50% of the market is controlled by foreign companies, as imported medicines are expensive.” Indicating that they have 2 of 3 important medicine patents obtained by Turkey, Levent Selamoğlu also said that, as the first Turkish pharmaceuticals company succeeding to export medicines to the United States of America, Mustafa Nevzat their Product Liability risks have been successfully placed by Nart Insurance. Allianz executive Klaus Przybyla speaking at the session pointed out that medicines are changing owing to the aging population and that lifestyle medicines came to the foreground. Pointing out that change in business-doing style in pharmaceuticals sector delegation of all functions other than production and pharmaceutical researches to 3rd companies (outsourcing) create not only new risks but also new opportunities, Mr Przybyla said: “Let us manage the risk and not let the risk manages us.”

COMPLEX STRUCTURE OF CHEMICAL INDUSTRY

At second session of Risk Management Forum 2008, participants discussed needs analysis and problems of pharmaceuticals sector in the world and Turkey as well as recommended solutions”. Aviva Sigorta General Manager Ertan Fırat chaired the meeting and said that Risk Management Forum has undertaken a very important function in that it brought insurance sector and the real sector together. Munich Re Group Risk Analysis Manager  Dr. Volker Kraus, first speaker of the session, gave information about the REACH Act which took effect in the EU countries at June, 2007. Pointing out that products are now compelled to go through a tight audit with the advent of this new Act, Mr Kraus said: “As a requisite of the REACH standards, products are going to be manufactured in such a way not to cause harmful effects for the human and environment.”

NO MODERN LIFE WITHOUT CHEMICALS

Türk Henkel Kimya Sanayi ve Ticaret General Manager Erdem Koçak, one of the speakers of the session, gave information about the chemicals and development of chemical industry. Giving examples from day-to-day life about how importance chemical industry is in human life, Mr Koçak said that “there would be no modern life without chemicals.” Chris Rigby Smith, a partner of JLT Limited, took the floor as last speaker of the session and gave information about “Business Continuity Management” in chemical industry.

At third session chaired by Levent Nart, Nart Insurance and Reinsurance Brokering General Manager, participants discussed the role of insurance companies, brokers and risk managers in risk management”.

RISK MANAGEMENT DOES MATTER

BASF Group World Risk Management Vice President Friedrich Schussler, a speaker of the session, gave information about BASF products and organization structure. He indicated that BASF, a global company headquartered in Germany and Belgium, is doing business in all continents of the world and that its annual turnover is 61 billion dollars. Pointing out that insurance is an important concept for BASF, Mr Schussler said that they are opting for risk sharing with many insurance companies in the world and that, in this sense, they have a deep-rooted cooperation with Nart Brokering in respect of finding solutions to local problems and of following up claims and premiums as well as of ensuring a good coordination about local insurance solutions through international programs.

RISK MANAGEMENT GIVES ADVANTAGE

Eureko Insurance General Manager Okan Utkueri, a speaker of the session, gave brief information about their company’s place in Europe and the world. Pointing out that there are many risks for companies in business world, Mr Utkueri said: “Risk management is for reducing individual companies’ risks. Let’s eliminate the risks if we can. Otherwise, let’s reduce them if we can’t and let’s place unaffordable risks with insurance companies. Companies getting risk management done would be at advantage in tomorrow’s market.”

AIG Insurance Türkiye General Manager Philip Schwarz, a speaker of the session, took a general stock of the current crisis going on in the world as well as of AIT itself and said: “AIG is in Turkey since 1976. Group has no problem in field of insurance business. Like all companies, we are under control of the Treasury and we have strong capacity for claims reimbursement.” Indicating that environmental risks and product liability risks are on the rise in the world, Philip Schwarz also said that liability insurances would gain more importance in Turkey, as well, in the period to come.

Risk management is brokers’ business

Levent Nart, Chairman of the Board of Directors and General Manager of Nart Insurance and Reinsurance Brokering, making a presentation at final session of Risk Management Forum 2008, indicated that risk management is very important for companies on the score of their profit-oriented growth targets.

Pointing out that every company aims to grow with profitability in business life, Mr Nart said that companies might have to face many risks on this road. Indicating that companies’ risk management should be handled by brokers as customer proxy, Mr Nart said: “In risk management, first thing to do is diagnose and analyze the risk. It may be necessary to review safety measures and to take new measures to reduce risks. Weight of risk for individual companies must be measured. Damage likely to be caused by the risk must be calculated. After all this is done, a decision is made about which risks are going to be reduced and about which risks are going to be transferred to insurers. Creating most convenient alternatives with respect to risks to be transferred to insurers is also a broker’s job.”

Levent Nart underlined that Nart has launched Risk Engineering department as an extra activity in Risk Management to provide Turkish and international investors with service on the strength of an engineering staff with specialization on different spheres and that their aim is to highlight the fact that risk management does not involve protection by way of insurance offering their customers extra service in legal and technical aspects, as well.

RECEIVABLES-RELATED RISKS

Levent Nart also made an assessment about management receivables-related risks, as well, and said that a receivables-related risk is the most lethal risk for a company and that this accounts for 30% of receivables in companies’ balance sheets.

Every receivable uncollectible forces companies to make new sales. Pointing out that companies have to make out credit insurance in order to be able to eliminate receivables-related risks, Levent Nart said: “Number of companies on the brink of insolvency and bankruptcy both in the world and Turkey is growing every passing day. As insolvent companies fail to fulfill their obligations when due, their suppliers, too, find themselves at a difficult position.”

CREDIT INSURANCE

Pointing out that credit insurance secures deferred sales of goods and services made in domestic and foreign markets for up to 180 days against risk of nonpayment, Mr Nart also said: “Credit insurance provides assurance both against commercial and political risks. If you make out this insurance, nonpayment risk can be rendered monitorable and measurable by way of credit insurer risk analysis and risk follow-up; it collects receivables and pays indemnity if receivables remain uncollected.”

WHAT COMPANIES GET?

Pointing out that credit insurance prices are set depending on buyer’s risks, sales maturity and payment terms, annual insurable turnover, product variety, operating sector and demanded credit limit, Mr Nart listed the credit insurance-related benefits to companies as follows:

 “Regular follow-up system on buyers

• Information about potential buyers
• Shouldering of debt and collection burden
• Scope and price advantage
• Preparation and discussion of insurance specifications needed
• Helping preparation of related documents at time of claim, giving a start to indemnity paying process”

Implementing credit insurance within the framework of expanded special conditions, NART offers its customers a huge knowledge derived from its over 25-year experience and strong connections with international partners in 120 countries.

At dinner organized after Risk Management Forum 2008, Nart Sigorta ve Reasürans Brokerliği A.Ş. celebrated its 9th anniversary of its formation. Jan NAHUM, a distinguished businessman and a doyen of automotive industry, making a speech at the dinner, shared with predictions about 2023 vision for Turkey. Indicating that our country is still a practitioner country despite all developments, Mr Nahum said: “A Turkey that is creator is a must in the centenary of the Republic.