Navigating risks for global food security Juerg Trueb, Head of Environmental and Commodity Markets Palm Beach Strategic Forum, 7-8 April 2014 Navigating.

Navigating risks for global food securityJuerg Trueb, Head of Environmental and Commodity MarketsPalm Beach Strategic Forum, 7-8 April 2014Navigating risks for global food securityJuerg Trueb, Head of Environmental and Commodity MarketsPalm Beach Strategic Forum, 7-8 April 2014

Palm Beach Strategic Forum | Juerg Trueb | 7-8 April 2014

Are we ready to face the food security challenge; or how can business help?

900 million people suffer hunger, 98% thereof in Asia and Sub-Saharan Africa

1 in 8 people in emerging markets suffer from hunger/malnutrition

74% increase in global food prices since 2005 has made food unaffordable for many

15% of US households suffered from food insecurity in 2010; food insecurity is a not just an emerging market issue

60% increase in world agricultural production by 2050 needed demand (population growth, shift of diet)

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Palm Beach Strategic Forum | Juerg Trueb | 7-8 April 2014

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Increase productivity through shift from subsistence to commercial farming

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Industry effort: New Vision of Agriculture

Population growth

Changing food preferences

Government policies (e.g. biofuel)

Demand-side drivers

Loss and waste of food

Urbanization

Trade and government policies (e.g. subsidies, trade restrictions)

Natural resource constraints (water, land)

Climate change, natural disasters

Commodity prices

Supply-side factors

Increase productivity

Insurance sector:

Risk management as a pre-requisite for access to production credits

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Palm Beach Strategic Forum | Juerg Trueb | 7-8 April 2014

Impact of climate change on agricultural production - Recent examples of weather impact

20% of sown area destroyed; 40% production (relative to 2009) lost; USD 1.4 billion direct losses; corporate farmers defaulted on production loans; Medvedev extended USD 1.3 billion in credit Russia banned grain exports triggering export restrictions elsewhere Grain handlers (domestic & international) stopped operations; importers faced force majeure; processors ran at reduced capacities Record food prices in 2010/2011 adding millions to the ~870 million already starving from hunger

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Palm Beach Strategic Forum | Juerg Trueb | 7-8 April 2014

Worldwide agricultural insurance premiums

USA & CanadaUSD 10,7 bn (55,0%)

Latin AmericaUS$ 0.87 bn (4,0%)

EuropeUSD 3,9 bn (20,1%)

AsiaUS$ 3,8 bn (19,5%)Africa

USD 0.09 bn (0,5%)

Australia & NZUS$ 0.2 bn (0,9%)

1) Brazil, Russia, India, China, South Africa

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Client and product focus (marked red)

Governments

Insurable Interest

Financial Institutions:• Credit risk protection• Reinsurance

Governments:• Fiscal balance• Social balance

• Credit repayment• Product added value

• Revenue guarantee (throughput & margin)• Quality guarantee

• Revenue guarantee (throughput & crushing margin)• Raw material cost (volume & price)• Quality guarantee

1) By bundling insurance with goods and services of input providers

Client universe

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Palm Beach Strategic Forum | Juerg Trueb | 7-8 April 2014

Legal notice

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