Exclusive interview with Francesco Masci (CEO of DDOR): “We insure old and new risks to make companies more sustainable”

Since February 2022, Francesco Masci has been Chairman of the Executive Board of DDOR Osiguranje, the Serbian insurance company which operates under Unipol Group, among the largest corporations in the insurance industry in Italy and a leader in the motor TPL business.

In an increasingly unstable geopolitical and climate context, the challenge of predicting risks and quantifying their possible impact has become more complex and at the same time unavoidable to ensure stability and the very survival of economic activities. On the other hand, digitization offers the possibility of monitoring a multiplicity of factors with a level of precision that was unthinkable just a few years ago. Finally, there is the emergence of the issues related to corporate responsibility in terms of environmental, social and proper management (ESG, Environmental, Social and Governance) impact, issues that do not concern a generic sensitivity of companies, but rather their ability to mitigate risks and damages due to improper, sanctionable or unaware business conduct of interaction with the environment outside the company. These are issues that every international manager is confronted with and are now present in Serbia as well, albeit with impact and breadth typical of the country, which in some areas is keeping pace with global developments and in others still needs to take the necessary actions to recover from decades of neglect and disregard.

Mr. Masci, in which way is the world of insurance and its products changing?  And what are the risks that are still not fully perceived in Serbia?

On the one hand, we keep adapting our offer to the evolving needs of the insurance users, on the other we try to anticipate trends and risks. In addition, we strive every day for a better insurance company and for a better future, and to achieve this goal we continue down the road to invest in the future of DDOR and to secure the funds to strengthen the welfare of DDOR with several initiatives, to nurture, upskill and step up the capabilities of the people and the talents in the company, to upgrade the IT environment, to implement certain strategic actions in order to enhance our competitive positioning to develop closer ties with our Group, with the goal to be a reference player for the local communities, and to serve our clients.

Francesco Masci greets President of the Republic of Serbia Aleksandar Vucic at the opening of 2022 edition of the Belgrade Car Show, of which DDOR was the main sponsor. In the background is the Minister of Investment and External Trade Tomislav Momirovic.

Moreover, in my opinion, the key risk where there is still some ground to cover in Serbia in terms of awareness is connected to ESG, despite the improvements delivered over the last few years. In particular, there is still a way to go with regard to the transition to a green economy and to separate collection of waste where the country is lagging behind the EU countries which offer the highest standards. Also, it is worth stressing that climate risk is a certainty, not a probability and last year figures paint a quite complex picture with a total number of global natural disasters in 2023 close to 400, resulting in an overall amount of economic losses equal to some $380bn, 22% higher than the long-term average and in excess of $300bn for eight consecutive years, driven by considerable earthquakes and severe convective storms in the United States and Europe, of which global insured losses are estimated at $118 billion. Therefore, only nearly 31% of global economic losses were covered by private or public insurance, which represents a considerable drop compared to the prior year, when more than 42% of total losses were covered and the protection gap hit a low. As a matter of fact, the costs generated by many NatCat and extreme weather events across the world had to be covered by local governments, and in my opinion, this is a quite painful concealed social iniquity, as the State secures the needed funds through the income tax and the corporate income tax, therefore all the citizens and the businesses – even those who do not suffer any damage – contribute to the reconstruction work.

What were your expectations of the country and the working assumptions you had before starting your current assignment (perhaps even based on desk data) and the differences you have noticed since you came here?

First and foremost, it is worth noting that Serbia is still a relatively small economy, with a significant scope for future potential growth and it goes without saying that there is still a lot of ground to cover to catch up with neighbor countries’ economies, which so far have benefited from the close ties with EU. In addition, it is glaringly evident that Serbia is in the sweet spot concerning technology. In my opinion, this can definitely be one of the pillars underpinning the future growth of the country, acting on the one hand as an enabler of the future development of Serbia, and on the other supporting the constant improvements of the industrial and financial sectors.

All in all, the strength and development of a country and of an economic system are strictly connected to the solidity and progress of all the key industrial and financial sectors, which need a stable political, legal, economic and regulatory framework.

With 1,300 employees and nearly 17 billion dinars in premium income, DDOR a.d. Novi Sad is one of the most important insurance companies in Serbia. Historically focused on non-life insurance (motor and property insurance), which accounts for 85 percent of revenues, the Novi Sad-based company is increasing its life insurance segment, which now generates over 2.5 billion dinars in premium income. Over fifty percent of customers are individuals, followed by small and medium-sized enterprises and large corporations.

DDOR is part of the Unipol Group, one of the major Italian insurance players with a premium income of approx. Euro 15.1 billion (preliminary figures).

Insurance has always been considered a stable industry partly because it is reluctant to innovate, which always involves risk. On the other hand, in which way is the innovation taking place in this sector and what initiatives is it pursuing?

To start with, I’m afraid I have to disagree with the statement that insurance companies are regarded as steady because of the fact they are hostile to innovation. On the contrary, in my opinion, the insurance sector is considered as steady because top-notch insurance companies follow a very prudent approach and strategy in order to remain profitable, solid and stable over the years. As a matter of fact, first-class insurance companies actually play a vital role in the economy, and in certain cases, they are even at the forefront of the market in terms of technological progress.

Besides, we are strongly committed to protecting the environment and fighting climate change, which has a tremendous impact on extreme adverse weather events and natural catastrophes. In terms of loss prevention and agritech, as insurers, we need to develop new and more sophisticated predictive models in order to anticipate certain risks and protect our clients.

The speech by Renzo Giovanni Avesani, Group Chief Innovation Officer, at the Italy-Serbia Innovation Forum in December 2023

In particular, on the one hand, we create partnerships between the public and private sectors, while on the other we strive to use advanced technologies. In Serbia we have been partnering with BioSense Institute to develop the app DDOR Terra, which, in short, on the one hand, simplifies the process of contracting crop and fruit insurance policies and, on the other, streamlines the claims’ notification, paving the way for both a better customer experience and a more accurate and smooth risk assessment and loss assessment, whilst in Italy we have a dedicated solutions-factory, Leithà, developing data-intensive solutions, applications and components, using artificial intelligence, data mining and machine learning aimed at tackling amongst other things, the hydrogeological risk connected to the agriculture.

In addition, the use of telematics through the over 4 millions black boxes installed in the vehicles of Unipol insurance users and managed by Unipol Tech enables us, amongst other things, to gather a humongous amount of data on traffic and mobility that are made available on a no-name basis to the public administrations, which are the first users. All in all, more safety is coupled with lower costs and more health and the black-box play out as a green box, with its capability of assessing the environmental impact of the different driving styles.

Last but not least, Unipol Group cooperates with SpaceX and Starlink and this played a role in facilitating the rescue and recovery operations in the flood-stricken areas in Emilia Romagna in 2023.

ESG principles are also increasingly emerging in Serbia as the compass of companies that wish to present themselves to customers and employees as promoters of a positive social impact on the physical environment in which they operate. What activities has DDOR carried out in this regard?

Firstly, insurance companies are particularly aware of and sensitive to the threats posed by climate change and they can also play a significant role in financing the transition towards more sustainable economies. Climate change matters, because it is a risk and it may affect all our lives, business and economic perspectives.

Besides, Unipol Group has joined the UN-convened Net-Zero Asset Owner Alliance, whose institutional members have committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050. Moreover, in our Group strategic plan for 2022-2024, we have set out very ambitious ESG targets. We are part of the community; we are successful thanks to the community, and this is how we show it. These targets are aligned with the Group’s new climate strategy which details how the Group is gearing up to facing climate-related risks and seizing climate-related opportunities.

Francesco Masci with Italian Ambassador Luca Gori at the presentation of the award for the best ESG standards among Confindustria Serbia member companies.

In Serbia, at the beginning of 2023, a new organizational unit was established, namely the Department for Sustainable Development, which is an indicator of our commitment to improving social responsibility and sustainable practices in our business. Also, since 2022, we have been supporting the campaign “For a forest in your neighbourhood”, which greens urban environments in cities of Serbia. In addition, DDOR has established a robust platform for environmental protection through the extensive use of electrical energy from renewable sources, recycling substantial amounts of materials, launching dedicated campaigns to promote and support the green agenda, to raise people’s awareness about the plastic pollution and its devastating impacts on the oceans, to protect the natural ecosystems and restore the biodiversity. Needless to say, with regard to the latter, I’m particularly proud of DDOR joining the Ogyre global community, an innovative start-up with a social vocation, for the recovery of litter from the ocean, as we acknowledge that plastic pollution is one of the biggest environmental issues of our century.

DDOR is headquartered in Novi Sad and has always been closely identified with Vojvodina. What opportunities do you see of the process of integration and quasi-conurbation between Belgrade and Novi Sad that is taking place in recent years due to better infrastructure and the development of remote work? What are the opportunities, complementarities as well as differences between the two cities that are the driving force behind the country’s economic development?

The 2023 award ceremony of DDOR’s historical contributors.

To begin with, DDOR is rooted in Novi Sad and Vojvodina, but it is a leading national player with a strong foothold in all the country.

Secondly, I strongly welcome the progress in terms of infrastructure that we can all observe in Serbia, although there is still a way to go. But the political commitment to continue investing and enhancing the physical and digital infrastructures is there, as it has been recently disclosed with a development plan called “Leap into the Future – Serbia 2027”, worth Euro 17.8bn, which will certainly unlock part of the hidden value in the local economy.

Last but not least, I’m still too green in the country to truly appreciate and identify the main differences between the two cities, but I certainly praise the extremely high level of talent, skills and passion which qualify so many professionals in these two places. At DDOR we keep investing in the human capital which represents a critical success. As a matter of fact, we acknowledge the role played by all the DDOR employees who have actively contributed to determining what DDOR is today, and in order to demonstrate our gratitude we have launched the employees’ Jubilee celebration.

Serbia is experiencing an unusual phenomenon: from being a country of emigration, it is witnessing increasingly large immigration flows, especially from Asia. Furthermore, no less than 200,000 Russian citizens have arrived in Serbia in the past two years, often with the prospect of staying in the country long-term.  What are your predictions? How will the market change in relation to this phenomenon?

Migration flows are driven by several factors, that fall outside the scope of activity of the insurance companies. Certainly, this is an issue that requires a careful forward-looking approach and mindful long-term economic policies at the political level. The reality is that, as insurers, we continue being focused on our core business, trying to deliver first-class products to respond to the customers’ needs and we want to offer every reason to remain our client or to attract new ones, regardless of nationality.

What are the goals and what impact do you hope to have achieved in DDOR at the end of your term?

Let me quote Phil Jackson: as managers, the most we can hope for is to create the best possible conditions for success, and then to let go of the outcome. And this is what we all do at DDOR, every single day, and we’ll continue down the same road in the future, maintaining the same passion, ambition, “hunger” and willingness to make a difference in anything that we do.

interview by Biagio Carrano, translated by Snezana Rakic

Francesco Masci was born in Perugia in 1979. After graduating in economics with honors from Bocconi University, he spent most of his career in Investment Banking, covering the Financial Institutions sector, mainly in Mediobanca. In 2016, he joined UnipolSai Assicurazioni, where amongst other things he held the position of Head of Mergers and Acquisitions. He has been a member of the Supervisory Board of DDOR a.d. Novi Sad for a couple of years and afterwards, he took over as Chairman of the Executive Board in February 2022. 

Mr. Masci is member of the Board of Directors of Confindustria Serbia and member of the Board of Directors and Deputy Chairman of the Italian-Serbian Chamber of Commerce. 

He loves pop music with U2 and Vasco Rossi being his favorite artists. Mr Masci is a soccer and basketball fan and roots for Inter Milan and the Los Angeles Lakers. He’s married and he has two children.

This post is also available in: Italiano

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