When ACE Group last month launched ACE Multinational Partner, a package cover for UK & Ireland-based companies with one or more overseas subsidiary, it discovered that brokers were concerned about lack of knowledge and expertise in placing complex multinational programs.
As a result of that concern, ACE has developed 10 top tips for brokers who want to successfully manage global programs, which it released at this week’s British Insurance Brokers’ Association (BIBA) 2015 conference and exhibition in Manchester, England.
An ACE representative said the list below is applicable, not just for UK brokers, but also for mid-sized and smaller regional brokers across the globe. The list is designed to help brokers navigate the difficulties of multinational business placements:
- Take a bottom up approach. When building a global program, look at each territory individually and ask “what does the insured need in the event of a loss?” Structuring the program around the answers will allow you to respond to your client’s individual needs.
- Challenge your insurer partner – service is key. Challenge your insurer partner to deliver on global service for your client. When will they issue local policies, certificates, and invoices? What service standards do you want in place? How will they help you monitor program data in real time?
- Give consideration to claims handling at an early stage. Quiz prospective insurers on how they would handle a loss overseas. Can local claims teams provide support on the ground when needed? How will they ensure the client management team is kept up to date? And where will the claim be paid?
- Don’t forget your clients’ risks. Compliance with local regulations applies to niche risks too. One central policy will not respond to all eventualities in all territories. Discuss with your client the need for local policies for their D&O, accident & health, marine and other specialist lines placements.
- Think compliance. Non-compliance with local regulations can potentially result in fines, loss of licence, reputational damage and business interruption for your client and for you. Ensure you have reliable sources for compliance guidance, and keep up to date with changes.
- Think local. Local policies aren’t just about compliance, they provide local market standard cover, and are often required for local territory certificates, travel visas etc. It’s important these needs are taken into consideration when structuring the program.
- Demand transparency from your insurer partners. Your client will need evidence of program compliance, everything from visibility over premium allocation, to local taxes and charges, to what the local policy wording and certificates say. Challenge your insurer partners to provide this transparency.
- Put all your eggs in one basket. One comprehensive, well-structured multinational program performs better than multiple policies in multiple jurisdictions placed with multiple carriers, especially where your client has interdependency between territories.
- Consider both cost and benefits. Multinational programs may appear more expensive at first sight, but in the long run they are more cost effective as they give greater certainty and consistency of coverage and service.
- Take a team approach. Make sure the right level of visibility, procedures, controls and communication processes are in place, and there is constant communication involving all parties. Don’t worry if you don’t have all of the answers yourself. Be prepared to pull in knowledge where required to build the right team for your client. This is likely to include a partner insurer, and brokers in other territories.
Jeff Hobson, ACE multinational partner project team member, ACE European Group, said:
“We know from our research that regional brokers across the UK are keen to expand their knowledge of multinational program placement because more and more of their clients are expanding overseas for growth. However, cross-border policies are a complex minefield that many find hard to navigate.”
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