Ten tips to help brokers place complex multinational programmes

ACE Group outlined 10 tips for UK brokers on the intricacies of placing effective, compliant multinational insurance programmes at the BIBA 2015 Conference and Exhibition last week.

The 10-point guide was created following the launch of ACE Multinational Partner, a package cover for UK-and-Ireland-based companies with one or more overseas subsidiary. The insurer’s market research found that brokers expressed concern about a lack of knowledge and expertise in placing complex multinational programmes.

ACE European Group multinational partner project team member Jeff Hobson said: “Our research shows that regional brokers in the UK are keen to expand their knowledge of multinational programme 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.”

ACE’s 10 tips for brokers managing multinational insurance programmes are:

1. Take a bottom up approach: when building a global programme, look at each territory individually and ask “what does the insured need in the event of a loss?” Structuring the programme around the answers will enable you to respond to your client’s individual needs.

2. Challenge your insurer partner: service is key; so challenge your insurer partner to deliver on global service for your client. When will it issue local policies, certificates and invoices? What service standards do you want in place? How will it help you monitor programme data in real time?

3. 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? Where will the claim be paid?

4. Do not 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 and health, marine and other specialist lines placements.

5. 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.

6. Think local: local policies are not concerned only with compliance, they provide local market standard cover and are often required for local territory certificates and travel visas for example. It is important these needs are taken into consideration when structuring the programme.

7. Demand transparency from your insurer partners: your client will need evidence of programme 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.

8. Put all your eggs in one basket: one comprehensive, well-structured multinational programme performs better than multiple policies in multiple jurisdictions placed with multiple carriers, especially where your client has interdependency between territories.

9. Consider both cost and benefits: multinational programmes may appear more expensive at first sight, but in the long term they are more cost effective as they give greater certainty and consistency of coverage and service.

10. 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. Do not worry if you do not 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.