Multinational Insurance Programs – why they need to evolve

The latest edition of the Global Risks Report, produced by the World Economic Forum in collaboration with Zurich, provides a stark outlook on both short and long term risks. In light of the global events and instability, for international businesses it is important to ensure that hazards are understood, potential risks are tackled and mitigated in order to protect the assets and secure company operations.

Traditionally, a multinational insurance program would provide a solution for a company’s immediate worldwide insurance needs.  However, in an unstable world with widespread risks to a company’s prosperity in the medium and long term, it is important that policyholders consider insurers who closely monitor changes and ensure compliance, have robust global networks and also provide risk insights and data to better meet tomorrow prepared. 

What to consider when choosing a carrier for a multinational insurance program

Compliance

Changes in legislation and regulation may introduce additional risks when assessing the validity of insurance (contract certainty), as well as have tax implications. In recent years, many countries have implemented or modified their insurance taxation policies. Therefore, when selecting an insurer, it is crucial to ensure their offering includes compliant cross-border coverage solutions. Nowadays, insurers should go beyond the conventional cover solution mechanisms (non-admitted, FoS, FinC) and thoroughly explore any additional limitations imposed by the country's insurance legislation. This includes limitations on out-of-territory payments, claims handling, loss adjustment, and risk engineering. By considering these factors, insurers can tailor the most optimal coverage solution for a customer's business, taking into account their operational landscape and level of service requirements.

Network

In addition, the insurers must establish a vast and robust network not only to offer local services to customer subsidiaries but also to stay informed about local legislative, economic, or market changes. Recent developments, such as the new compulsory insurance for natural catastrophe perils in Italy, underscore the importance of having an insurance carrier capable of promptly adapting to new terms and proactively reassessing local insurance. Currency shortages and devaluations in various countries worldwide, as well as changes in local risk retention requirements, could continue to impact global insurance, which is of significant value to companies operating Captives. Furthermore, businesses must have confidence in their ability to rely on secure insurance providers at both the global and local levels. Therefore, it is crucial for insurance providers to actively manage their partner network, including implementing robust due diligence processes and country intelligence.

Digital capabilities

In today's digital age, it is crucial for companies to choose an insurer that has the capabilities to provide them with digital connectivity to the insurer's systems and platforms. Having online access to information should not only allow businesses to have 24/7 availability to their existing insurance program data, but also provide the flexibility to explore potential insurance coverage scenarios in new countries in case of business expansion.

For companies that frequently require Certificates of Insurance, it is ideal for insurers to have digital capabilities that support electronic certificate creation. The availability of risk assessment data, natural catastrophe (CAT) information, and risk scenarios is increasingly important. Therefore, insurers' ability to deliver such information should be a key consideration.

If an organization already has a risk management system (RMIS) in place, the potential insurer should offer an API (Application Programming Interface) solution for seamless, consistent, and real-time exchange of insurance data.

Zurich Multinational Insurance Programs

In a world full of uncertainties, businesses can benefit from leveraging the expertise and insights of insurance brokers and providers to better prepare for the future. Access to risk data and information can inform business decisions and go beyond immediate insurance needs. Multinational Program offerings play a crucial role in protecting global businesses and mitigating risks both now and in the future.

At Zurich, Multinational programs have been a core element of our business, driven by a strong vision, for over 50 years. We are proud of our ability to help protect businesses that operate internationally. We have built a powerful network of Zurich offices and insurance partner companies that gives our customers consistent, excellent service wherever they operate. To learn more about our offering, contact Elena Vernigora, Service Specialist for Multinational Insurance Programs.