You might be thinking about insurance too late

Across global insurance markets, conditions are shifting. Rates are softening, capacity is expanding, and customers are increasingly willing to move their insurance programs to alternative carriers in search of cost optimization. For buyers, this trend represents an opportunity to secure more competitive terms and pricing.

 

For brokers, the environment offers a chance to demonstrate expertise, leveraging market knowledge and relationships to deliver the best coverage and conditions for their clients.

 

For insurers, however, the challenge is clear: retaining business while remaining flexible on price will be a defining theme. Yet, with more options on the table, negotiations are becoming longer and more complex. Extended discussions and delayed decisions introduce a new layer of risk during the renewal process, one that all parties must recognize and address proactively to avoid unintended exposure.

 

Timing and Compliance – Why it Matters

 

The insurance world never stands still, and neither does legislation. Recently, we saw a major shift in China: a long-anticipated change, implemented swiftly, requiring cash before issuance. In markets like India and Japan, similar rules have been in place for years, and local players are well accustomed to them.

 

For most multinational programs, even when binding occurs close to the renewal date, the process typically runs smoothly without coverage gaps. However, these regulatory changes highlight the importance of timing and compliance in global renewals, especially when programs span jurisdictions with differing requirements.

 

With the recent change in China, the market faces an immediate need to adapt. Local insureds, brokers, and carriers must overhaul their processes to comply with the new requirements. Similarly, when renewing multinational programs, Nordic policyholders, brokers, and insurers must factor this in, allowing sufficient time for local parties to invoice, settle, and issue contracts.

 

China remains a critical market for many Nordic companies, with numerous local policies forming part of multinational programs. These renewals often involve multiple invoices and require confirmation from local insurers or brokers before issuance. This additional complexity underscores the importance of early planning and coordination to avoid delays or coverage gaps.

 

Reducing Renewal Risk: What We Can Do

 

On many multinational programs, acceptance of an insurer’s offer often occurs within the final two to three weeks before the renewal date. If negotiations extend beyond that, particularly when programs switch carriers, this window may not be sufficient to secure renewals in jurisdictions that require cash before issuance. In these markets, non-admitted insurance is typically prohibited, meaning local insureds cannot rely on master coverage as a temporary solution. This creates a real risk of coverage gaps if timelines are not managed carefully.

 

Adjust the Timeline – Especially where customers have local insurance needs in China or other countries with cash-before-issuance restrictions, customers, brokers, and carriers should move the timeline forward. This allows negotiations to conclude well in advance of renewal. Rolling out global programs before the renewal date is no longer an idealistic scenario - it’s becoming a necessary step to ensure coverage.

 

Highlighting Key Information – Insurance carriers typically have access to the most comprehensive data. At Zurich Sweden, we have developed a pre-renewal service pack that highlights countries with specific requirements and significant regulatory changes that could impact local renewals. This helps brokers and customers stay informed about their local insurance needs.

 

Early Collaboration – Insurance carriers’ Service Specialists and brokers’ Client Coordinators can no longer delay information sharing until renewals are bound, that luxury belongs to a bygone era. Sharing information well in advance, even if the multinational program ultimately moves to another carrier, helps ensure local policies are issued on time, even under tight deadlines.

 

 

For further information on how Zurich Nordic can help with multinational programs in a changing world, please contact John Smart, Manager Underwriting Services Multinational.