A combination of strong management, local expertise and ongoing collaboration between client, broker and insurer are key to success for global programmes, according to Eric Maumy, CEO at France-based broker Verlingue, a member of the Worldwide Broker Network
Global programmes are fast becoming a core tool in the management of corporate risks for the fast-rising number of French and European companies with international operations.
However, this is not a simple area to manage. Risk managers rely heavily on their broker to make sure the programmes are compliant and that claims are paid when and where they are supposed to be.
This year’s European Risk Frontiers survey asks Europe’s risk managers what risk managers, brokers and insurers need to do to ensure that international programmes work as intended.
Eric Maumy, CEO at France-based broker Verlingue, said new risks and their global dimensions have a direct impact on how companies should design and handle their international insurance programmes. He added that Verlingue believes effective management of global risk relies on five essential elements.
The first is a need for a structured risk identification approach to fit the specific needs of each client.
“The international dimension of a company with cross-border operations—whether it’s in three countries or 30—can expose it to unknown, new or underestimated risks. The collection of all local data such as activity descriptions, IT process description or industrial process description, loss runs and current insurance documentations is the best way to an efficient and thorough analysis essential for drafting insurance solutions,” he explained.
The second key element is an up-to-date knowledge of each country’s local regulations, legal requirements and cultural differences.
“The increasingly complex challenges of international insurance management include being aware of and complying with countless local regulatory demands and obligations. Unexpected taxes, legal requirements, non-admitted policies, local insurance obligations or cash-before-cover obligations are some examples that companies need to comply with. If these areas are ignored, or if the customer or broker is unaware of these local realities, it can lead to heavy sanctions or penalties or a refusal of the right to carry on operations in the country.
Local regulations evolve and it is critical to update each client’s knowledge of them,” said Mr Maumy.
The third essential element is data management and communication.
“A global data management system to meet the demands set by experienced international clients, brokers and insurers is essential.
Multiple languages, currencies, easy access and uniform reporting are expected features for enjoying secure access to shared client data, projects, policies and service activities,” explained Mr Maumy.
Fourth is the need for strong expertise to design innovative insurance structures.
Mr Maumy said all international companies need to have access to the full spectrum of insurance options. These range from standard international insurance architecture, such as global programmes combining a master policy with locally admitted policies placed in the local risk locations, to tailor-made innovative solutions, he explained.
And, finally, a strong global network that really works is a critical element, said Mr Maumy.
“The ability to coordinate a client’s global risk exposure on a centralised basis is pivotal. The combination of local delivery through an international and responsive network with centralised global oversight and management, enables clients to stay informed day-to-day on the management of their coverages all around the world, while monitoring the implementation of their risk management strategy,” he explained.
In conclusion, Mr Maumy said risk management and transfer is a dynamic process. “It requires a strong partnership between client, broker and insurer. We believe the key is a combination of strong management, local expertise and ongoing collaboration between the client, broker and insurer,” he said.
Extract from Commercial Risk Europe | European Insurance & Risk Management News | May 2016