How to get the most from an international program

Ian Long, Head of International Program Proposition, and William Porter, Head of International Programs – Americas, explain the pros and cons of having an international program and how technology can help corporates get the most from one.

Ian Long (left), Will Porter (right)

How does an international program offer a corporate more control over its insurance?

Ian Long: With just one insurer as point of contact, an international program can coordinate a corporate’s insurance needs across countries. A global insurer can help the corporate customer to understand, and therefore minimise, any gaps in coverage. It’s also much easier to see what is taking place across the entire program.

It can also provide corporates with consistency and peace of mind, by providing the broadest coverage available. They receive the benefit of DIC/DIL and Financial Interest coverage, working together to ensure the coverage extends to all a corporate’s exposures worldwide.

How does a captive work within an international program?

Will Porter: A captive can bring new levels of flexibility to an international program and occupy different roles, depending on what the corporate wants to achieve. It can carry risk within the program, issue certain policies (subject to licence restrictions), or even coordinate the entire program.

A captive can be a key part of a corporate’s risk retention strategy, allowing it to retain some of the risk while a fronting insurer supports it and provides the licenses. It can also help the corporate to coordinate its co-reinsurance panel if it wishes to be directly involved.

Running a captive can help a corporate reduce the overall cost of managing its risk, as well as protect it from some of the market’s cycles.

How can insurers help corporates persuade their local operations of the value of an international program?

IL: Firstly, a global insurer needs to offer the same quality service that a business unit would receive from a local carrier. It’s important to avoid unexpected costs by ensuring that allocations are completed ahead of time or supporting the customer in its central funding approach. Also, local operations need to have a clear understanding of what is – and isn’t – covered under an international program. But local policies must also address the risks they face and respect the local market practices.WP: When the servicing, costs and coverage challenges have been met, we work with our customers to help them demonstrate an international program’s benefits. How can it help a corporate to achieve its enterprise risk management goals, is a question that’s often raised.

Local operations gain from the international program’s insurers’ advice and expertise...

... and take advantage of participating in risk management initiatives across the whole company. They often benefit too from a global premium allocation, where those operations deemed to be higher quality risks are rewarded with a lower allocated cost of insurance.

Can corporates better manage their biggest exposures through an international program?

WP: I think it’s easier to spot trends because data is consolidated. Also, it gives the risk manager an opportunity to benchmark. International programs also typically provide the highest limits and broadest coverage, since buyers have access to a broader pool of carriers, and, often, build a program with multiple participating carriers.

How can technology improve the service provided by international programs?

IL: Communication, compliance and control are critical elements within international programs, so it’s vital that everyone in the value chain can communicate effectively to deliver effective cross-border risk management. We made sure to address these needs when developing our technology.

Our PULSE portal, for example, enables everyone in the network to see the same information and collaborate on any solutions from one place.

It gives everyone involved real-time information, making the process more efficient and eliminating any mistakes.

It ensures that underwriters have all the information at their fingertips, and that the information can be shared, so they can work with the corporate and its broker to design and structure the ideal program.

How can technology help with data collection and provision?

IL: Collecting the data needed by brokers and carriers is one of risk managers’ key pain points in the renewal cycle. That data then often needs to be cleaned up by the broker and each insurer while reviewing the submission, creating further delay and inefficiency.

There are information collection mechanisms that can ease the flow of data. But the best solution would be to build API gateways into the international program platform, so data can be freely shared without tying everyone to set formats.

Can technology, such as blockchain, help to ensure contract certainty?

IL: Although the potential is undoubtedly there, there’s a need for standardisation so that blockchain can work at scale. But there are other areas where technology can help create contract certainty as well as an understanding of a program’s policies and progress. Natural language processing, for example, can compare local policies within a program with the master policy. We have used this technology to help deliver customised solutions in our international programs, such as translating specific endorsement language for specialised coverages onto our local policies.

How else can insurers improve the reputation of international programs?

WP: It takes transparency, consistency and collaboration to change a reputation. Carriers need to be willing to share what works – and what doesn’t – backed up by data on their own performance. They must also work with the customer, so the program and service meet its needs.

Carriers need to manage corporates’ expectations, by being clear about what can be done during the structuring process – particularly, what it takes to deliver the requirements. Collaboration and commitment are the foundations on which are built the trusting relationships needed for international programs. We have taken it a step further. The world is more interconnected today.

We want to leverage that new technology in the international programs we build and manage for our customers.

Originally published in Commercial Risk on 9 August 2021 – Read here

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