International Programmes: greater transparency and less complexity – is it possible?

Zurich Commercial Insurance, one of the global leaders in the international insurance space, explains the major challenges of its large global customers whose international property programme is placed all over the world, and looks at customers’ expectations from insurance carriers like Zurich.

“The challenges are many and varied. To name just a couple: global certainty of coverage; consistent delivery of claims and risk engineering services; regulatory, fiscal and tax requirements being met in all countries; and the ability to move money quickly and efficiently,” says Petra Riga, head international sales & distribution, Zurich Commercial Insurance.

Our customers desire globally aligned, controlled master programmes for all of their exposures worldwide. This comes with many benefits including cost efficiencies, control and oversight, and contract certainty. And they expect these solutions to be sustainable.

As a trusted insurance partner, we need to keep on top of today’s challenges, investing significant effort and resources to understand the global landscape and design innovative solutions that can deliver to customer expectations.

In addition, we believe there is also an expectation from our customers to not only react to the situation and provide products but to actively engage and represent their interests on topics such as regulation and industry practice. We have a responsibility to drive the agenda and remove complication from the process.

What efforts is Zurich taking to respond to these needs?

Global insurers – like Zurich – that offer international programmes must have the expertise to understand and to deal with the issues that affect today’s multinational programmes, and should maintain local presence in the major jurisdictions where multinational enterprises have interests.

Martin Strnad, head, legal commercial insurance, attorney at law at Zurich Commercial Insurance, comments: “Buyers of international insurance programmes are sophisticated multinational corporations operating in a wide variety of industries with production facilities, offices, investments or other interests located around the globe. Their risk managers purchase insurance coverage for all their exposures worldwide and it has become the favoured approach to purchase worldwide insurance programmes centrally from one insurer. The legal relationship between the multinational corporation as insurance buyer and the underwriter, who strives to insure the multinational corporation on a global basis, became more complex. In order to ease the complexity and to be able to offer solid solutions, the legal and tax landscape must be laid out thoroughly.”

Zurich Multinational Insurance Application (MIA)
Many countries do not allow corporations to purchase insurance from an insurer not authorised to conduct insurance business in that country. It has proven useful therefore, to equip underwriters with applications, allowing them to quickly identify legal and tax requirements. One such tool is the Zurich MIA, which helps to ensure consistent tracking and monitoring of local legislation and provides the necessary information to make educated decisions.

One area of complexity with regard to multinational insurance programmes is due to worldwide usage of contract wordings, terms and conditions and the fact that the meanings vary locally. Do words and terms have the same meaning to each stakeholder in all jurisdictions, in building up an international programme?

Zurich Prime International Property Damage and Business Interruption
Recently, Zurich introduced a worldwide standard wording for international property damage and business interruption programmes. The solution is designed to bring a wide range of benefits to our customers’ international insurance programmes, including improving transparency and consistency, and bringing more clarity about agreed terms as well as faster and more efficient issuance of policies.

Using standard wordings and the same terms and conditions around the world provides an overview of what is covered across all policies. It also provides consistency between the master policy, the local policies and the integration of essential local regulatory, tax and legal requirements. Agreed and clearly stated terms result in reduced wording, claims leakage and error rates, and also reduce the risk of unexpected difference in conditions/difference in limits or other unexpected coverage outcomes.

Risk managers ask for a predictable and accurate master policy that they can rely on, so this solution avoids surprises after a contract has been signed. As the wording is part of the quote, all contractual parties know what they are getting. The policy will typically have the same coverages in most countries, which removes the need for a cost-intensive tailor-made wording, which is another advantage of this way of working.

A standard wording, with reliable and clear terms and conditions, allows fast and efficient issuance of policies, helps to maintain an overview of policies in multiple countries and reduces administration, time and costs.

What is your expectation? Where will Zurich be with globally consistent propositions in the years to come?

The need for international solutions will not go away; our role is to remove complication from a complex topic and make these solutions available to all, whether you are in two countries or 200. The move has to be towards a simplified approach, engaging with regulators and industry committees to find solutions.

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