Getting the benefits of international programmes – AXA Q&A

CR Asia: What are the challenges of building an international programme? GP: The fact is, for many companies in Asia, insurance has yet to become the strategic financing and risk management tool that it is in other regions. We regularly deal with companies rivalling their European or American competitors, sometimes even with global sector leaders, whose group insurance managers lack control over insurance matters when it comes to their own overseas entities. Yet they may inquire about insurance programmes. There comes the point: without appropriate global governance and adherence to the concept of international programmes, successful implementation is not possible. As a prerequisite, both the insurer and the broker must be organised to deal with an international programme (in-house expertise in global and local requirements and cross-border insurance, network, IT and so on). Then, on the client side, an organisation mirroring the broker’s and the insurer’s will ensure smooth deployment and running of the programme. hide CR Asia: What are the necessary steps for building an international programme? GP: From the insurer’s perspective (and like any insurance protection), the first step is the collection of the risk information and the understanding of the risk. The broker plays a key role by gathering this information on one hand and on the other, helping the client in identifying their needs at the global level, in the case of international programmes, locally. Then, depending on the programme characteristics, the specific local requirements must be identified, understood and explained if necessary and accepted (be it cash before cover, mandatory pools contribution, reinsurance taxes, mandatory wordings or wordings restrictions, free of service, non-admitted cover rules and so on). This should happen as early as possible: indeed, anticipation will prevent misunderstandings. CR Asia: What would be the pitfalls of an international programme in its early stages? GP: Even if all of the above conditions are met, an international programme in its early phase will require an adjustment period by all parties. This is a three-way relationship and if you add the local entities, this makes each combination unique. Time is required to reach the cruising speed and the ultimate expected, comprehensive, consistent, smooth cover and claims management of the client’s global needs. The more anticipation and communication at the early stage, the earlier the programme will deliver. CR Asia: Could you summarise the advantages of an international programme? GP: 1) Clients talk to one insurer and one broker for the entire, global perimeter covered by the programme. 2) It simplifies the implementation of a global risk management philosophy. 3) It enables a centralised control and management from the client’s holding company. 4) It guarantees a consistent scope of cover and contract conditions. CR Asia: What should an insurer do to be a suitable partner for an international programme? GP: We lead 1,700 international programmes across all continents. To do so, we need: the right people and expertise, built over the last two decades; a large and reliable network with risk engineering capabilities; an efficient global policy management tool, enabling easy policy, premium and claims management; a constant global and local monitoring of the insurance and reinsurance environment; the ability to monitor the programme performance and give feedback to the client and broker. CR Asia: How can risk managers explain to their organisation the added value of an international programme in terms of risk knowledge, control and management? GP: An international programme brings many advantages. Of course, the global centralised mapping and management of the client’s risks is in itself an immediate benefit. And having one place to deal with all insurance matters is a huge time-saving advantage, compared to having the same kind of discussion duplicated in each separate entity and creating heterogeneous cover and pricing. Also, the insurers tend to see clients’ risks as a portfolio rather than a single policy. This gives more leverage for the client and makes claims negotiations easier. But one sure way of conveying a convincing message is to reach out to clients that have chosen to adopt an international programme and listen to their experience.

Getting the benefits of international programmes – AXA Q&A

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