Global programme compliance improving, but more can be done–UK

Compliance has been a hot topic for global insurance programmes and the situation has been improving, according to Kathryn Wallin, Senior Manager, Insurance–Europe, Risk Management Department at Marriott Hotels International Ltd. “There is now much greater awareness of local compliance and frameworks to ensure that local policies do what they are supposed to do. There has been an industry effort with brokers, insurers and risk managers working in collaboration to get a better global insurance programme solution,” said Ms Wallin. However, compliance remains open to substantial interpretation, she said. “There is no black and white with compliance, so the industry will continue to do what it thinks is right for now. Until there is a huge fine imposed on a company for non-compliance things will not change. There is no case law to cement the best way for companies to comply,” she said.hideCompliance will always be a challenge, made harder by varying national rules and regulations that can often be vague, explained a risk manager at a leading UK Plc who wished to remain anonymous. “The solution would be an international freedom of services agreement for risk transfer, but that will not happen anytime soon,” she said. “There is now much greater knowledge and willingness among buyers to tackle this issue head on and demand compliance,” according to Paul Hopkin, Technical Director of UK risk managers’ association Airmic. “Compliance has been improving and there is an increasing willingness to be more compliant, even if it means buying more local policies,” he said. While a lot of work has been done on compliance and transparency has improved, the movement of money and the efficiency and speed in which cash moves is still a problem for global programmes, said John Hurrell, Chief Executive of Airmic. “There are also issues with the levels of local expertise and service, which do not always match up to international standards,” he said. Other risk managers agreed with Mr Hurrell, noting that movement of money and consistency of service across insurers’ networks could be improved. “There is room for insurers and brokers to improve the movement of money. It needs to be quick and painless,” said Clive Clarke, Group Insurance Manager, Lloyd’s Register Group Services Ltd. Insurers can also do more to build their international networks, according to Mr Clarke. “An insurer may issue 60 policies well, but it can all fall down with one country. Most insurers could improve the strength of their network and improve the consistency of service across the network,” he said. According to John Ludlow, SVP and Head of Global Risk Management at InterContinental Hotels Group Plc, more risks need to be added to the global programme to reduce local buying. He also calls for more innovation for new risks. “Better products need to be offered by insurers working closer with risk managers to understand and meet their needs,” he said. Building a partnership with global programme insurers is also the advice of Chris McGloin, VP Risk Management & Insurance at Invensys. “Make sure that you have a long-term relationship with your insurer that is contractually binding, that way they will stick by you when things go wrong,” said Mr McGloin. “It also means that insurers will get greater knowledge of a company and its risks, while the insured should get more certainty of cover and help with emerging risk,” he said. “Both parties can grow the partnership,” he added. Companies need to work with insurers that understand how global programmes work, said Mr Clarke. “You need a good team that stays in regular contact,” he said. Partnerships are likely to become more important as global programmes become more complex. In particular, supply chain risks are still an issue for multinational programmes, according to Mr Hopkin. “An insurance programme needs to follow the risk, but as supply chains become more complex, so will the insurance. The efficiency of international insurance programmes will be a challenge,” he said.

Global programme compliance improving, but more can be done–UK

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