Herve Borel-Efficiency is all

Tony Dowding (TD): In general terms, what do risk managers want and expect from their global programme? Hervé Borel (HB): In my view, the use of global insurance policies is firstly to ensure consistency of coverage throughout a group. Secondly, to leverage the group's insurance purchasing power in terms of coverage, cost and claims, and thirdly, to avoid the local purchase of redundant policies and promote the insurance buying strategy of the group. TD: What do risk managers want from their insurer and broker?hideHB: Efficiency in the deployment of the programme, prompt issuance of documentation (local policies and certificates), local and global assistance from the broker in managing claims, reporting from broker and insurer on policy issuance, premium issuance and payment and claims. In addition, we expect from our broker advice on compliance of our policies with the insurance clauses of commercial contracts which the group signs. TD: What sort of information does the risk manager need from the group and its overseas subsidiaries to enable decisions about global programmes? HB: We will require a good understanding of the operation of our group in a given country to determine if the deployment of our group policies in the country is necessary. In some countries where there are limited office or commercial operations we will not deploy so as to avoid the minimum costs imposed by this deployment. TD: Who is and should be responsible for compliance? HB: Compliance with taxation of premium is the responsibility of the insurer. Of course, the insurer relies in part on information supplied by the insured. Compliance with the decision to insure locally or not rests with the insured, but in this the insured relies on information obtained from insurers and brokers. TD: How can problems with claims under a global programme be solved or avoided? HB: Our experience is that the more the claims management function is centralised the more efficient it is. TD: How can global programmes be used to more effectively manage risk and avoid claims in the first place? HB: Global insurance programmes do not help reduce risk. Global risk management programmes do. Our company has centralised the management of its property, cargo and environmental programmes. We also have strict contract management and EHS procedures for the management of liability risks and work-related accidents. TD: How have the insurers and brokers changed their offerings? Have there been any significant changes in the type of coverage offered to buyers? HB: There has been no significant innovation for global insurance recently. The reporting process both from insurers and brokers seems to be improving with a more efficient use of technology. TD: What are the key factors when balancing cost versus cover versus compliance? HB: Our strategy is to purchase the broadest coverage available from the market but with significant retention or deductibles. When assessing the need to deploy our programmes in a given country, the local needs prevail. If, because of costs or difficulties in deployment of the programme or because our operations are small or not exposed, we will be satisfied with a local policy. TD: Is a global programme more suited to just standard property and casualty lines or is there scope to include other classes, such as D&O, environmental, product liability, marine cargo, etc? HB: Property, liability (both general and products) and cargo are well suited to global policies. D&O for the corporate side does not need a global but the needs of directors and officers of subsidiaries in countries other than the head office country can be addressed by local policies reinsured into the global. Workers compensation, employers' liability and auto are not suited to global policies (although I am told that pan-European auto programmes work). Environmental liability is less suited as insurers do not want to sell the same coverage across different geographies. TD: Have you found difficulties with information on compliance, with different views from different insurers and brokers? HB: The main differences in information on compliance has emanated from insurers, some of whom have taken a very strict approach, others a more relaxed attitude. Although it does seem that views are converging. TD: Do you support the move by Airmic and Ferma to create a global insurance compliance database? HB: I support this [but] I am not sure that they have the resources to bring it to completion. Any solution would have to involve multinational insurers. But I would see why insurers (or brokers) would be reluctant to cooperate in such an endeavour, they would lose some of their competitive advantage. TD: What one thing would make your life as risk manager easier when it comes to global programmes? HB: My main requirement is prompt reporting of all information on the programme, be it issuance of documentation, premium payment, claims declaration and management. TD: In your role as a risk manager, if you could have a superpower, or be a superhero, who or what would it be? HB: My superpower would be the ability to predict Black Swans.

Herve Borel-Efficiency is all

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