Increasing regulatory risks for global insurance programmes

Alex Gage, head of global programmes – specialty risks, Beazley, spoke to Global Risk Manager about demand for specialty products, increasing regulatory and compliance risks for global insurance programmes, and the impact of ESG regulations on such programmes.

In terms of the pricing environment for European multinational companies and their global programmes, are certain territories seeing harder market conditions than others?

Alex Gage: As a general global trend, we see a decline in rates and a softening market across D&O and cyber risks. Different territories may experience varying timings and extent; however, these trends seem to be consistent across the board.

Are multinationals increasingly looking for global insurance programmes and multinational solutions, or is there still a focus on local or regional solutions?

Alex Gage: Different jurisdictions have different compliance requirements and complex supply chains, and ultimately our customers are seeking reliable and consistent cover wherever they operate in the world. We are able to offer them that via a global programme. A tailored global programme is a key part of the toolkit for firms operating internationally; our customers find they are not only able to manage risk consistently, but also control cost and drive efficiency.

What sort of specialty products are insurance buyers from multinational companies looking for?

Alex Gage: At present, we see most demand for D&O (commercial and financial institutions [FI]), professional indemnity and crime (FI), cyber and medical malpractice. Customers would also love us to write property and casualty global programmes, but we don’t currently offer this cover yet.

How is the growing number of ESG regulations around the world impacting global insurance programmes and the insurance needs of multinationals? What specialty products are buyers looking at as a result?

Alex Gage: There is no ‘one-size-fits-all’ approach to dealing with ESG regulation, as there is no overarching global legislation for businesses to adhere to. This could create barriers to entry for many multinational businesses looking to grow and move into new territories. Risk managers for multinational operations need to work in partnership with their brokers and insurance providers to create holistic global insurance programmes that include appropriate coverage everywhere they do business so they can consistently manage risk regardless of the country or jurisdiction where a claim occurs.

Does rising protectionism globally mean it is becoming harder to establish a global insurance programme?

Alex Gage: Protectionism is a fact of life across the globe as regulators continuously seek to protect consumers and businesses alike within the confines of their own borders. Beazley’s global programmes are built with precisely such restrictions in mind, and we combine multiple insurance solutions, local capabilities and licences within a single package to ensure that clients are properly insured regardless of where their risks are located and whatever the global regulatory trends are.

Are insurance regulators taking a tougher approach on compliance when it comes to global insurance programmes?

Alex Gage: There is a real focus on effective corporate governance globally, and as a result we are finding that regulatory and compliance risks associated with arranging global insurance programmes are increasing.

Risk managers for multinational businesses need to be able to think globally with the ability to act locally. Differing approaches to ESG regulation globally presents a challenge for multinational businesses to be able to do the ‘right thing’, as it is growing more complex by the day to ensure operations comply with ESG and all other regulations in all parts of the world that they operate.

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