Parima steps up efforts to sort out global programmes

It has also agreed to carry out a survey on global programmes among its members, in partnership with the Federation of European Risk Management Associations (Ferma) in Europe and the Risk Management Society (Rims) in the US. These initiatives follow an earlier deal that Parima reached with global insurer Zurich to provide Parima members with free access to its regulatory database—the Multinational Insurance Application (MIA). Zurich’s MIA covers 180 countries and territories across 42 lines of business. It is updated with out-of-territory insurance laws and regulations, insurance premium taxes and regulations related to premium payment, claims payment, loss adjustment and risk engineering activities.hideThe AXCO database will also be delivered as a complimentary benefit of Parima membership. It includes insurance regulatory information on 100 countries worldwide and is delivered via a Q&A tool. “Answers to each of the questions are specifically designed to provide business-critical intelligence relevant to the insurance buyer. The database is intended to provide consistency of information, as well as assist the insurance buyer in undertaking relevant and informed discussion with their brokers,” explained Parima. The Insight Risk Manager tool was originally developed with Airmic following a heated debate on the matter at an event organised by Commercial Risk Asia sister publication Commercial Risk Europe in London in January 2012. European risk managers were becoming increasingly frustrated by the apparent inability of insurers, brokers and other experts to assure them that their global programmes were actually compliant. The insurers, brokers and other service providers argued that it is actually impossible to guarantee 100% compliance because so many national insurance and related fiscal regulations are vague and open to interpretation, constant change and political influence. Many risk managers argued, however, that it seemed that the international insurers, and to a lesser extent brokers, simply used the supposed uncertainty as a way of gaining competitive advantage in an increasingly valuable market. During the Commercial Risk Europe event, John Hurrell, chief executive officer of UK risk management association Airmic and Peter Den Dekker, then president of Ferma, agreed with leading insurers and brokers that, at the very least, the industry could agree on basic principles and information available to all insurance managers. The result was the launch of Insight Risk Manager in June 2014 at the Airmic Conference. Julia Graham, then Ferma president and now technical director at Airmic, said that Ferma would support the initiative to make the database available to all Ferma national member associations. Ms Graham said global firms seeking the benefits of international insurance programmes must navigate “staggering complexities in the placement, structuring and delivery of these programmes”. She added that Ferma was “convinced that the expert content delivered through Insight Risk Manager will equip European risk managers with a competitive tool to help address the key compliance concerns in the purchase of multinational insurance programmes”. Since then, US risk and insurance management association Rims has made the tool available to its members. Now it is made available to risk and insurance managers in the Asia Pacific region courtesy of Parima. Leading Parima committee members agree that more clarity and information on cross-border coverages is badly needed. David Ralph, who leads Parima’s Hong Kong chapter alongside his role as head of risk management and compliance at PCCW, the Hong Kong-based holding company of information and communications technology firm HKT Group Holdings, said that a global insurance programme is an extremely important part of overall risk financing strategy but one that causes “no end” of new and varied problems. He said information flow needs to be improved and pressure placed on the regulators to deliver more consistency for insurance buyers. “Most of the issues stem from the huge variance in regulatory regimes, many of which seem more focused on protecting the local insurers rather than protecting the purchasers of such insurance. We all (insureds, brokers and insurers) need to collectively and separately pressure insurance regulators to develop some form of global consistency for insurances, especially for large multinational risks,” said Mr Ralph. Stacey Huang, Parima executive director, told Commercial Risk Asia that the agreement signed with AXCO to make the database available to the association’s now more than 600 members was a big step forward towards meeting such concerns. “This is a great tool for risk managers and more and more people are using it as the default database for international programmes,” she said. The joined-up approach between Parima in Asia Pacific, Ferma in Europe and Rims in the US on this critical topic of global programmes is also reflected in the decision by Parima to take part in the survey on the matter being led by Ferma. The survey only involves six questions and can be completed in minutes but if sufficient numbers take part in Asia, Europe and North America, the results will be very interesting. Parima explained the reason for the effort as it invited members to take part. “As risk managers of multinational corporations, we are well versed with the costs and complexity associated with purchasing insurance coverage across multiple countries. In addition, the inconsistent regulation of insurance programmes adds to our challenge to comply [with] a diverse array of regulatory, legal and tax requirements. The risk associations in Europe, America and now Asia would like to hear from you on how this issue impacts you,” stated the Association. Parima assured members that the individual results would be kept anonymous, but added that the aggregated data “should help us—and interested policymakers—better understand how the fragmented nature of the international insurance marketplace impacts companies with a global presence”.

Parima steps up efforts to sort out global programmes

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