Setting the standards

Transparency is a major issue – and a significant challenge – for clients in terms of their global programmes, a leading broker has warned.

Ailsa King, chief client officer, UK and Ireland, Marsh, admitted: “Where carriers have a dedicated multinational team, we see a significant difference in performance, in terms of deliverables and service. This mirrors the approach that Marsh takes with our multinational client services teams around the world, who work closely with multinational insurer teams to drive and improve on the ground, with the aim of providing global buyers with the transparency and contract certainty they need as regulatory change in all regions accelerates.”

She said there is increasing demand from multinational clients, who want transparency of coverage, earnings and service quality in each of their local geographies.

“As insurers withdraw or limit cover in certain territories or lines of business, it’s increasingly important for clients to be able to access in-depth analysis and advice as coverage changes in challenging market conditions,” Ms King stressed, adding that more business is coming into global hubs – such as London – where there is the expertise and depth of experience to tackle this issue.

And she added: “As a result of the growing complexities of global programmes, the challenges associated with current market conditions and the Covid-19 pandemic, the world feels smaller.”

Shiwei Jin, global programmes and captives regional director APAC, AXA XL, agreed: “The easier insurers make it for their network to implement local policies, the better for everyone. A robust network governance mechanism is critical to ensure consistent quality of services across owned offices, affiliates and third-party partners. When it comes to affiliates and partners, we see the strategic importance of having network hubs, which have similar cultural and language perspectives, local timezones and global oversight, combined with local knowledge and strong relationships that can help to solve any service-related issues quickly.”

She suggested: “Early engagement on change management for regulatory, personnel, system or process changes, close monitoring and issue detection and resolving, regular review and audit on insurance documentation issuance, premium payment and claims handling, as well as having a special channel in place for escalation and special support, are all key components of a well-functioning governance mechanism.

“And most importantly, it’s a people business. Establishing, maintaining and enhancing close and beneficial relationships at all levels of the network (executive, function heads and day-to-day management) is critical. Being able to have candid communication is key to such relationships.”

With the hard market, the conversation has inevitably turned to alternatives, such as captives. For Ms Jin, captives are at the centre of global programmes from a risk-pooling perspective, which affords them a broader choice of terms and conditions, capacity and carriers, all of which she believes ultimately improves the service.

“Captives can fill the gap and therefore enable the local required deductible levels, which might be challenging for the global programme carriers to access. Such ‘stepping in’ by captives could be on any coverage gaps or intangible risks, or to increase captive capacity and widen the available market of global programme carriers.”

Ms Jin admitted: “The traditional market can be slow in meeting new needs and providing coverage for new and emerging risks, particularly where data does not already exist. In such instances, captives can be used as risk incubators to collect data on these risks and to help bring the traditional markets in to assist. The related coverages can be fully pooled into captives with no retention at the programme fronting partner.”

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