The importance of a consistent multinational claims service

A consistent claims service is essential for multinational clients wherever in the world a loss occurs. The aim of a claims service in the event of a major catastrophic loss is to minimise the impact of business interruption, preserve brand and reputation, and work closely with all parties involved to get clients’ facilities and operations back up and running as quickly as possible.

The significant growth of multinational insurance programmes in recent years reflects the increasing sophistication of multinational companies’ approach to operational risk management and risk transfer. The growth is also indicative of financial controllers’ and risk managers’ understanding of the benefits that controlled master programmes can bring.

Global reach

Only a handful of insurance carriers are able to properly structure multinational programmes that truly respond to clients’ local needs. This is primarily due to the requirement for a global reach, and the expertise needed to help clients navigate complex local regulatory and compliance requirements. Key among multinational insurance buyers’ demands is the need for contract certainty at inception and a claims process that delivers a seamless and globally consistent client experience wherever in the world a loss occurs.

These two demands are interlinked. Should a loss occur on the day of inception of a multinational programme and a local underlying policy has not been issued in the relevant country, it could lead to coverage uncertainty and unnecessary lengthy delays in the claims process, including claim registration, coverage determination and in some cases claim payment.

Failure to have a local policy issued by inception can also be seriously detrimental in those countries where ‘cash before cover’ regulations apply, or backdating of policies is not allowed. In these instances, there will be no local coverage for the loss if premium has not been paid or the local policy has not been issued when the loss occurs. Attention will then turn to whether the master policy can cover the loss and, if covered, whether insurance proceeds are able to be paid to the local insured or parent company.

Local v master

Another issue that can arise when handling a claim under a multinational programme is where a local policy does not provide full coverage for a loss. When this happens, the local claims handler will work with a claims handler in the office where the master policy was issued, to review and determine coverage under the master policy.

Claims handlers from each office will collaborate and exchange information until a resolution is reached. To ensure consistent messaging, they will also agree which handler has the responsibility of communicating with the client during the life of the claim.

The objective is to provide a consistent and efficient standard of service so that the client’s expectations are met, regardless of when or where the loss has occurred. In so doing, claims handlers help preserve the client’s brand and reputation, mitigate losses and enable business facilities to resume normal operations as quickly as possible.

Country to country, there can be nuances from a regulatory perspective with respect to claims handling, that might vary. But from a macro perspective, the best practices in place for claims handled under a multinational programme should be followed on a global and consistent basis.

Efficient claims handling

There are many challenges to be faced when handling claims within a global insurance programme, but one of the most important elements is for detailed discussions to take place with the client at the outset. Determining the best solution for the client to produce the most appropriate policies supported by clear and comprehensive protocols that are properly communicated, enables the most efficient claims handling service to be provided.

In an increasingly global and interconnected world, the past decade has seen a steady shift towards multinational insurance programmes and this is expected to continue. For large global corporate insurance buyers, the benefits of a controlled master programme are clear. They maximise global insurance capacity and reduce complexity, while maintaining centralised control over risk management and risk transfer practices.

Multinational insurance programmes also allow claims to be handled in an efficient and compliant manner, wherever in the world a loss occurs. From the examples of last year’s significant hurricane losses to individual complex claims, such as the South American gas explosion, it is clear that people are at the heart of delivering high standards of service when it comes to processing claims for multinational clients.

It is often said that claims are the ‘shop window’ by which the industry is judged. By delivering a seamless, high-quality claims service for multinational clients, we aim to continue to support the growth in demand for multinational programmes and the more consistent approach to insurance coverage and claims handling they provide.

Contributed by Justin Andrews, regional multinational claims manager for EMEA, Anastasia Moody, regional multinational claims manager for Asia-Pacific, and Alan Petitt, regional multinational claims manager for the Americas, AIG.