The unstoppable rise of international programmes

Reto Collenberg and Ian Long of Swiss Re Corporate Solutions talk about how natural catastrophes, regulation and continued expansion are fuelling the growing demand for international programmes.

The demand for international programmes is on the rise. Globally, the market is worth somewhere between $75bn and $80bn in premiums – a figure that has been increasing between 5-8% on an annual basis, according to analysis by Swiss Re and Ernst & Young.

There are numerous reasons for this growth, according to Reto Collenberg, head of international programs, APAC and EMEA, for Swiss Re Corporate Solutions. The most obvious one is the continued international expansion of companies around the world in search of new markets and clients, especially the technology, pharmaceutical and manufacturing industries.

We are also living in a riskier world, from the heightened geopolitical tension to the worsening natural catastrophe environment, says Collenberg. According to the latest analysis from Swiss Re Institute, hurricanes, severe thunderstorms and floods have pushed insured losses above $100bn for the fifth consecutive year.

Not only are the frequency and severity of extreme weather events both increasing, but they are also happening in locations unaccustomed to such catastrophes. For example, so far this year there have been floods in the Arabian Peninsula, heavy snowfall in South Africa, forest fires in Chile and, most recently, flash floods in southern Spain and Eastern Europe.

Regulation is also a factor in driving up the demand for international programmes, says Collenberg. One of the most complex challenges for a multinational is managing the different regulatory requirements in each of the territories in which they operate, especially those directly related to (re)insurance. For example, Argentina has recently introduced a series of tax reforms for insurance premiums.

“The advantage of an international programme that gives you consistent coverage and consistent visibility has become much more important,” says Collenberg.

For insurers with the relevant capabilities, the increased take-up of international programmes is a welcome development. While such services require considerable investment from insurers, they also increase client retention. Furthermore, they bring the insurer closer to the client, which brings more cross-selling opportunities but also, crucially, improves the quality of risk management, says Ian Long, head of international programmes solutions at Swiss Re Corporate Solutions.

The mid-market matters
The growth of the international programmes market is not simply down to long-term users expanding their programmes. There are also several companies adopting international programs for the first time. “For some companies, international programmes have been seen as overly complex and challenging,” says Long. “But insurers have invested a lot in their international programmes offerings to make them more accessible and straightforward to manage.”

Long cites the example of a multinational beverage company with revenue exceeding £360m that set up its first international programmes in 2022 after the benefits of broader coverage and greater control were clearly explained to it by the Swiss Re Corporate Solutions experts.

There has also been greater adoption from mid-market companies with revenue of more than $100m, as per EY report. This is partly because those mid-market companies have also been expanding internationally and may have at least one overseas subsidiary.

But it is also because international programmes have become more efficient with greater clarity and are therefore no longer out of reach for many mid-market companies.

“The mid-market is more straightforward than large companies – which have their own captives and greater risk retention – so we can use more standardised wordings rather than bespoke policies,” says Long.

Lessons learned in international programs
Swiss Re Corporate Solutions has become an established newcomer in the international programmes market, having launched its first offering back in 2019. The insurer now manages over 720 global programs and is growing fast.

“We set out with a fresh legacy-free approach to international programmes,” says Collenberg. “We prioritise excellent service and since the start we use advanced technology to support our operations.”

However, the insurer is always looking to improve its offering by learning from its clients and competitors. And the biggest lesson of the last few years has been the importance of simplicity and service excellence.

According to Collenberg, clients recognise the advantages of high-quality service in international programmes management and may even be willing to pay higher premiums for it, particularly when they gain transparency and support in turning complex risks into a manageable transparent portfolio.

And this is where technology comes in. As a former underwriter, Collenberg has seen his fair share of Excel spreadsheets and is pushing for more digital technology to be adopted.

“Technology impacts how underwriters interact with data, though we still need to improve data exchange efficiency, says Long. “For submissions, instead of emails, underwriters frequently download data from broker or client platforms, and for risk analysis, tools are crucial.” He cites examples of CatNet and Sustainability Compass, digital tools developed by Swiss Re for assessing global catastrophe risks. “Additionally, we can deliver consistent electronic communication to many countries using our platform. We save time by not having to re-enter data. Our next step is advance integration with network partners and to add more third parties.”

The company also developed an international programmes client portal, PULSE, back in 2019. It provides real-time policy, claim and risk quality benchmark information with more than 650 active accounts. As with all technology, continuous development is needed. “This year, we revamped the PULSE portal by updating the user interface, enhancing data source connections, increasing load speed and expanding self-service options for clients,” says Long.

“The major change we see is client usage – they increasingly see the value of PULSE and are using it in greater numbers” says Long.

The company is also implementing use cases for Gen-AI in international programmes. The majority are based around using the technology as an accelerated administrative assistant – scanning and summarising annual reports and policies wording. Clients benefit from gaps in coverage being identified by underwriters.

However, despite the investment in technology and the increasing complexity of the risk environment, simplicity and service excellence are what most clients are seeking, says Collenberg. “Getting the basics of client servicing in international programs right can lead to greater client satisfaction, business growth and lasting partnerships.”