Vive la révolution: Global Programme Europe conference offers renewed hope for buyers but pitfalls remain

These are interesting times for global insurance managers. Captives continue their seemingly inexorable rise, regulations mount further and many companies are beginning to expand again as the financial outlook improves. Meanwhile, the commercial insurance market has continue to moderate and, dare we say it, now tipped into overall softening territory. All of these topics, plus the perennial issues of how to best close multinational programme gaps, deal with complex claims and make the most of programme design, were discussed at our recent Global Programmes Europe conference.

Commercial Risk’s fifth annual event in London brought together leading figures from the world of risk and insurance management, along with insurance industry leaders and a range of experts to address some of the critical issues.

Once again, the hugely successful event provided a collaborative environment where professionals shared experiences, insights and innovative strategies for optimising global insurance programmes.

A big topic, as ever, was how buyers can best deliver compliant, thorough and cost-effective multinational programmes with as few gaps in cover as possible.

Experts told attendees at the event, held in association with Airmic, the IRM and the London Market Group (LMG), that financial interest cover (FINC) is a good solution for certain problems, but stressed that it won’t fix all gaps and solve all issues across a multinational programme. They suggest that FINC is potentially being overused and should, in fact, only be brought to the table as a matter of last resort when all other options have been exhausted. Above all, there appears concern that these messages aren’t being made clearly to many insurance buyers as the speakers urged the market to better educate risk managers on the pros and cons of FINC.

The experts explained that FINC brings claims payment and tax issues, and in some cases is likely being misused to meet local policy timeline requirements. The panellists added that insurance buyers need to understand how FINC works up front to avoid nasty surprises during a claim.

“FINC is a double-edged sword. It needs to be addressed and understood carefully,” said Praveen Sharma, practice leader at Marsh insurance regulation and tax consulting. “There are many ramifications of FINC and we need to be conscious of whether clients understand them properly. FINC should be used as an absolute matter of last, last resort when you have exhausted all other options.”

Franck Baron announced at the conference that his risk management team at International SOS has developed a GenAI tool that helps analyse insurance wordings across 94 countries in the company’s global programme and close gaps in cover or limits.

Baron, who is president of president of the International Federation of Risk & Insurance Management Associations (Ifrima), encouraged other risk managers to grab the nettle and follow suit.

“The technology is here, it’s affordable, and it’s available. You don’t need a huge risk management information system; GenAI can help you right now,” he said, during a panel debate entitled Mind The Gap.

This is undoubtedly a hugely interesting development in the commercial insurance world and early proof that AI is likely to be revolutionary. It looks to be an important step in the battle to avoid gaps in global insurance coverage.

Another battle is delivering compliant cover, and this task is not getting any easier. In fact, many expect things to get more complicated if the world continues to move away from the post-World War II global order.

“The overarching theme here is that regulations are only going to become more complex. There is a reason why there are not that many markets that offer strong and compliant – compliant being the main word – multinational programmes because it is very challenging to keep up with the regulations. So you want to make sure that those you are working with have that regulatory knowledge and database, as well as the smart tools, to understand these risks, because it is only going to get harder,” said Dawn Miller, commercial director at Lloyd’s and CEO of Lloyd’s Americas, during a session that discussed how best insurance managers can help their companies expand into new markets.

The growth in captives has been phenomenal over the last few years, in part as beleaguered risk managers worked out how to keep a handle on their risks during the hard market. They are an increasingly important tool in the multinational risk managers’ toolbox. There has been a big push to change the image of captives from tax evasion vehicles to vital risk management tools, and more and more interest across Europe to set up onshore captive-friendly regimes.

The “revolution” to change the mindset of politicians, regulators and business leaders about the importance of captives continues, said a chief architect of the new captive regime in France, former Amrae president Brigitte Bouquot. She stressed the importance of this ongoing campaign as Ferma board member Philippe Cotelle told our event that the federation is ramping up work with its member associations to ensure they can help drive proposed changes to Solvency II, which would introduce more favourable captive rules, through the next part of the legislative process.

All the work on captives has culminated in a new onshore captive regime in France, with interest to do something similar in the UK, Spain, Italy, Germany and, no doubt, elsewhere in Europe.

“The revolution is not about creating new tax laws, the revolution is to transfer the mindset of politicians, business leaders and the c-suite about risk management and risk financing,” said Bouquot, who is chair of the Fédération Française de Captives d’Entreprise (FFCE), a new captive association in France.

The LMG is confident that the UK will open its long-awaited consultation on an onshore captive regime before the end of this year, its CEO announced at the Global Programme Europe conference.

CEO Caroline Wagstaff believes the move is on the cards after positive discussions with the new Labour government, which seems keen on plans that were interrupted by the recent UK general election.

“I am confident we will see something before the end of the year in terms of the consultation. I am hoping there is going to be an announcement,” Wagstaff said.

Other key sessions at the event looked at what will happen next in the cyber insurance market – which has swung from very hard to soft and left buyers a bit bruised – and the future of commercial through the prism of connected risk transfer solutions. Claims experts gave important advice on how to ensure the most important part of the risk transfer process runs smoothly. And there was an interesting panel debate on the mounting role that parametric and capital markets will likely play in risk management and transfer.

We would like to thank our partners Marsh, Zurich Insurance, AIG, Lloyd’s, QBE, Sompo, CNA, Crawford, DAC Beachcroft, Descartes, HDI, TMF Group, Wilson Elser, Swiss Re Corporate Solutions and WTW for contributing to the lively and thought-provoking discussion.

Look out for details on our Global programme Europe 2025 conference in the coming months.