{"id":83973,"date":"2021-11-01T15:25:34","date_gmt":"2021-11-01T15:25:34","guid":{"rendered":"https:\/\/www.commercialriskonline.com\/?p=83973"},"modified":"2022-01-28T12:37:54","modified_gmt":"2022-01-28T12:37:54","slug":"multinational-auto-liability-confidence-control-and-collaboration","status":"publish","type":"post","link":"https:\/\/www.commercialriskonline.com\/multinational-auto-liability-confidence-control-and-collaboration\/","title":{"rendered":"Multinational auto liability: confidence, control and collaboration"},"content":{"rendered":"

While commercial insurance is widely used to effectively manage risk and satisfy contractual obligations, most coverages are not considered mandatory. One virtually global exception is auto liability insurance. For any complex multinational organisation, keeping track of auto liability policies around the world can quickly become a difficult and cumbersome task. Each country has unique documentation needs, specific processes with local regulators and its own required limits; risk managers could potentially lose sight of what coverage each local subsidiary has purchased and the company\u2019s global spend.<\/p>\n

A multinational auto liability programme not only provides for centralised control over a company’s worldwide auto insurance placements, but also provides visibility into a company’s exposure, coverage and spend worldwide. While a global auto programme may not be appropriate for every client, it can be particularly effective for a company with an established risk management team that makes centralised insurance purchasing decisions for the company on a worldwide basis. Further, a company with a large fleet of business vehicles may benefit from the economies of scale provided by such a programme.<\/p>\n

Benefits<\/strong>
\nThe foremost benefit of a multinational auto liability programme is the control it offers. By managing the programme centrally, a risk manager can be confident that the company is compliantly placing this coverage everywhere it is legally required, and have access to global claims data and policy wordings.<\/p>\n

This central control also facilitates decisions on terms and conditions. For example, most territories do not require auto physical damage coverage. Thus, the decision could be made to retain that risk, while placing the required auto liability coverage via the multinational programme. Similarly, a company that includes a captive as part of its overall risk management strategy could utilise the captive to retain risk under the multinational auto liability programme and still be able to show evidence of coverage.<\/p>\n

A final key benefit of a centralised programme is having direct insight into a company\u2019s total global spend on coverage. While it is often a challenge for a company to identify and track insurance costs across various countries, this information is crucial as more companies look to their risk management teams to identify cost-saving opportunities.<\/p>\n

Challenges<\/strong>
\nEven with optimal design and management, multinational auto liability programmes are not without their complexities. Timing becomes a key challenge due to the legally required documentation for each territory. To execute on the numerous unique regulatory requirements, coverage must be agreed with enough time for the insurer and broker to release instructions and issue the individual local policies and other documentation.<\/p>\n

A less obvious but perhaps more demanding challenge is the data compilation and monitoring involved in managing these programmes. Companies with large fleets are constantly adding and removing vehicles throughout the year. Collecting accurate vehicle counts from local entities for the programme renewal can be time-consuming and difficult to organise.<\/p>\n

Effective programme implementation<\/strong>
\nGiven the challenges, brokers and clients may view the effective and efficient management of multinational auto liability programmes as a daunting task. With the right insurance partner, frustrations can be eased and these programmes can be managed appropriately.<\/p>\n

Key considerations:<\/p>\n