The business world is constantly evolving. As the world seems to get smaller by the day, due partly to new technology improving geographical connectivity, companies large and small are looking for ways to expand their horizons, target new markets and grow their books of business in new jurisdictions.
As countries become increasingly interconnected, so too does the global risk landscape. Multinational corporations require tailored risk management and insurance solutions that can deal effectively with cross-border nuances in exposures, regulation and legislation.
Allianz is one insurer that provides global insurance program solutions for corporations with global risk exposures. The Allianz Multinational team offers centrally coordinated insurance programs that deliver locally admitted policies to match clients' own geographic footprint and their specific risk and exposure requirements.
“Compliance is right up there as one of the top priorities for global insurance programs,” explained Ayleen Frete, regional practice leader, London – Allianz Multinational. “We look for good local standards in each and every country our clients do business in, and we look at the different rules and regulations around the world to make sure we know what’s allowed to be covered and what’s not. Compliance really is a key issue.
“Consistency of coverage is another challenge when dealing with multinational accounts. We try to ensure there’s coverage around the world for all of our clients’ risks in each and every country. We do that by issuing a master policy centrally from wherever we’re located (in my case, from the UK) and then all of the risk locations around the world basically form part of, or are attached to, that master policy. By way of that master contract, we’re able to ensure consistency of coverage for our multinational clients.”
So far, dealing with corporate entities with multinational risks might sound simple. You place the risk in a centralised global insurance program and you’re good to go. Well, sorry to disappoint, but nothing’s ever quite that simple. For starters, local laws and legislation change all the time – and there are multiple factors driving those changes. These days, we’re seeing more and more jurisdictional isolationism, trade protectionism, nationalism, and many other -isms that are keeping cross-border companies and their insurers on their toes.
One of the more obvious examples of a regulatory environment in flux is Great Britain’s ongoing Brexit from the European Union. The official leave date has been extended until October 31, 2019, giving multinational corporations with business in the UK and the EU a few more months to prepare and get compliant.
“In times of change, it’s really important to know your customer. Regardless of uncertainty, preparation is key,” Frete told Insurance Business. “It’s also really important to team up with an insurer that’s experienced in multinational insurance and has the tools to be able to be prepared for any type of outcome. At Allianz, we’ve been preparing for this for some time. We applied for third country branch status, which will allow us to continue doing business as the same legal entity across the whole of the UK and the EU – essentially, it will be business as usual.
“We’ve also been preparing our customers so that they’re ready for any Brexit outcome. That includes clients in the UK, the EU, North America, and so on. We’ve addressed their exposures on a case-by-case basis, making sure we fully understand their EU footprint and we know exact where they have risks. Circling back to compliance, it’s very important to know the type of business you’re dealing with, whether it’s liability or it’s property, and whether the client has a freedom of services policy including all the countries where they do business or whether they’ve bought local policies in each country.”