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Companies’ expanding multinational presence has led to more overseas assignments and business travel, and also increased risks, leading to a greater need for comprehensive risk management and insurance planning.
Injuries and illnesses of employees traveling abroad are constant concerns of multinational corporations, historically addressed through the purchase of business travel accident insurance. Although risk managers and HR professionals can rely on the advice of their insurance agents and brokers—excellent resources, generally able to provide thoughtful guidance—business travel accident insurance can be a dauntingly complex subject. In a nutshell, there is a pronounced need for risk managers and HR professionals to have greater control over these global exposures and more consistency in their treatment.
For U.S. and European multinational firms, there is a solution: a controlled master insurance program, an insurance program for a multinational business wherein the coverage terms and conditions apply on a blanket basis to all of the insured’s international operations, on par with similar programs addressing global property and casualty exposures.
This solution centers on five key strategies to consider when assessing present-day global insurance plans.
Get a Grip on the Global Infrastructure
Every multinational corporation has a specific geographical footprint, and each market often presents a unique culture, language, body of law and insurance regulatory regime. Despite these differences, companies desire a minimum standard of benefits for their employees around the world.
While uniform treatment is important to companies, such uniformity can be difficult to achieve when local insurance policies, on a country-by-country basis, provide different levels of coverage. As companies become more geographically diverse, problems maintaining consistency of coverage compound.
By utilizing a controlled master program, risk managers and HR professionals can be confident in knowing they have coverage that meets the minimum standard of benefits for employees worldwide through use of a single master policy. They can also feel secure in the financial stability of their insurer, even in emerging markets, where it’s sometimes difficult to know whether the local insurance company is financially sound.
Strive for Comprehensive Compliance
Despite ongoing efforts to harmonize insurance rules globally, dissimilarities remain. For example, some countries permit non-admitted insurers to provide coverage within their boundaries, while other countries allow only locally admitted insurers to provide this coverage.
These distinctions come with a price. For instance, in Argentina, the placement of non-admitted insurance can result in fines to the insured, the insurer and the broker. Countries may also specifically target the insured’s liability. In Italy, if an employee is killed or suffers a serious injury or illness due to work-related causes, the employer may bear the economic burden of paying a “loss of future earnings” to the employee’s spouse, as well as “moral damages” to each and every member of the employee’s family.
A controlled master program absorbs global travel accident risks on a consistent worldwide basis, mirroring the insured’s geographical footprint, and helping corporations attain greater compliance with local insurance laws and regulations.
Maintain a Single, Centralized Source of Information
A multinational corporation with dozens of operations worldwide can easily have hundreds of insurance policies covering diverse exposures. Each policy becomes effective and expires on a particular date, which presents a complex task for risk managers and HR professionals who handle these renewals. Any failure to stay on top of this responsibility, and the corporation could risk a claim for which it is uninsured.
Risk managers and HR professionals need a consistent, systematic way of accessing, evaluating and disseminating insurance-related data. Pairing a controlled master program with a technology platform that monitors the status of an insured’s entire global program in real time provides immediate access to country-specific research, local policies and certificates, regulatory information, policy renewal dates and claims activities worldwide.
Deliver Underwriting Excellence
An insurer’s expertise to underwrite business travel risks offers vital assurance to multinational risk managers and HR professionals that the corporation’s international travel exposures are covered sufficiently and consistently, in accordance with each country’s respective regulations. The intricate underwriting implications of business travel programs are among the more difficult due diligence tasks for risk managers and HR professionals. When there are coverage gaps in local insurance policies, companies are left with little to no financial recourse.
A controlled master program integrates locally admitted insurance policies into the master program to help avoid these coverage gaps.
Help When and Where It’s Needed
All employees confront injury and illness risks when traveling abroad on business. For their employers, bare bones business travel accident insurance addresses only part of the solution, as they may have legal obligations to care for the injured or ill employee.
In areas that may lack adequate medical facilities compared to Western standards, the employer may need to evacuate the injured or ill employee to a more advanced facility outside the region. At a minimum, the corporation’s insurer should provide coverage for emergency evacuation expenses, out-of-country medical expenses and security-related needs, as well as hospital cash, inpatient daily benefits and costs incurred for emergency transportation back to the home country.
Travel risk management services, often offered by specialized insurers, help protect against these exposures. Provided through special agreements with third-party travel assistance, medical assistance and security and crisis management organizations, these services are an integral component of multinational travel risk management programs.
James Walloga is a senior vice president in the ACE Group’s Accident & Health Division and Susan Osborne is a regional underwriting manager, multinational programs at ACE. ACE Group is one of the world’s largest multiline property and casualty insurers, with operations in 54 countries.
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