ACE has urged risk managers at multinational European companies to re-examine the capabilities of their global insurance partners as the international regulatory and business environment grows increasingly complex.
The recommendation follows recent ACE research, which suggests that 70 percent of European risk managers have increased their use of captive insurance arrangements over the past three years to help manage their multinational risks.
The report was released during the European Captive Forum in Luxembourg and is authored by Suresh Krishnan, executive vice president of global accounts at ACE; Suneeti Kaushal, insurance manager at Ikano Insurance Advisory; and Rémy Massol, director of multinational services for Continental Europe at ACE.
European risk managers are experiencing more claims outside their home market, according to ACE’s research.
To manage this increase, ACE has stated that it is “imperative” that risk managers work with insurance partners who can help them to deliver transparency in surveying, valuing, and paying multinational insurance claims, along with transparent and timely loss reporting.
The implications of credit risk are another factor that should be thoroughly discussed before a multinational insurance programme is implemented, according to ACE.
This is because changes in a company’s international exposures, coupled with the potential impact of Solvency II on the capital-adequacy requirements for European captives, could cause insurance partners to re-examine a “no-collateral” reinsurance programme.
Krishnan commented: “Financial strength, underwriting acumen and price are important criteria for captive owners when choosing a global insurance partner.”
“In today’s complex international regulatory and operating environment, the requirement for best-in-class service and use of leading-edge technology to effectively manage programme performance should also be given due consideration.”
Also speaking at the forum, Kaushal said: “As clients, we want to work with insurers who are value-adding partners; partners who will critically examine our assumptions, and who will work with us to inform and navigate the complex, but varied, regulatory and compliance demands of each country in which we operate.”
“Captive owners and managers should insist on an insurer-partner who has the information owners require to make properly considered decisions about the structure of their multinational insurance programme, and who will explore with them potential scenarios and stress-tests to establish how their multinational insurance programme will respond to particular claims situations.”
