At a glance
- With many mid-corporate businesses operating all over the world, insurers need to reflect this in the coverage they offer
Today’s mid-corporate businesses have more of an international flavour than ever before and insurers need to reflect this in the solutions they offer to companies in this sector.
Supply chains, customers and office networks routinely stretch from Shanghai to Swansea, and working on this global basis has become an everyday normality for many businesses.
In particular, the Eurozone plays a very important role in the fortunes of most mid-corporate organisations and they have to be able to effectively insure the risks they carry across these different continental territories.
Often, individual insurance policies are written in each of the territories in which a company is operational, covering the particular risks they face in that country. However, this approach throws up a number of problems for insurance brokers and buyers alike and could be significantly improved by moving more to a single policy, written in the UK.
The benefit for clients of a single policy approach
A UK policy across Europe creates simplicity for clients and prevents them from having to manage a series of policies for each country.
It increases UK control by doing away with locally controlled policies in different countries and simplifies insurance arrangements because there is no need for local offices and contacts for policy administration. In addition, it increases understanding by being in English rather than numerous policies in a variety of languages.
A single policy from the UK can ensure compliance with local tax laws and insurance pool legislation e.g. flood and terrorism, in a similar way to that provided through a series of local policies. Zurich has longstanding experience in delivering compliant solutions.
These are major benefits and offering risk managers a compliant, single policy solution will create a lot more time for them to focus on actually improving the performance of their risk on a day-to-day basis.
The benefits for brokers
There are significant advantages for brokers in arranging their clients’ cover through a single UK policy across the European Economic Area (EEA).
In the first instance, it simplifies the insurance buying process and means brokers do not need a network of offices or agents operating on a pan-European basis who can help them arrange the cover required in each individual territory.
This will help brokers to offer an EEA programme to new clients they could not previously compete for.
Single policies written in the UK also mean that a broker’s commission will be paid in the UK and there will be no need to co-ordinate payments from numerous sources in various territories across Europe.
For brokers, this will rationalise hitherto complex cross-border arrangements, while also having the effect of lowering the overall administrative costs of a European insurance programme – for clients, brokers and insurers alike.
This reduction in cost will create better value for insurance buyers and provide them with cover that is not only more effective, but which also operates on a more efficient basis. Increasingly, insurers are showing an appetite to write pan-European cover on a single policy basis and this has been driven by a number of factors.
The first is the growing need that mid-corporate businesses actually have for this cover in light of their more international operational models. The second is the ability insurers have to operate in this way because of the framework established by the European Union.
The insurance industry has traditionally done very well for its largest customers, but many smaller firms now need the same sort of solutions that have previously been the preserve of their bigger competitors.
Zurich is working hard to make sure that mid-corporate clients working across Europe can easily access comprehensive, compliant and highly effective insurance solutions.
Of course, the needs of clients will vary significantly. For some, a single policy solution will be eminently suitable, but for others with more varied and complex needs, a full programme of local policies will be right. What matters is that the most suitable approach is implemented for each particular client.