Service Spotlight: Multinational

8 Questions for Dawn Miller

An insurance executive shares how foreign companies can overcome the unique challenges facing an expansion into the U.S.
By: | April 2, 2018 • 5 min read

The United States is widely considered the land of opportunity for a reason. Many international companies recognize the benefits of staking their claim in the U.S. market, but the regulatory and insurance landscape can make the move challenging. In this Q&A, AXA Insurance Company CEO Dawn Miller discusses the unique risks facing inbound firms, and how insurers can ease the transition.


R&I: Why is 2018 a particularly attractive time to expand into the U.S.?

Dawn Miller: The U.S. has always represented a good opportunity for foreign firms because of the size of the market — in 2016, the U.S. attracted $3.7 trillion in foreign direct investment. But there are a few trends that make this year a particularly good time to make an international move. For one, unemployment is at record lows and the economy remains on a slow but steady upward trajectory.

There’s also the potential for recent regulatory and tax reforms to foster domestic manufacturing and ease international trade. Additionally, Chambers of Commerce across the U.S. are always seeking to pull in new businesses by offering a variety of services and incentives.

R&I: What sectors or markets are most attractive right now?

DM: Most foreign investment in the U.S. is focused on the middle market. According to the National Center for the Middle Market, this segment reported a 7.6 percent revenue growth in the fourth quarter of 2017 over the previous year and represents the third-largest global economy. Data from the Organization for Economic Cooperation and Development shows that manufacturing attracts the most investment dollars by far.

According to the National Center for the Middle Market, this segment reported a 7.6 percent revenue growth in the fourth quarter of 2017 over the previous year and represents the third-largest global economy.

R&I: What are the business risks these companies might face when expanding to the U.S.?

DM: Regulatory compliance is a challenge because there is a mix of federal, state and local law to contend with, and state and local ordinances can vary widely. You have to know your jurisdiction. There may be different tax codes, different financial reporting procedures, differences in employment law, and so forth. Not complying with those requirements can open up any company to massive legal liability exposure.

Duty of care is another commonly overlooked obligation. If a foreign firm is sending employees to the U.S. to get a new business or branch up and running, how will they protect those workers so far from home? There must be procedures and resources in place to provide care if or when it’s needed.

Language barriers amplify those risks. Lack of effective communication or understanding only increases the likelihood that something will be missed. The due diligence aspect of expanding into a new country is quite significant.

And on top of the commercial risks, there’s also insurance risk.

R&I: What are the biggest insurance and risk management risks?

DM: The biggest risk is assuming that a domestic policy will cover you abroad. Coverage may not extend beyond the borders of the issuing country, and even if it does, your jurisdiction in the U.S. may require different limits or broader coverage.

There are different risk transfer mechanisms, and firms have to re-examine what structure or approach will benefit them most and keep while keeping them in compliance.

Differences in contract terminology can also affect how a foreign policy will be interpreted in the U.S. Definitions of admitted versus non-admitted may vary in the U.S. from a European market. Self-insured retentions and deductibles may offer different advantages and disadvantages. There are different risk transfer mechanisms, and firms have to re-examine what structure or approach will benefit them most and keep while keeping them in compliance.


Policy wording can create confusion as well. What’s the difference between “business interruption” and “loss of use”? What is the difference between your equipment “replacement cost” versus “insurable value?” There are many technicalities to work through.

R&I: How should companies prioritize and tackle the due diligence work?

DM: Given that many international firms looking to expand into the U.S. are mid-size companies, addressing both the commercial and insurance risks is a big demand on their limited resources. And what usually happens is that risk management is relegated to the placing of insurance, and it drops down on the priority list. With so many other operational challenges to overcome, the due diligence team wants to get coverage in place and get it done quickly so they can move forward. So they buy a policy and check the “insurance” box.

But this misses a vital opportunity to leverage domestic risk management resources that can help them address both the business and insurance risks they’re facing.

R&I: How can incoming international firms get connected to the right local resources?

DM: U.S.-based insurers should be able to connect their clients with the best local resources. AXA Insurance Company has several domestic partners who can help international companies understand and mitigate their exposures. To protect physical assets, such as properties, equipment and supply chains, we work with AXA Matrix. AXA Matrix is a risk engineering firm that can help companies evaluate the value of their assets and their level of exposure, and suggest ways to mitigate it beyond just buying more coverage.

To protect employees, we partner with AXA Assistance. They provide security alerts and travel tips, and can facilitate medical care for employees abroad by leveraging a global network of fully vetted medical providers. They make fulfilling duty-of-care obligations streamlined and straightforward.

Adopting an ERM framework can help even companies that run lean to anticipate the hazards they might encounter with any given opportunity.

At the end of the day, the carriers that provide the best service for a company’s most important assets will build the long-lasting relationships that support continued growth. We’ve built an on-the-ground support network for companies once they land in the U.S., so they know who to turn to when they have questions.


R&I: What else should inbound companies do from a risk management perspective?

DM: Risk management should be built into any business’s strategic decision-making. Insurance is only one part of that. Adopting an ERM framework can help even companies that run lean to anticipate the hazards they might encounter with any given opportunity. Technology has a role to play here. Platforms that connect and streamline internal functions can facilitate communication and make sure every department has input on strategic decisions. Everyone has a different perspective, and an interdisciplinary approach to decision-making can uncover both potential problems and innovative ways to address them.

R&I: While we know you are focused on helping international companies come to the U.S., what is your favorite international destination to travel to?

DM: I have been fortunate to travel and reside in quite a few countries around the world. I have a soft spot for places like South Africa, Dubai and Istanbul but London is my favorite city. I find London to be the epicenter of global trade and culture. &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Workers' Comp

Do You Have Employees or Gig Workers?

The number of gig economy workers is growing in the U.S. But their classification as contractors leaves many without workers’ comp, unemployment protection or other benefits.
By: and | July 30, 2018 • 5 min read

A growing number of Americans earn their living in the gig economy without employer-provided benefits and protections such as workers’ compensation.


With the proliferation of on-demand services powered by digital platforms, questions surrounding who does and does not actually work in the gig economy continue to vex stakeholders. Courts and legislators are being asked to decide what constitutes an employee and what constitutes an independent contractor, or gig worker.

The issues are how the worker is paid and who controls the work process, said Bobby Bollinger, a North Carolina attorney specializing in workers’ compensation law with a client roster in the trucking industry.

The common law test, he said, the same one the IRS uses, considers “whose tools and whose materials are used. Whether the employer is telling the worker how to do the job on a minute-to-minute basis. Whether the worker is paid by the hour or by the job. Whether he’s free to work for someone else.”

Legal challenges have occurred, starting with lawsuits against transportation network companies (TNCs) like Uber and Lyft. Several court cases in recent years have come down on the side of allowing such companies to continue classifying drivers as independent contractors.

Those decisions are significant for TNCs, because the gig model relies on the lower labor cost of independent contractors. Classification as an employee adds at least 30 percent to labor costs.

The issues lie with how a worker is paid and who controls the work process. — Bobby Bollinger, a North Carolina attorney

However, a March 2018 California Supreme Court ruling in a case involving delivery drivers for Dynamex went the other way. The Dynamex decision places heavy emphasis on whether the worker is performing a core function of the business.

Under the Dynamex court’s standard, an electrician called to fix a wiring problem at an Uber office would be considered a general contractor. But a driver providing rides to customers would be part of the company’s central mission and therefore an employee.

Despite the California ruling, a Philadelphia court a month later declined to follow suit, ruling that Uber’s limousine drivers are independent contractors, not employees. So a definitive answer remains elusive.

A Legislative Movement

Misclassification of workers as independent contractors introduces risks to both employers and workers, said Matt Zender, vice president, workers’ compensation product manager, AmTrust.

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered.”

Misclassifying workers opens a “Pandora’s box” for employers, said Richard R. Meneghello, partner, Fisher Phillips.

Issues include tax liabilities, claims for minimum wage and overtime violations, workers’ comp benefits, civil labor law rights and wrongful termination suits.

The motive for companies seeking the contractor definition is clear: They don’t have to pay for benefits, said Meneghello. “But from a legal perspective, it’s not so easy to turn the workforce into contractors.”

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered in the eyes of the state.” — Matt Zender, vice president, workers’ compensation product manager, AmTrust

It’s about to get easier, however. In 2016, Handy — which is being sued in five states for misclassification of workers — drafted a N.Y. bill to establish a program where gig-economy companies would pay 2.5 percent of workers’ income into individual health savings accounts, yet would classify them as independent contractors.

Unions and worker advocacy groups argue the program would rob workers of rights and protections. So Handy moved on to eight other states where it would be more likely to win.


So far, the Handy bills have passed one house of the legislature in Georgia and Colorado; passed both houses in Iowa and Tennessee; and been signed into law in Kentucky, Utah and Indiana. A similar bill was also introduced in Alabama.

The bills’ language says all workers who find jobs through a website or mobile app are independent contractors, as long as the company running the digital platform does not control schedules, prohibit them from working elsewhere and meets other criteria. Two bills exclude transportation network companies such as Uber.

These laws could have far-reaching consequences. Traditional service companies will struggle to compete with start-ups paying minimal labor costs.

Opponents warn that the Handy bills are so broad that a service company need only launch an app for customers to contract services, and they’d be free to re-classify their employees as independent contractors — leaving workers without social security, health insurance or the protections of unemployment insurance or workers’ comp.

That could destabilize social safety nets as well as shrink available workers’ comp premiums.

A New Classification

Independent contractors need to buy their own insurance, including workers’ compensation. But many don’t, said Hart Brown, executive vice president, COO, Firestorm. They may not realize that in the case of an accident, their personal car and health insurance won’t engage, Brown said.

Matt Zender, vice president, workers’ compensation product manager, AmTrust

Workers’ compensation for gig workers can be hard to find. Some state-sponsored funds provide self-employed contractors’ coverage.  Policies can be expensive though in some high-risk occupations, such as roofing, said Bollinger.

The gig system, where a worker does several different jobs for several different companies, breaks down without portable benefits, said Brown. Portable benefits would follow workers from one workplace engagement to another.

What a portable benefits program would look like is unclear, he said, but some combination of employers, independent contractors and intermediaries (such as a digital platform business or staffing agency) would contribute to the program based on a percentage of each transaction.

There is movement toward portable benefits legislation. The Aspen Institute proposed portable benefits where companies contribute to workers’ benefits based on how much an employee works for them. Uber and SEI together proposed a portable benefits bill to the Washington State Legislature.


Senator Mark Warner (D. VA) introduced the Portable Benefits for Independent Workers Pilot Program Act for the study of portable benefits, and Congresswoman Suzan DelBene (D. WA) introduced a House companion bill.

Meneghello is skeptical of portable benefits as a long-term solution. “They’re a good first step,” he said, “but they paper over the problem. We need a new category of workers.”

A portable benefits model would open opportunities for the growing Insurtech market. Brad Smith, CEO, Intuit, estimates the gig economy to be about 34 percent of the workforce in 2018, growing to 43 percent by 2020.

The insurance industry reinvented itself from a risk transfer mechanism to a risk management mechanism, Brown said, and now it’s reinventing itself again as risk educator to a new hybrid market. &

Susannah Levine writes about health care, education and technology. She can be reached at [email protected] Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]