Coverage Spotlight: Multinational

A Controlled Master Program is Vital for U.S. Firms Expanding Overseas

In this Q&A, a multinational risk expert discusses key exposures many mid-sized U.S. companies overlook when structuring multinational coverage.
By: | April 5, 2018 • 5 min read

An increasing number of mid-sized U.S. companies are seizing international business opportunities, but many of them are not prepared for international business risks. As foreign regulators tighten the reins, U.S. entities must be mindful of the significant implications associated with local regulatory compliance. In this Q&A, The Hartford’s Vice President and Head of Multinational Underwriting, Alfred Bergbauer, discusses the risks and opportunities for the middle market.


R&I: What trends are you seeing in the U.S. for the middle market?

Alfred Bergbauer: Our pulse survey from the second quarter of 2017 shows that more U.S. mid-sized companies are pursuing international activities in one form or another. It runs the gamut from executive travel to opening manufacturing facilities overseas. We anticipate that these companies will only continue to increase their international activities going forward. The opportunity and, in fact, the need to expand internationally is greater than ever. Technology and globalization continue to make our world smaller, requiring companies to tap into new markets or lose risk losing out to existing and new competitors.

R&I: From a risk perspective, what do mid-sized companies need to be aware of when expanding internationally?

AB: Mid-sized companies have much to consider as they expand overseas, however, the most significant challenge involves understanding how risk needs can and should be addressed to ensure proper coverage and local regulatory compliance.

Our research suggests that 86 percent of companies with international exposures believe they have specific international insurance, but only 56 percent actually have such coverage, and only 25 percent have local policies where locally insurable exposures exist.

Technology and globalization continue to make our world smaller, requiring companies to tap into new markets or lose risk losing out to existing and new competitors.

Most mid-sized companies address their international exposure via endorsements on U.S.-based general liability policies, but these can result in significant coverage gaps and may not properly address local regulatory requirements. Inappropriately structured coverage can expose clients, brokers and carriers to potentially significant coverage gaps, fines and tax implications. As regulatory scrutiny continues to increase, and as regulatory bodies share information, it is increasingly important that mid-sized companies with international exposures operate in full compliance with local laws. Compliance is most easily achieved via the issuance of locally admitted insurance policies (policies issued by locally licensed and/or registered carriers). As such, it is important to work with insurers that understand local regulatory requirements, can coordinate locally admitted/compliant coverage solutions and customize global solutions with the client’s best interest in mind.

R&I: Aren’t global master policies meant to bridge those gaps?

AB: Coverage provided by master policies is generally not considered admitted outside of the country in which the master policy is issued. While master policies provide coverage consistency, coverage under the master should generally not be relied upon to address local country risk needs. As such, master policies should be paired with coordinated, locally issued insurance policies.
To help ensure consistent and compliant coverage, The Hartford offers customized controlled master program solutions, combining the breadth and flexibility of a master policy with coordinated, locally compliant program policies.

R&I: What is a controlled master program (CMP)?

AB: It’s a coordinated insurance program to help U.S. businesses manage and insure their risks around the globe, without having to work with local carriers directly. Our CMP consists of The Hartford’s Master Policy as the foundation, with coordinated local admitted policies issued where our clients have locally insurable exposures (generally, permanent local employees, locally registered legal entities or representatives and/or local operations).

We leverage our global network infrastructure to identify where local policies are required and then place good local standard policies in compliance with local regulations. The Hartford has local capabilities via its global carrier network partners in more than 150 countries.

Eighty-six percent of companies with international exposures believe they have specific international insurance, but only 56 percent actually have such coverage, and only 25 percent have local policies where locally insurable exposures exist.

R&I: What is “good local standard?”

AB: It refers to what would be considered competitive terms and conditions and pricing that local insurers would normally offer to local clients. In other words, we don’t just want to place any coverage, we want to provide customary, competitive local coverage which both meets the needs of clients and adheres to local regulatory requirements.

R&I: What coverages come standard in a CMP?

AB: The Hartford provides fully customizable solutions based on our clients’ unique risk exposures and needs. Generally, programs include several core covers, such as property, commercial general liability, contingent commercial auto liability, voluntary workers’ compensation, business travel accident, and kidnap, ransom and extortion. We also write equipment breakdown, transit, ocean cargo, and professional liability, among others.


R&I: What’s the benefit of having everything rolled into one program?

AB: Having all multinational coverages executed and overseen by one carrier streamlines the experience for insureds and helps ensure coverage and service consistency. They have one point of contact for questions or concerns. Underwriting, claims services and risk control services are all aligned and coordinated. Whether your risk is domestic or international, you’re going to get a consistent response and level of service.

R&I: Are there any other benefits that come with a CMP?

AB: Risk control and travel assistance services are generally included with The Hartford’s standard multinational offering for mid-sized U.S. companies. Our clients with employees abroad have 24/7 access to emergency medical and evacuation services, lost document assistance, embassy referrals, access to local attorneys, and other security services. Our risk engineering capabilities are also available to CMP insureds around the globe.

Financial strength and established reputation are also important factors. Taking on multinational risks is a big step, and businesses need an experienced carrier to help handle the complexity. The Hartford has A ratings from A.M. Best, Moody’s and S&P, and we’ve been serving clients for more than 200 years. &

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

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]