What It Truly Takes to Run a Seamless and Successful Global Insurance Program

Swiss Re Corporate Solutions, while a relatively new entrant into the international marketspace, has seen success in its programs. Here’s what the company is up to that’s making it work.

By: Autumn Demberger | January 19, 2021

Putting together a global insurance program that runs smoothly takes time, precision and a whole lot of dedication. Insurers stepping into the space must have an understanding of the exposures faced by their customers around the globe, all while issuing policies that offer coverage complying with local regulation.

A program like this has many moving parts, but the carriers that have a grip on what it takes to run it know how to aim for success.

Take Swiss Re Corporate Solutions as an example. The company spent the necessary time researching and then building a comprehensive international program offering with an eye toward the brokers and customers it serves. With a reach to more than 150 countries, Swiss Re’s is no stranger to the complexities of global insurance programs.

But, the company and its dedicated team make sure everything runs smoothly.

“We’ve been very deliberate about the approach that we’ve taken,” said William Porter, deal architect for international business, North America, at Swiss Re Corporate Solutions.

William Porter, deal architect for international business, North America, Swiss Re Corporate Solutions.

“After Corporate Solutions was founded as its own entity within Swiss Re, we started to look at if we could be a player in the international program space,” he continued. “The first steps were taken to make sure we were going out to where we knew we could be successful, where we knew we could actually bring something that added value for our clients.”

Now Swiss Re Corporate Solutions is taking the step toward becoming a carrier of choice for the largest and the most complex global programs. It is expanding to more countries, offering higher limits, moving into fronted captive programs and more, all to deliver the best for clients.

The Draw of a Global Insurance Program

Customers interested in global insurance programs come about in two ways. First, their business is growing to a point where they want an international program, or, second, they already purchase such a program and they are looking to improve.

“That’s something we’re always talking about,” Porter said, “how we can make the program better for the customer.”

Part of improving the program comes in the form of helping alleviate complications for customers.

Risk managers, he said, want to focus on their role. “Buying insurance is something they have to do, it’s a necessary part of their job. But they also have to look at the broader impact of risk on their organization,” Porter said.

A savvy global insurance partner can help risk managers focus back on the big picture.

A key draw of an international program is in its ability to ease the administrative burden for clients. Rather than having to coordinate with the various countries a business is operating from and acquiring different insurance policies for all lines of business in each, risk managers can rely on their insurance partner to handle it.

“Having an international program enables them to focus on that enterprise risk management aspect of their role and not worry about the purchasing of insurance in so many countries around the world,” said Porter.

The program partner is also there to track and monitor money movement, as well as handle claims that may arise. All of that goes into building the program, “and how we’re going to structure what we’d recommend as the best program for any single customer,” said Porter.

We’ve Got You Covered

Another draw is knowing that coverage is readily available across the globe.

“Having the broadest possible coverage around the world is really what the goal is for most of our clients,” Porter said.

The Swiss Re program has worked to provide its global insurance partners with policies that dig down into the coverages available to them. Advancements in policy language and policy forms have enabled clients to fully understand the coverages available to them upfront.

“For years, we tried to make the master policy as clear-cut as possible: This is the coverage you have, this is what isn’t included. Now, we’ve been able to take the next step in issuing the same policy language in many countries around the world,” Porter said.

That’s thanks to the Swiss Re Corporate Solutions ONE Form, a document that provides efficiency, compliance and contract certainty between local policies and the master policy in the customer’s home country. Standard wording enables the insured to fully grasp their property and business interruption risk around the globe.

Porter added, “There’s no more guessing, there’s no more trying to do a spreadsheet. And it’s something that’s really helping us take the conversation around coverage to a new level.”

The Important Role Technology Plays

No global insurance program is complete without the technology used to support it. Advancement in technologies has brought significant depth to the Swiss Re offering, and it is a big component of what’s made this particular portfolio as successful as it is.

“Swiss Re has taken technology and applied it and purpose-built it for writing and servicing these international programs,” said Porter.

As he explained it, the Swiss Re program was built with technology in mind. With so many moving parts, from internal offices and networks, to broker partners’ networks and customers’ programs, aligning the different technologies used across the globe, as well as keeping information accessible without delay or confusion, has always been a primary goal.

Swiss Re, a relatively new entrant to the international marketplace, wanted technology that would last. A legacy system would not hold up to an ever-changing tech landscape, and flexibility was key. So the team built its system on a global platform with the end user in mind.

This enables underwriters from across the globe to input data on the price of certain risks, the price points for certain risk transfer solutions, as well as location information, buildings being insured and more into one accessible program.

“That process flows from one system into another. It’s called our International Program Administration Tool, and it feeds the same data to everyone involved in the process,” said Porter. “So there’s no changing of data, there’s no exporting of information into Excel and then re-importing it or keying it in manually.

“The technology shows the clients what we’re doing to really bring them and the brokers into the process,” Porter added. “They want weekly updates; some customers want daily updates for where we are. Having the technology that allows us to connect what our systems are seeing and what we’re working on has taken our international programs to the next level.”

Building a Partnership

Porter said that part of Swiss Re’s success really stems back to building a strong partnership with customers and brokers at the start. No program can truly survive without understanding and open communication.

“Getting carrier, customer and broker involved as early as possible is important,” he said.

Premium allocations, re-insurance agreements, binders sent out, policies issued — all that and more is needed to make a global program work. There are milestone dates that need to be met in order to stay on schedule.

“The fronting carrier is the one that has to bring it all together and make sure that everyone stays on track, but we can’t do what we do if we have a client that’s not interested in giving us the information we need or helping with their local offices. And the same is with brokers. We can’t make the program work without the help and support of the brokers who are placing the business and are really our partners in making sure that we’re performing,” Porter explained.

“Each of those three entities has a role to play in a successful global program.” &

Autumn Demberger is a freelance writer and can be reached at [email protected].

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.