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International Programs: Operating Principles and Common Misconceptions
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Mastering risks internationally
For a company investing in the international Whether through acquisitions, exports, or local subsidiaries, the diversity of regulations and practices specific to each country represents a real challenge in terms of risk management and insurance. One solution to control these risks and secure the activities of a multinational company is to subscribe to an international insurance program.
While harmonizing the coverage on a group scale, thanks to negotiating a single contract covering all locations. This offers a better readability of the terms of coverage for exhibitions across different countries, while allowing the parent company to maintain control over premium budgets.
This device allows for risk pooling While harmonizing the coverage on a group scale, thanks to negotiating a single contract covering all locations. This offers a better readability of the terms of coverage for exhibitions across different countries, while allowing the parent company to maintain control over premium budgets.
While harmonizing the coverage on a group scale, thanks to negotiating a single contract covering all locations. This offers a better readability of the terms of coverage for exhibitions across different countries, while allowing the parent company to maintain control over premium budgets.
The Master contract, cornerstone of borderless protection.
The operation of an integrated program is based on the issuance of a main contract in the name of the parent company, called the "Master" contract, which serves as a reference to define the coverage terms on a group-wide scale.
This contract can be supplemented by local policies called "integrated" policies, implemented in each country where the company is established.
These local policies allow compliance with the regulatory requirements of the country, issuing certificates in the local language, and managing claims at the local level.
The link between the Master policy and the integrated local policies is provided by the DIC/DIL clause.
This clause allows the Master policy to intervene in the event of a difference in conditions (DIC) or a difference in limits (DIL) compared with the cover offered by the local policies, thus ensuring uniform and optimum cover for the whole group.
The received ideas
We have carefully selected the three most common misconceptions regarding international coverage in order to analyze them in detail and deconstruct the prejudices associated with them.
Only very large international companies can subscribe to an international insurance program.
No
It is false to think that only very large international companies can subscribe to an international insurance program. The number of locations is not the determining criterion; rather, it is the culture and organization of the company that play a key role.
Indeed, if a company adopts a highly decentralized strategy, with strong local autonomy and little control from the parent company over its subsidiaries, the implementation of such a program will be more complex. This system relies on centralization of information and decisions, with the parent company being responsible for negotiations on behalf of the entire group.
An international program represents a high cost in terms of premiums.
No
An international program allows for economies of scale by grouping all risks within a single insurance solution. Instead of following the fluctuations of local markets and negotiating terms and conditions separately for each country and subsidiary, the company opts for a global premium covering the entire geographic scope involved.
This approach offers better cost control and strengthened control over the overall insurance budget. However, be careful of the minimum premiums required by insurance companies to deploy this type of solution, which should be carefully analyzed before subscribing.
An international program is complex to manage.
No
The establishment of an international program relies on effective communication between all stakeholders - company, broker, and insurer - both at the central level (home country) and at the local level (host country).
When this communication is smooth and the operating rules of the program have been defined and validated in advance by all stakeholders, its management is no more complex than subscribing to policies on a country-by-country basis. On the contrary, this solution is particularly suitable for companies seeking to strengthen the centralization of information and control over their strategic decisions.
Need to know more?
Contact our International Director!
Anaïs Noël
Anaïs Noël
International Director
With a Master's degree from ENASS and an MBA in Management, Risks, and Control from the University Paris Dauphine, she brings over 10 years of valuable experience from her tenure at WTW before joining Howden France.
An expert in international programs and assisting multinational clients, Anaïs leads as our International Director, ensuring top-notch services for our clients in import and export. She plays a pivotal role in fostering synergies between Howden France and the broader Howden network
