Since the COVID-19 pandemic took hold, businesses all over the world have been contending with unprecedented disruption.
Some responded to the upheaval by temporarily changing the goods they produced. For example, there were manufacturers that pivoted from their traditional operations to make more personal protective equipment to help keep healthcare workers safe. Other businesses faced a different sort of challenge, having to shutter their physical locations and begin conducting their work remotely.
Some companies even found opportunity in the pandemic. According to data from Chubb and the National Center for the Middle Market, nearly a third (30%) of middle-market companies with international revenue say COVID-19 introduced new opportunities to do business outside the United States. For such multinational businesses, the opportunities (and challenges) COVID-19 introduced have been compounded by differing levels of pandemic recovery—as well as constantly evolving regulations and legislation—around the world. As a result, and amid the uncertainty around the coronavirus’s long-term impacts and what the return to work will look like across the globe, it’s especially important for multinationals to reassess their casualty insurance coverage needs.
Furthermore, it’s essential for risk managers at multinational companies to understand the regulations and requirements that govern insurance in each country where the company has operations. To name a couple of examples, multinationals with locations in India—which highly regulates the business of insurance—need to consider specific pricing structure requirements, how premiums are paid and how losses are paid, all of which are amplified by the current public health and economic climate. Multinationals with operations in certain parts of Latin America, on the other hand, need to consider the increasing coverage prerequisites and paperwork requirements for “know your customer” and anti money-laundering documentation. If multinational companies fail to abide by such local requirements, they can face financial and reputational consequences.
Notably, local insurance considerations apply to multinational companies with physical operations across the globe and multinational companies with partially or fully remote workforces around the world. The reality is that casualties can occur on the job no matter where work is taking place. If an employee working from home in Mexico sustains an injury, it could lead to an employer’s responsibility claim in that country. Thus, it’s crucial for multinational companies to carefully consider their global casualty insurance needs regardless of their work model.
Leveraging Technology to Manage Complex Programs
Multinational companies should work with an insurance carrier that offers technology solutions to help make managing complex multinational casualty insurance programs seamless and efficient. It is especially beneficial to work with carriers equipped with digital risk management platforms that offer transparency into easily accessible and navigable program data, as well as research tools that can help risk managers and their brokers stay on the pulse of local coverage requirements across the globe.
English translation services for local policies are also key. These services can help risk managers at multinational companies and their brokers understand local policy nuances and ensure that they aren’t left guessing when it comes to reading policy terms and conditions in another language.
Another critical feature such digital risk management platforms may offer is a streamlined process for requesting certificates of insurance. Prior to the introduction of this innovative capability, the process for requesting certificates of insurance was manual, time-intensive, and required the collaboration of multiple parties—from insureds to local brokers to global insurance carriers—operating in different time zones around the world. Since providing proof of insurance coverage can be time-sensitive and require a rapid turnaround, a seamless digital process for requesting certificates of insurance can help multinational companies avoid potential negative impacts on their business, such as losing a contract, that could arise due to a delay.
Managing Risk in an Evolving World
As the pandemic continues to unfold, multinational companies are navigating an ever-evolving business, risk and insurance landscape.
Whether they have changed or are in the process of changing how they operate, where they conduct business or how they work, multinational companies must take stock of the risks they’re facing and do everything in their power to stay protected. With this in mind, risk managers at multinational companies and their brokers should look to partner with an insurance carrier that can support their shifting needs—be it through underwriting experts who work with them to address their specific goals, digital risk management platforms that improve efficiency, or a robust global network to ensure smooth operation of the multinational program.
While global casualty insurance programs may be complex, together with their brokers and insurance carriers, risk managers at multinational companies can help protect their organizations and position them for success so they’re better prepared to navigate what’s ahead, as uncertain as the future may be.
Managing global casualty risks is highly complex. To ensure consistent and compliant protection across the globe, risk managers at multinational companies should assess a range of factors to help them better understand their companies’ unique coverage needs and program preferences. To this end, risk managers at multinational companies should consider factors including, but not limited to:
- What are key risk exposures facing the company?
- Why is the insurance coverage needed? What program structure and limits are needed?
- Does the company prefer to transfer the risk to insurance? On the other hand, is it important to retain significant risk?
- How important is the consistency of coverage and control of risk across the globe?
- Does the company prefer to pay premiums locally? Importantly, does the company want the claims to be paid locally or at the parent company’s location?
Laura Vest is executive vice president for Chubb Multinational.