Multinational Insurance: This Isn’t Rocket Science - It’s Harder

By Alfred Bergbauer
 
How hard can it be to issue a certificate of insurance, write a policy and collect premium? Most brokers and clients would assume it shouldn’t be that hard – even if the policy needs to span continents. In fact, if the occasional delay or error occurs, we’ve all likely heard or thought, “How hard can it be to do this? It’s not exactly rocket science.” And that’s actually quite true, although not for the reason you may think.
 
Rocket science is defined by Merriam-Webster as, “the science of designing or building rockets; also: something that is very difficult to learn or understand. The job is challenging, but it's not exactly rocket science.”
 
Multinational insurance requires coordinating specific service and binding instructions, invoicing, binder and policy issuance, engineering services, and claims payments across multiple cultures in multiple countries. Add to that each country’s varying currencies, languages, insurance requirements, and tax and legal systems, all reaching across multiple time zones.
 
Looking at it in those terms, I have to agree with the observation, “It’s not rocket science.” I’d say executing on a multinational insurance program is much harder than rocket science. Why? Because there are many more variables at play conspiring to delay and deviate from the intended plans of the insurers, brokers and clients who are collaborating to execute on an insurance program.
 
In rocket science, mathematics, combustion and thrust, avionics, and environmental factors can be calculated to determine within a precise statistical certainty that an outcome can be achieved. In multinational insurance, the variables become more complex and multifaceted.
 
Further complicating the process, many small to midsize businesses, and perhaps even some larger clients, often don’t have dedicated risk management teams to create a centralized approach to procuring coverage around the world. This buying style can unknowingly affect the U.S. parent company’s income statement and balance sheet if there are gaps in local coverage, insufficient limits are purchased, or if unintended tax consequences result from a foreign loss paid in the U.S.
 
While there are no mathematical formulas for multinational insurance, there’s an intangible need for cooperation. The Hartford has partnered with AXA to offer local insurance coverage in over 150 countries to help simplify the process of obtaining proper multinational coverage. Knowing how challenging the multinational insurance space can be, we conducted a lot of research before choosing our partner. AXA not only has an impressive network spanning more than 150 countries, but offers superior client service and a dedication to providing risk management and insurance solutions. After partnering with AXA, we spent a year piloting a new multinational program in select regions to ensure we got it right.
 
The Hartford’s new multinational products can provide seamless coverage in more than 150 countries with a single point of contact in the U.S., and the high commitment to quality and customer service that our partners and clients have come to expect from The Hartford. It’s borderless insurance, delivering a coordinated insurance program for the risks we cover.
 
Don’t get me wrong: I have the utmost respect for rocket scientists and the great efforts that they put into their craft. What they do is hard – but it’s not multinational insurance!
 

About the Author

Alfred Bergbauer is the head of Multinational Insurance at The Hartford.
 
Foreign local policies may be underwritten by affiliates and partners in the AXA Corporate Solutions Assurances network or by other locally licensed foreign insurers. The Exporters and CMP policies are underwritten by Hartford Fire Insurance Company in the U.S. and issued to the U.S.-based insured, covering its financial interest relating to its exposures located outside of the U.S. Generally, claims under foreign local policies will be adjusted and paid locally by the local insurer with The Hartford providing oversight and serving as the U.S. insured’s point of contact in the U.S. Claims under the Exporters and CMP policies will generally be handled in the U.S. and paid to the U.S. insured in accordance with the terms and conditions of the policies. The Hartford may contract with AXA Matrix Risk Consultants and other risk consultants to perform risk engineering services outside of the U.S.
 
Not all coverages are offered in all jurisdictions and no coverage may be provided in some jurisdictions where restricted by law. All policies should be read carefully to identify all exclusions, limitations, and other terms and conditions. In the event of a conflict between any policy and this document, the terms and conditions of the policy shall control.
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, One Hartford Plaza, Hartford, CT 06155.
 
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including issuing company, Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.