Global programmes: Managing the network
This article was first published in Commercial Risk Europe.
Nowadays, no insurance company has a network of fully owned subsidiaries that can issue policies across the 249 countries listed by the Insurance Services Office, Inc. Therefore, global program underwriters also rely on network partners to complement their network of owned affiliates and licenses. The ability for a network partner to issue a policy swiftly is key, but a coherent strategy on claims handling is just as crucial. Philippe Gouraud, head of strategic client and broker management at XL Catlin, explains how risk managers can make the most of their insurer’s network.
What makes a successful global program network?
The success of a global program relies upon the insurer’s ability to execute quickly and accurately, by providing information to an overseas office or hub very fast. With global programs, doing things well – for example issuing policies on time – is, and should be, what is expected. If you buy a new car and it starts the first time, you don’t call the dealership to say thank you! It is the same with global programs – nobody is going to thank their insurer simply for issuing a policy in Guatemala on time. So we really need to make sure that we deliver a great service to our clients wherever they operate and wherever they need us.
We think of our network as we would of a living entity – our hubs are the limbs, reaching out to our network partners.
It’s a cliché, but true: You are only as good as your weakest link. Global program clients need their insurer to have great people, and a joined-up process – across geographies and lines of business - throughout all the stages of the underwriting process, right through to claims. And they need to be sure that their insurer and its network partners are aligned – especially on claims handling. It is vital for clients to have access to real time, accurate claims data. Not only does this give them vital risk management information but it is also required for updating the reserving position of their captive. All of XL Catlin’s business flows through the same IT system, which enables risk managers to have that global view.
How does a network work?
More than 90% of the global program premium that we handle flows through our owned network. And our owned network is mostly organized through branches. Where coverage is required in a country where we do not have an owned or licensed presence, we partner with local carriers our network partners. XL Catlin’s network partners are “local champions” that must meet not only stringent financial but also service requirements. The network partners are managed via a regional hub model: a Vienna-based hub that covers network partners in Europe, the Middle East and Africa; a Hong Kong hub, that manages the Asia Pacific network partners; and a Mexico hub that oversees our network partners in Latin America. This structure allows communication to be centrally managed: for example, our partner receives just one telephone call from a single hub covering five cases, rather than five separate calls from five different underwriting centres. The result for the client, from an operational standpoint, is that its program is managed by people that have developed a close working relationship with our network partner. We share the same values, the same standards everywhere that coverage is needed. We think of our network as we would of a living entity – our hubs are the limbs, reaching out to our network partners. And to ensure consistency in the service delivery and global coordination, we also have a Global Program Centre of Excellence, with staff and leadership in London, New Delhi, and New York. In a way, that’s the brain and the heart of our network. And it beats 24/7!
How can risk managers get the best out of the network?
Risk managers need to understand how their insurer’s network works. You can look at a car and think it is beautiful, but if you are going on a critical mission you might want to look at the engine to understand how it works and whether it will take you as far as you need to go! And that analogy holds true for a global insurance program. We invite clients to come and visit one of our hubs to see how it functions. Risk managers should also discuss their experiences with their peers and gain insights about how an insurer’s global program and network are working for them. At XL Catlin about one-third of the business we underwrite is reinsurance. This means that many of our network partners are also cedents to whom we provide reinsurance protection. We therefore have a truly strategic partnership. This benefits our clients because our network partners are not simply there to perform administrative tasks and issue policies, but treat us like their client. They are therefore invested in ensuring that global programs are implemented efficiently and provide the level of service expected by our clients.
As the risk landscape changes, what should risk managers expect from their insurers and network partners?
Working with an insurer that has global reach is, of course, important. But as companies’ businesses evolve and change, and the risk landscape alters, it is also important to work with an insurer and a network that has a diversity of risk expertise. The lines between property risk, terrorism risk, liability and cyber risk, for example, are all becoming more blurred. Risk managers need their partners to have innovation in their DNA and the specialty expertise to underwrite across all lines to help them navigate this changing risk landscape.
About the author
Philippe Gouraud is XL Catlin's Head of Strategic Client and Broker Management. He can be reached at firstname.lastname@example.org