Shiwei Jin, Head of Multinational Solutions for AXA XL in APAC & Europe explains why more and more companies are seeking the control and certainty of cover offered by multinational insurance solutions.
What is driving growing interest in multinational insurance solutions?
Interest from multinational companies in global and regional insurance solutions is being driven by a number of factors, most notably the global nature of trade and business, and the expansion of centralized risk management within multinational companies and their supply chains.
Growing demand is also driven by the bigger role of multinational solutions in the risk management world. Through globally coordinated risk engineering and analysis, risk managers can identify vulnerabilities across their international operations and implement targeted risk mitigation measures and enhance risk management protocols.
How do they help companies navigate today’s uncertain and complex risk environment?
Given the evolving and challenging risk landscape, attaining the right multinational insurance solution holds even greater significance today, both in terms of structure and implementation. Placing key risks and business requirements at the center of a multinational solution supports risk evaluation, risk transfer and mitigation, and provides greater transparency, certainty and consistency of insurance coverages, claims and risk consulting. It also helps cultivate and enhance integrated and centralized risk management practices.
How does a multinational solution differ from other forms of insurance?
A true multinational insurance solution combines a master policy – which provides a common set of coverage terms and conditions worldwide – with local policies that meet local client needs. These are managed as a single, centralized, coordinated and compliant program. Alternatively, a company can cover its global risks via a policy with worldwide coverage, or through unconnected standalone local policies purchased by each local operation. But these alternatives have their limitations.
Can you give an example?
One of our clients had a decentralized program with a diverse set of locally purchased general liability policies, with significant variations in limits, terms, conditions and exclusions. This imposed considerable administrative burdens on the client and caused coverage gaps and potential compliance issues. Furthermore, the involvement of multiple insurers contributed to inconsistent service levels and policy responses, amplifying uncertainties.
After a comprehensive evaluation, a more efficient multinational solution was formulated, aligned with local regulations, ensuring consistent coverage and service through centralized coordination. This not only addressed existing issues but also accommodated the client's growth strategies, guaranteeing seamless coverage expansion into new territories.
Who should consider a multinational solution? Aren’t they just for large firms?
Not at all. Multinational insurance solutions are not confined to any particular industry, company size, geographic footprint or risk type. However, the value proposition for a multinational solution is particularly strong where certain risks or industries demand a worldwide or regional solution that provides consistency and certainty of coverage, backed by risk appropriate and compliant local policies —challenges that standalone local solutions or global policies may struggle to address. They also work best with an integrated and centralized risk management approach that facilitates the evaluation, transfer and mitigation of risks on a regional or global scale.
Where do you start?
Structuring a multinational solution starts with understanding the client’s business needs and priorities. Our dedicated multinational solutions’ team works with a client and their brokers to translate their business needs into a risk profile. We then consider six key elements for structuring the multinational solution - coverage options, master policy wording, local policy coverages, appropriate limits, premium and claims requirements – and align them with the client’s risk profile, business requirements and the local regulatory and market environments.
What about compliance with local requirements?
Certainty of a multinational solution is vital to multinational organizations, even more so in today’s uncertain world. Compliance with the ever changing regulations for local policies is critical to achieve such certainty and prepare for such changes from a risk transfer perspective. By partnering with a specialist multinational solution insurer, organizations gain access to invaluable local insurance insights and expertise —essential elements for deploying efficient and compliant insurance solutions.
What are the main challenges?
The implementation of a multinational solution is one of the biggest challenges. I often liken a multinational solution to a dragon boat —a seamless performance requires the entire team to share a clear objective, maintain coordinated communication and adhere to an agreed upon action plan among AXA XL across our network, our clients and their brokers.
In this context, knowledge is crucial. Our leading proprietary Multinational Solutions compliance tool details unique requirements and local market practices in more than 200 territories where we offer coverage. It gives our colleagues on-demand access to information on issuing requirements, licensing and regulation, mandatory retentions and taxes, with over 900,000 records updated by our network experts and governed by our extensive Multinational Solutions Knowledge team. From pre-bind and quote to post-bind implementation and claims handling, we support our clients with our knowledge of regulatory requirements and operational expectations, guiding them in a practical manner wherever their operations are.
Do multinational solutions generate savings?
Price is a vital consideration, but it's essential to recognize the wider benefits of a multinational solution, such as broader and compliant coverage and elevated limits across the entirety of the program. Ultimately, when adversity strikes, having a dependable insurance partner and an appropriate solution is indispensable to swiftly and confidently resume business operations.
What are the latest developments in the multinational solutions space?
The multinational insurance market is very dynamic. One interesting area of innovation is with regards to the use of technology. Both multinational clients and insurers are exploring a range of technologies – including Application Programming Interface (API) and GenAI - to drive efficiency, transparency and service, as well as leverage data analytics. At AXA, we are focusing on growing and strengthening our multinational businesses with rigorous execution and operational excellence. Automation, data and AI are key to that goal.
For example, AXA XL’s Multinational Solutions Client Portal monitors each client’s portfolio's movements in real-time, including the status of master and local policies, local premium payments and captive cessions, and provides them with real-time alerts for any significant changes or updates. Technology helps us manage every part of a multinational solution and provide end-to-end transparency, so all our clients always know where, what and how they are covered around the world. That is how we help our clients get back to business faster.
Do multinational solutions also help with coverage of technology risks?
Multinational insurance solutions are particularly relevant for cyber risks, a relatively new, complex and continuously evolving threat. Clients insuring cyber in a multinational solution will typically work with highly skilled underwriters who understand cyber risk in different parts of the world. Multinational clients will also be able to access risk mitigation services, as well as specialist incident response services instantly in country or from all over the world in a compliant manner.
Are there other areas where AXA XL is helping multinational companies address challenges?
Some companies want to use of their captive and multinational solution to provide insurance solutions to their own clients. While there is no off-the-shelf product that can do this across multiple territories, it is possible to design a compliant solution in partnership with the fronting insurer. Similarly, a standard multinational insurance solution might prove insufficient where local coverage standards fall short. In such cases, a full manuscript wording or bespoke endorsements are needed. This requires an insurer that can navigate local regulations and market norms to achieve compliance and contractual certainty.
Why choose AXA XL?
Wherever you are in the world, our expert teams are ready to understand your needs and create solutions that work. With over 40 years of experience, we have extensive knowledge in structuring multinational solutions, providing coverage across 20 plus products in more than 200 territories - one of the most comprehensive offerings in the market. Our client-first culture brings this together. With a proactive approach, we work tirelessly to protect our clients’ interests. We plan carefully and collaborate closely with risk managers and their brokers, ensuring every multinational solution runs with certainty, transparency, centralized control and compliance every step of the way.
