German insurance symposium

Thursday 27 March, 2008

I attended the Panel Discussion: Managing the Complexity of International Insurance Programs from a German American Viewpoint  I requested a copy of the powerpoint presentation to put up here & was told GACCOM keeps its content on its own site.  Last I checked, they haven’t put up the presentation yet.  Here’s what I learned.

Traditional Controlled Master Programs-Germany/Reverse Flow Programs are local policies which sit on top of local policies from other countries with difference in conditions (dic) & difference in limits (dil) coverage in other countries.

Traditional Controlled Master Programs-US/Home Foreign Programs  provide master policy dic/dil coverage on top of local policies in other countries aside from US policies.  These are underwritten in the US for foreign clients.

The key to program selection & implementation is effective communication between the insurer, insured, & broker.  Things to consider are global/local expertise, coverage, capacity, price, network, IT capabilities, & claims service.  On an ongoing basis, program maintenance issues to monitor are the changing marketplace & regulations, continued program improvements, loss control & prevention, acquisitions/divestitures, claims.  It’s important to maintain flexibility & adaptability to change in exposure, country, & market conditions.

The panelist from Porsche Business Services has had a Reverse Flow program since y2k & it has been very successful. Their risk management is centralized, so they can now take on greater risks, & their premiums actually went down.

A few other things I picked up:

-The US is 1 of the most feared markets by foreign insurers because of the possibility of product liability claims & it’s highly regulated.   For example, the Germany CEO of a German company setting up in Indiana’s biggest concern was employee liability insurance.

-deductibles vary by country.  They are reputably high in Germany while low in France, but discrepancies are narrowing.

-European underwriters focus on longer term relationships & can be more creative in creating coverages while in the US we’re less so & more litigious.

-cultural differences do come into play in language differences in contracts & levels of risk aversion (the Krauts are conservative risk-avoiders)

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