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Marsh uses its network spanning 130 countries around the world to provide total services including gathering risk information on a global basis, analyzing risks, providing benchmark data, designing global insurance programs tailored to risk circumstances and customer needs, conduct marketing (obtaining quotes) and negotiations with insurers, and providing support in all phases from management and operation after introduction to risk and claim occurrence.
Marsh also provides services relating to risk analysis, evaluation, and proposals based on risk surveys conducted by engineers who specialize in risk as well as coverage regulations and premium taxes through specialized practices within the Group.
Marsh has extensive achievements and many years of experience with the following insurance policies for Japan-based global firms.
- General liability and umbrella insurance
- Product liability insurance
- Property and business interruption insurance
- Logistics insurance
- Trade credit insurance
- D&O casualty insurance
- Recall expense insurance
Background to the Development of Global Insurance Programs
Global insurance programs are a method of arranging casualty insurance policies developed for global companies in Europe and the United States and are currently used by many global enterprises in those regions.
Structure and Functions
A global insurance program consists of a master insurance policy issued in the country where operations for central control of the program are located (normally the location of the group’s parent company head office) and local insurance policies issued in each country where operations are conducted in accordance with needs to satisfy coverage regulations and perform local claim handling.
The master insurance policy includes difference in condition (DIC) and difference in limit (DIL) functions applicable to the compensation details and compensation limits uniformly determined on a global basis.
Role and Functions of Additional Participants
When creating a global program, from the perspective of centralized management of risks, it is generally necessary to uniformly select insurers, agencies, and brokers.
One condition is that the selected insurers, agencies, and brokers have global operations and conduct business globally. In the case of an insurance company, even if the company does not have a business license in its own name in a certain country, it may be able to have a partner company present in that country issue policies on its behalf.
Effects of Introduction
By introducing a global insurance program, the disadvantages of introducing individual insurance arrangements are eliminated. In terms of cost, centralized negotiations that take advantage of economies of scale and technical cost reduction innovations such as shared compensation limits for the entire group make it possible to cut premiums. In addition, centralizing the negotiation liaison can substantially reduce the labor time burdens for insurance arrangements on the group as a whole.
By applying details of compensation and compensation limits based on uniform standards to overseas operations covered by a global insurance program, duplicative coverage and coverage omissions can be eliminated and it is easier to determine coverage status, and the selection of uniform insurers, agencies, and brokers enables the timely information of risk information and centralized risk management.
Coverage Regulations and Tax Consulting
Coverage regulations and tax compliance regarding premium taxes are important issues for global company business managers and risk managers. Marsh provides support regarding unique regional coverage regulations and premium tax issues through its Insurance, Regulatory and Tax (IRT) Consulting Practice within the Group.
Marsh collects information on coverage regulations and premium tax developments in approximately 70 countries through its network of local specialists and can provide necessary support and information regarding these issues to customers.
Frequently Asked Questions
Question 1: How much will insurance premium costs go down as a result of development of a global program?
Question 2: How long does it take to develop a global program?
Question 3: How much are necessary costs other than insurance premiums?
Question 4: How much experience does Marsh have creating and operating global programs for Japanese-based global firms with a controlling office in Japan?