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A Foreign Concept: International Insurance

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Presentation on theme: "A Foreign Concept: International Insurance"— Presentation transcript:

1 A Foreign Concept: International Insurance
3/22/2017 A Foreign Concept: International Insurance March 22, 2017 March 9, 2006 CE Class - International Insurance

2 Agenda: Assessing International Exposure
International Package Policy Overview Mistakes and Misconceptions Speaking the Foreign Lingo… Questions & Answer Session March 22, 2017

3 Facts & Figures…. $40.4 = export merchandise shipped 2006 (6th among the states in this category) 2002 to 2006 merchandise exports for Michigan increased $6.6 billion (20%). MI recorded the 13th largest growth in exports among the 50 states. MI exported to 195 foreign destinations in 2006. Largest market(s) = Canada ($23.8B), Mexico ($4.7B), Germany ($1.2B) Other Top Markets: Japan, China, United Kingdom, Venezuela, Austria, France and South Korea. Of MI’s 30 biggest markets, exports to Iraq grew fastest over Surging from 45k to118m or 263,000% Exports: Russia (up 674%). China (up 257%), Venezuela (up 186%) March 22, 2017

4 What is being Exported? Manufactured Goods (97% of all exports)
Transportation Equipment ($21.2B, 52%) Machinery Manufactures ($4.1B) Chemical Manufacturers ($3.2B) Primary Metal Manufactures ($1.9B) Computers and Electronic Equipment ($1.5B) Fastest Growing Manufactured Exports Transportation Equipment grew $1.6B *Information provided by the State Export-Related Employment Project, International Trade Administration, Bureau of Economic Analysis, Origin of Movement State Export Series, and Bureau of the Census. Does not include statistics on products related to non-manufacturing sectors. March 22, 2017

5 We live in a Global Economy!
International Trade now accounts for 1/3 of the GDP in the USA. Companies that are managed in the U.S, can be sued in the U.S., no matter where the complaint occurs or where the product is manufactured. March 22, 2017

6 What can really go wrong?
Employee travel Sickness, Injury, Death Occupational and Non-Occupational Injury/Illness Car Accident(s)/Violations Injury, Imprisonment, Fines GL Exposure Bodily Injury, Products Liability, Premises Legal Damage Kidnapping, Property Damage, Cargo Theft, Extortion Linguistic and cultural differences; Theft or lost documents March 22, 2017

7 Knowledge is Power! Most every U.S. company has some foreign exposure(s): Trip Travel Importing/Exporting/Licensing/Franchising Foreign operations/Subsidiaries/Joint Ventures Strategic Growth and Acquisition Don’t “assume” it’s covered or that it doesn’t exist. Protect your book of business “If you’re not writing it, someone else will!” March 22, 2017

8 How do you assess the exposure? ASK!
Do they have overseas sales? Do they have employees traveling abroad? Do they exhibit or participate in Trade Shows overseas? Do they work on any military bases abroad? Do they have facilities overseas? Do they have employees living abroad? Do they rent or own cars overseas? Do they export goods outside of the USA? Do they sponsor trips, tours or study groups abroad? March 22, 2017

9 If they answer YES to any of these questions, then they need International Insurance Coverage!
March 22, 2017

10 An International Package Program:
Foreign Commercial General Liability Foreign Auto Liability Foreign Voluntary Workers Compensation & Employers Liability Travel Accident & Sickness Real & Personal Property Insurance Kidnap & Ransom, Extortion Marine Cargo Political Risk Crime March 22, 2017

11 Advantages of a Package Policy
Nine lines of coverage One Underwriter One Premium One Policy One Invoice Ease of Doing Business Can include local coverage for foreign operations March 22, 2017

12 Who fits the Profile? US/Canadian Corporations with foreign exposures
Middle Market/Corporate Accounts $25M - $500M in revenue worldwide Trip/Travel – Foreign Operations DIC/DIL or Controlled Master Program(s) May Require Local Policies (i.e. GL, UK EL) Guaranteed Cost Program Minimum Premiums = $2,500 and up March 22, 2017

13 Specializations: Universities and Schools Entertainment Energy
More than 100,000 students study abroad each year Entertainment Coverage for entertainers, their entourage and their equipment Energy Specialized approach to a sensitive class of business Non & Not for Profit Groups (NGOs) Missionaries (most often going to the more high risk countries and remote places) March 22, 2017

14 Target Markets: Importers & Exporters
Foreign Sales and Distribution Risks Manufacturers Professional practices: Legal, Financial, Advertising and Engineering Services Higher Education March 22, 2017

15 Mistake #1: Domestic GL will respond…
Product manufactured in U.S. is used in a finished product in Italy. Finished product causes injury to Italian child, whose family seeks damages from Italian and U.S. company. Lawsuit filed in Italian court is not covered under U.S. firm’s GL policy. March 22, 2017

16 Mistake #2: U.S. Work Comp insurance will cover it…
U.S employee is working temporarily in India and contracts Cholera . The employee is treated overseas and returns home seeking further treatment. Bills are denied as there is no coverage for Endemic Disease under the employee’s domestic worker’s compensation plan. March 22, 2017

17 Endemic Disease Noun 1. A disease that is constantly present to a greater or lesser degree in people of a certain class or in people living in a particular location. Source: WordNet Copyright © 2001 by Princeton University. All rights reserved. Examples: Hepatitis B, Typhoid, Malaria, Typhus Fever, Lassa Fever, Measles (U.S.) March 22, 2017

18 Mistake #3: No need to buy additional AD&D and Medical Expense Insurance.
Employee travels to China for work. Employee becomes sick, is treated at a local hospital and pays bill with personal credit card. Back home, employee’s medical carrier refuses reimbursement for extra-territorial medical treatment. March 22, 2017

19 Mistake #4: Don’t need to worry about insurance for foreign employees.
A British citizen is working in Brazil for a U.S-based employer. The British employee slips and falls on stairs at a restaurant, spraining their ankle and wrist. Worker is taken to a local hospital, but has no coverage under the British national health plan. March 22, 2017

20 Mistake #5: Easy to replace stolen or lost documents, money et al.
Employee travels to Hong Kong and has his briefcase stolen at the airport while gathering his luggage. All his money, identification and credit cards are inside. He does not understand Cantonese or Mandarin and does not know how to place an international phone call. March 22, 2017

21 Valuable Program Benefit = Emergency Assistance Services
Provide fast, life-saving help in an emergency Make international travel less troublesome Toll free or Collect (24 hr/7 days/365 days) English speaking assistance Proactive and Reactive resource for international travel Services; Not insurance! March 22, 2017

22 Travel Assistance Services:
Lost Documents Lost Personal Effects Embassy Information Security Evacuation Language Interpretation Legal Referrals Emergency Messages Emergency Travel Services Weather Currency Rates Bail Bonds Emergency cash March 22, 2017

23 Medical Assist Services:
Hospital Guarantee/Coordination Immunization Medical Record Storage Medical Transport Repatriation of Mortal Remains Medical Referrals Emergency Medication March 22, 2017

24 Speaking the Foreign Lingo…
Expatriate (Expat) A US National that is living and working abroad. Third Country National (TCN) A foreign national working in a foreign country (i.e. an Australian working in France) Local National (LN) A person who lives and works within their own country (i.e. a Chinese person working for a US owned or affiliated operation in China) Foreign Voluntary Workers Compensation (FVWC) Provides voluntary, not mandatory, US workers compensation benefits as well as standard foreign extensions, such as excess repatriation expense and endemic disease coverage; normally 24/7 coverage for trip travel. March 22, 2017

25 Foreign Lingo continued…
Foreign Auto Always on an excess basis over statutory limits; clearly not a substitute for local compulsory coverage. DIC/DIL Difference in Conditions, Difference in Limits; fills the inconsistencies and brings the firm’s insurance program up to a certain uniformity (US Market Standard) of coverages and limits. Repatriation Returning Home as a result of accidental injury or illness. March 22, 2017

26 More Foreign Lingo… Controlled Master Program (CMP)
A coordinated multinational insurance program under which coverage terms and pricing are centrally negotiated. Admitted Coverage Signifies that the insurance company is authorized (licensed) to conduct insurance business in the country where the insured has operations. Non-Admitted Coverage Coverage written or issued by an insurer that is not licensed or authorized in the country where the risk is located. March 22, 2017

27 Final Thought: The landscape of doing business has changed; so too, should your approach towards your client’s business and insurance needs. March 22, 2017

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