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Zurich

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.

Sponsored Content by Zurich

Managing Growing International Motor Programs

The motor fleet segment is seeing expansion, bringing with it a new set of exposures.
By: | November 3, 2014 • 6 min read
SponsoredContent_Zurich

As U.S.-based companies expand operations abroad and leverage new markets and growth opportunities in the global economic landscape, the need to move products or deliver services in multiple countries will often correspond with the need to find solutions to complex international motor fleet exposures.

Whether operating passenger vehicles, delivery trucks, long-haul trucks or heavy commercial vehicles, U.S. multinationals are indeed expanding motor fleets deployed overseas. And where there are vehicles, there will be fleet exposures as well as the need for proven, controlled international casualty motor fleet insurance solutions.

“This particular segment is a significant international growth area,” said Larry Boyk, head of International Programs, Casualty, Zurich Global Corporate in North America. “Most of our Fortune 500 clients already have or are expanding international operations, meaning that they are also expanding a host of casualty exposures, including motor fleet liability. So it’s important that they have a relationship with an insurance carrier that has the global scope and local capabilities to be able to accommodate these growing customer needs.”

Boyk explained that all international casualty motor fleet program components — including policy terms and conditions, premium allocations, risk engineering services, claims procedures and other essential components — must comply with all relevant local insurance regulations and tax laws, factors that can vary from country to country.

“International motor programs can be complicated, time consuming to manage, and deal with a myriad of tax and regulatory requirements,” Boyk said. “Our primary objective at Zurich is to take the complexity out of the implementation of international motor programs.”

In fact, Boyk added that many potential customers see international motor exposures as risks they don’t want to tackle under a master program. Instead, they may trust country managers to place these policies locally. While that may seem to be the most expedient approach, it fails to provide the customer with the centralization and control necessary to ensure consistent pricing and program management. In addition, allowing local contacts to place motor coverages themselves can leave potentially serious gaps in coverage, compliance, or both.

“International motor programs can be complicated, time consuming to manage, and deal with a myriad of tax and regulatory requirements.”
— Larry Boyk, head of International Programs, Casualty, Zurich Global Corporate in North America

“The insurance regulations and tax guidelines governing motor fleet and other lines of business will differ on a country-by-country basis,” Boyk said. “If coverages are placed with markets that are not up to speed with local requirements, there could be issues once a claim occurs. Also, buying coverage on a local basis could result in doing business with a local provider whose claims handling, risk engineering, or financial resources may not be up to par.”

According to Andrew Smith, International Programs Regional Manager, Casualty, Zurich Global Corporate in North America, Zurich has established itself as a leading player in the international motor program segment as its book of business has expanded.

“International motor can be difficult to do well and Zurich is one of the markets that is recognized for our global capabilities in meeting complex multinational needs,” Smith said. “We offer risk managers a value proposition that we believe is a major marketplace differentiator.”

Smith added that controlled motor programs provided by a single carrier are relatively recent phenomena, offering significant benefits such as ease of doing business.

“With Zurich, customers get consistency of pricing and coverage from a single carrier with demonstrated financial stability and global presence,” he said. “That is, as opposed to local managers purchasing local policies from several carriers, whereby risk managers may not know the local insurer’s ratings, stability, etc.”

Also, a controlled international motor program offers the customer consolidated loss data, policy and invoice tracking, as well as confirmation of premium payment. A controlled program also provides a single underwriting point of contact through which stewardship meetings, renewal strategy meetings and negotiations with the risk manager can take place.

Smith explained that international casualty motor fleet programs feature many “moving parts,” including various risk managers or country managers, or may have no local management at all. In addition to the possibility of multiple brokers, there could be leasing companies using different coverage methods, which means a lot of different individuals with existing broker and carrier relationships.

“It can be very tough to move those countries into the program,” he said.

Boyk noted that global brokers trying to bring multiple countries into a single controlled program can face challenges when trying to work with local brokers.

“In some of these situations, brokers handling the controlled motor programs can have difficulty getting the information they need on local policies,” he said. “This can be especially true when we are talking about very large, multinational fleets. Brokers and customers need a carrier with the infrastructure to handle a potential influx of claims. The broker and customer will also want to improve program performance, so we give them the necessary risk engineering support.”

Boyk points out that few markets have Zurich’s breadth of capabilities for casualty motor coverages. Headquartered in Switzerland with major operations located around the globe, Zurich insures millions of fleet vehicles worldwide. In addition, Zurich offers thousands of claims professionals and more than 900 risk engineers around the world, all of whom share information and risk insights with clients one on one and through symposiums, such as one recently held in Cameroon.

“We distinguish ourselves through our service and our network,” Boyk said. “When a risk manager looks at auto expenses on a global basis, he or she knows it can be costly. So when we deliver a fleet program, we can offer local and centralized service coordination as well as aggregated customer data as a value-added piece helpful in benchmarking and assessing program performance.”

In fact, Zurich’s innovative technology tools include a new web-based system empowering risk managers to access not only motor loss data, but also risk engineering data, safe driving information, local policies, local invoices, and local country tax and compliance information.

Boyk noted that complexity is a hallmark of international motor fleet coverage. In fact, motor coverage can be a constantly moving target from a compliance standpoint. Hence, Zurich closely monitors evolving local regulations with specialized attorneys to provide greater certainty to customers that their international motor programs will be compliant.

“No corporation wants to make headlines for violating regulations or tax laws,” Boyk said. “We offer an array of resources and tools — we call it Zurich’s Multinational Insurance Application — that can be effectively used on a country-by-country basis to stay on top of evolving insurance regulations and tax laws.”

Ultimately, given the sophisticated data tools, claims, and risk engineering services Zurich provides, risk managers can make significant progress in learning where motor losses are coming from, what can be done to improve loss frequency and severity, and how to produce sustainable, positive results in a particular country or geographic region.

Learn more about Zurich’s International Casualty Motor Solutions at zurichna.com.

Larry Boyk can be reached at larry.boyk@zurichna.com.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Sponsored Content by Zurich

Zurich’s Focus on Total Cost of Risk Sets It Apart

Zurich's expertise speeds up the identification of insights for risk management departments.
By: | September 15, 2014 • 6 min read
SponsoredContent_Zurich

Some business risk is easy to control, but much risk is difficult to predict. When it comes to casualty risk exposures, smart risk management organizations follow a “big picture” philosophy to reduce that difficulty.

Most of all, they pay close attention to the concept of Total Cost of Risk, or TCOR.

With that in mind, Zurich Global Corporate in North America (GCiNA) has effectively built its Domestic Casualty value proposition on the principle that nothing truly supersedes the calculation of TCOR as a means to reduce both premium and claim costs.

And, said Brandon Fick, head of Domestic Casualty, Zurich GCiNA, Zurich leads the casualty industry because it not only offers a TCOR proposition as a prime benefit to insureds, it also puts skin in the game to back up its TCOR beliefs.

“TCOR is a major focus at Zurich because it can be a clear differentiator,” Fick said. “There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”

Fick explained that in the large corporate business casualty market, companies typically take on the majority of the risk themselves through large deductibles and retention programs. Of course, they also buy insurance coverages for added protections. But in the very competitive casualty business, the drive for better ways to manage risk — all the factors that go into determining TCOR on an insurance program —are often pushed aside for the sake of price. That’s a very shortsighted approach, Fick said.

Fick said Zurich’s decision to focus on TCOR makes sense because it leads to high business retention and creates a strong customer-carrier interaction that ultimately results in keeping losses and costs down.

“We are always looking to help our customers drive a better outcome,” Fick said, adding that Zurich initially takes a holistic, 360-degree look at pre- and post-loss activity to see if a business is getting the most for its risk management dollar. “We offer data insights through sophisticated tools that can measure results and identify opportunities to improve.”

SponsoredContent_Zurich“TCOR is a major focus at Zurich because it can be a clear differentiator. There are very few companies who can match our offerings regarding TCOR. Our customers are not just buying insurance; they are also buying Zurich’s expertise as an extension of their risk management department.”
— Brandon Fick, head of Domestic Casualty, Zurich GCiNA

Once Zurich performs that initial analysis, the company’s claims and risk engineering team jointly creates a detailed plan that will go a long way towards reducing both claim frequency and severity.

According to Fick, the Zurich differentiator lies in its extensive — and proprietary — tool kit, which has been years in the making.

In fact, about five years ago, a prospective customer was feeling some pressure in their program and was looking for a carrier that could help them identify areas that needed improvement. Zurich specifically drilled down into the customer’s transactional outcomes by using an internal tool to identify any potential missed financial opportunities through overpayment of claims. The result was a substantial savings of 20 percent that Zurich was confident they could deliver. When they told the client about their findings, the response was, “Prove it.”

So Zurich Casualty discussed the results in detail with the customer and offered something unprecedented — a guarantee that its analysis would prove accurate and deferred an amount of the total premium. The basic proposal was that if Zurich’s calculations were right, Zurich would recoup the deferred amount and receive a bonus too.

“Within two years, we knew we had proven our findings,” Fick said, adding that the experience gave Zurich the confidence to expand the program. “We concluded we have this unique tool, why are we not using it nationwide?”

The basic TCOR premise is taking a “forensic” approach when auditing the claims process. And while the original concept was focused on claims alone, Zurich started looking at the pre-loss side as well, delivering accurate ROI numbers to clients when they agreed to commit to the entire TCOR process.

“Big data is the buzzword today; everyone in the industry is talking about it,” he said. “We’re actually taking big data and using it to create a tailored solution for the customer.”

Zurich’s underwriting team has the company so confident, Fick said, in the impact their TCOR proposition will have on driving better outcomes. Their belief is so strong that they empower their underwriting teams to offer up front premium considerations that are normally afforded later in the relationship.

“Again, we want our customers to think of us as an extension of their risk department,” he said. ”I have yet to meet a risk manager who has commented about being overstaffed. Our customers realize they need partners; most of them don’t have the resources or tools to do an in-depth analysis of their results to identify where they may have some pressure in their program.”

Fick noted that Zurich Casualty’s TCOR approach is not for every customer. It really is set up specifically for customers who are dedicated to continuous improvement and are already using some form of analytics to help in decision making. They also must share Zurich’s belief in the value in collaboration and demonstrate the commitment to execute on Zurich’s TCOR recommendations.

“It’s a 6 to 12 month life cycle,” Fick said. “Before we even look at a number on a piece of paper it requires having a lot of detailed discussions with the customer so that we can understand what they have done to manage their risk.”

Zurich formally rolled out its complete TCOR core strategy during the first quarter of 2014. But, Fick said, the company has been implementing elements of the final product during the past three years. It started out on the claims side, but today covers every aspect of risk. Since it began using its TCOR strategy with clients in 2010, Zurich Casualty has increased its new business writings 270 percent — an impressive showing by any measure.

“This is the next wave of underwriting,” Fick said. “Everyone may be talking about big data, but you have to deliver insight, solutions and a differentiated product to the customer. We believe strongly that our TCOR proposition is that critical differentiator.”

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Sponsored Content by Zurich

Zurich Global Corporate Casualty Takes Innovative, Unique Path to Success

By combining three areas of coverage, Zurich Global Corporate Casualty offers customers better pricing as well as improved collateral, coverage terms and conditions.
By: | September 2, 2014 • 5 min read
SponsoredContent_Zurich

Five years ago, Zurich Global Corporate in North America (GCiNA) began to create a formidable casualty practice.

Yet even with early successes, two years ago Zurich’s casualty practice made a dramatic change in the way it does business. In essence, Zurich didn’t modify its casualty product lineup, which is what other competitors typically do when trying to grow business. Instead, it changed its very culture by accomplishing something other casualty carriers had not tried (and have yet to duplicate).

At the time, Brian Winters, executive vice president and head of the casualty practice, Zurich GCiNA, pushed the organization to form a practice that brought domestic casualty, excess casualty and international casualty together under a single roof. Today, Zurich remains the only large global casualty market with all three areas reporting into one P&L entity. And, as Winters explained, Zurich has not looked back and is reaping the benefits of the energizing effect of its innovative market strategy.

“The main idea is to offer clients unique casualty coverage in a single, smooth, transparent process. We have no silos to manage,” Winters said, adding that much of the business being generated by Zurich’s unique approach comes from brokerages willing to adapt and forge new best practices. “Currently, we target specific customers who fit this mold. Most of all, it gives them consistency. For example, all three of those coverage areas can have the same effective policy dates, broker and risk manager buyer.”

Winters explained that while he was managing Zurich’s domestic casualty practice two years ago, his extensive work with clients in the field uncovered the fact that excess casualty and international casualty could be added to the mix. Customers often asked about the concept. But it would require a total rethinking of how to conduct Zurich GCiNA’s casualty business.

“Client feedback drove the synergies that led us to restructure the way we operate,” he said. “While we already offered a deep, comprehensive array of casualty coverages and related services for global clients, they wanted a simpler, more direct way of doing business.”

Winters processed that client feedback and — interestingly enough — it dovetailed with his team’s sometime inability to meet customer needs. Plus, clients (and brokers) told Winters that Zurich was a sleeping giant, with much potential in the casualty market. “We had the natural efficiencies to make this work, and not everyone can say that,” Winters noted. “Listening to customers and brokers saying that Zurich had it all and should be leading the marketplace, well that got the idea spinning.”

SponsoredContent_Zurich“It’s not typical in our industry that risk managers can go to the CFO and say they are able to take three casualty lines and get the best deals in collateral, pricing and coverage.”

— Brian Winters, executive vice president and head of the casualty practice, Zurich GCiNA

“This strategy is focused on a unique customer, but we have a definite advantage because our competitors tend to be organized around products,” he said. “We built this around customer need, not products. To do what we have done, you have to change your whole culture and structure. It’s not easy and others can’t be that flexible. They can’t turn that ship around.”

Basically, Global Corporate Casualty can give customers coverage in the three areas with a single coordinated proposal, rather than three individual proposals. That way, not only can customers benefit from better pricing, but they also can take advantage of improved collateral, coverage terms and conditions.

“We get a unique view of the insured’s culture as well,” he said. “When they buy all three coverages from a single market, it offers unique opportunities in areas including claims and risk engineering. It’s the best way to show Zurich’s value proposition.”

Winters says feedback from customers has been extremely positive, especially the idea of getting the best a carrier has to offer across multiple lines — something that is much easier to accomplish when the carrier’s P&L is managed by one business unit. Customers also favor that all three areas offer multi-year type of arrangements and good stability on important lines of business, that and Zurich’s proven financial stability in the market.

Of course, there are the built-in efficiencies in underwriting and enhanced performance guarantees, so if customers have service issues they can more easily get them resolved.

“It’s not typical in our industry that risk managers can go to the CFO and say they are able to take three casualty lines and get the best deals in collateral, pricing and coverage,” Winters said. “That offers a lot of attractiveness.”

Internally, Winters said the move has energized and galvanized Zurich’s teams across each line. You can literally sense the excitement when they are working together. The result is higher confidence levels among the teams, which translate into an enhanced customer experience.

Of the three lines, the most critical addition for Zurich was its ability to bundle international in with the domestic and excess, something that has not been duplicated. Our International Casualty group offers many unique solutions for customers and a real sense of confidence to brokers and customers about having a state of the art program. Very few markets can complete with this group or sophisticated program.

Zurich’s big advantage is the company’s proven ability to minimize risk on compliance issues — a very important and growing factor today with the way the global markets are changing. Large customers are no longer willing to take increasingly complex compliance risks. Along those lines, Zurich offers a state-of-the-art app, Zurich Multinational Insurance Application that can help customers in sorting out compliance issues.

“Making structural change is not easy, but has been well worth it for Zurich,” Winters concluded. “We have had a significant increase in new business across the casualty practice since its inception. Cross selling opportunities have been improving steadily across all of Zurich’s businesses. We continue to lead and exceed expectations and continue to improve. In the end, financial performance and customer retention are the true barometers of success.”

Brian Winters can be reached at brian.winters@zurichna.com. For more information, visit zurichna.com/corporatebusiness.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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