INTERNATIONAL RISK MANAGEMENT

 

For more than 30 years, in Bazzi & Partners we have been following our own clients all over the World, having developed particular expertise in the creation and management of sophisticated, yet simple international programs.

Our dedicated team studies and defines insurance programs on the basis of the geographical needs of companies:

  • Integrated international programs;
  • Freedom of Service / F.O.S. Programs;
  • Non-Admitted Programs.

Through a wide-spread close-knitted network, we achieve our objective every day: to allow our client to keep the risk of its own branches under control, as if they were located just a few kilometres away.

Our partners manage your branch taking into consideration its global size within a Group, not just as an individual local entity. The peculiar risks of each individual Country are negotiated strenuously on the local market, just as we do with the Parent Company.

International Risk Management

What happens if a company has a foreign branch?
1. Separate approach

The branches decide on their own about their own risks.

Advantages: the local risk is covered according to local standards.

Disadvantages: duplication of coverages and coverage gaps between Parent Company and branch.

2. Integrated approach

The Parent Company and the branches are followed by the same broker, through a network of professionals.

Advantages: unitary and integrated management for the whole group; extended coverages and scale economies.

Disadvantages: none.

Independent policies

WITH SEPARATE MANAGEMENT EACH LOCAL UNIT HAS ITS OWN INSURANCE COVERAGES WITHOUT THE POLICIES HAVING A RELATIONSHIP AMONG THEM.

This type of risk management could, on one hand, make it possible to have coverages that support the requirements of each individual Country. However, the absence of a common direction makes it impossible to implement a clear and integrated risk management policy.

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Integrated International Program

For the main risks (Property, Casualty, Marine) program policies are stipulated by the Parent Company, to which local policies are linked for the foreign companies.

The regulatory system will be homogeneous and it will be integrated by the peculiar local needs on the basis of the so-called “Best Local Standard”. Moreover, an insurance Umbrella will be provided by the Parent Company country to all the companies of the group; that will standardise conditions, limits of liability and of indemnity to the level of the Parent Company policy. In this way the same coverages will be granted to the Parent Company and to the branches (which, due to their small sizes, could not have access to them individually).

The program considers the companies as one single entity, in this way also guaranteeing management of inter-dependencies in the event of a claim.

The concept of D.I.C. AND D.I.L.


Within an international program there is a policy called the Master; usually stipulated in the country where the Parent Company resides, the policy Master acts as a link among the varies local policies and as an insurance umbrella for the foreign branches.

The policy Master is therefore more complete from the point of view of guarantees and has broader limits of liability within the programs, since it will be operational even if the local policies do not contain a specific guarantee or do not have a insufficient indemnity limit. This takes place by using the insurance technique of the Difference of Conditions “D.I.C.” and the Difference in Limits “D.I.L.” coverage.

FREEDOM OF SERVICE / F.O.S. PROGRAM

If a company has branches in the European Union, such entities can be guaranteed directly from Italy.

This is a simple program (no need to issue local policies), useful where the business exercised by the branch is not particularly complex.

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NON-ADMITTED PROGRAM

In some cases coverages of the Parent Company can also be extended to its own global branches, therefore outside European borders, without the need for local policies (for example in the case of Civil Liability Administrators – D&O policies).

In the event of a claim, in order not to breach the applicable laws of the individual Countries, the indemnity will be paid to the Parent Company, in virtue of the financial interest held in its own branches.

Reliable and competent professionals at your service

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Ing. Tommaso Bazzi