In a globalised business world, many companies are setting their sights wider – which could spell new opportunities for brokers and insurers.
Despite a dip in confidence as a result of ongoing uncertainty over Brexit and the government’s minority position following the general election, UK multinational business leaders are continuing to eye growth internationally, a
CNA Hardy report revealed last week.
The insurer’s Autumn Risk and Confidence survey found that 63% of business leaders identify Europe as the market with the strongest growth potential in autumn this year, and interest in Asia almost doubles looking ahead to spring next year.
With growth clearly in the forefront of businesses’ minds, multinational insurance policies are becoming increasingly popular, according to
AIG’s head of complex multinational accounts for Europe.
“Historically, multinational programmes have typically been purchased by Fortune 100 companies and household names. However, as companies seek to move overseas, we are seeing more and more interest from the middle market,” Stephen Morton said at the Brokerslink annual conference last month.
“AIG’s multinational business has grown year on year – we saw a 5% growth in the number of clients over the last 12 months, and we now write more local policies than we’ve ever written that are part of global programs,” Morton commented.
“We also consistently see a higher retention rate with our multinational programs when compared to domestic business – so it’s good business for us,” he added.
Market research conducted by AIG looked at what drives companies to make the shift from local placement into a global programme. It found that there is often a “tipping point or a trigger” for companies which causes their thinking to move from a local to a global approach.
“What happens is, businesses reach a point where they start to consider what a global programme could do for them in the context of their own business,” Morton said. “They might not want to a global broker immediately, but they want to know the options.”
He added: “In today’s cost-driven environment, multinational programmes do present opportunities for economies of scale, and that realisation is one of those triggers.”
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