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AIG MULTINATIONAL PROGRAM DESIGN TOOL
A fundamental question confronting risk managers operating in a multinational environment is: When is a local policy the right way to go?
Traditionally, the decision to use a locally admitted insurance policy has been driven solely by regulatory issues. But “while regulations are important, they are not the only consideration,” said Mark DeMartine, AIG's president of global markets who spearheaded the development of the AIG Multinational Program Design Tool.
The AIG Multinational Program Design Tool has been recognized with a 2014 Business Insurance Innovation Award.
Mr. DeMartine described the tool as “an interactive Web-based tool that addresses customers' fundamental question when designing a multinational program: "Where do I need a local policy?'”
There was little in the marketplace to meet those needs, he said, so AIG multinational operation came out with a briefing paper on the issue about a year ago. That led to the development of the interactive tool. After about a year of development, the tool was launched in Europe at the Federation of European Risk Management Associations conference last October, Mr. DeMartine said.
The tool has users answer a series of questions to systematically assess complex issues that arise when risk managers consider whether to decide to insure locally. “It combines considerations on compliance, exposures, tax and capital, claims, coverage, and proof of insurance with the user's understanding of their organization in the country,” said Mr. DeMartine. “It takes the mystique out of this multinational world, and that's what's unique about it.”
The program covers more than 200 countries, he said. When launched, the tool dealt with four product lines: property, general liability, directors and officers liability and marine liability. AIG has since added accident and health, and plans to expand the tool to deal with environmental and trade credit coverage.
Mr. DeMartine said the tool is currently available in English, Chinese and Japanese and will soon be available in Spanish.
“If it makes sense and we need another language, we'll do it,” he said.
Once the assessment is complete, users receive a customized, downloadable summary report. The AIG Multinational Program Design Tool is available for free to everybody at www.aig.com/ multinational/pdt.
“(The tool) empowers risk managers with a framework of thought and a structured way to aggregate this information,” Mr. DeMartine said.
All of the entries for the 2014 Business Insurance Innovation Awards were reviewed by an independent panel of judges, all of whom are risk management professionals.