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Introduction to Multinational PoolingSylvia M. Alvariño
Director of the Americas
Multinational Benefit Associates, Inc.
dba Insurope
September 14, 2017
The Prudential Insurance Company of America (Prudential)
0308968-00001-001
Introduction to Multinational Pooling
►The Insurope Network
►The advantages of Insurope pooling solutions
►Market trends and developments
2
The Insurope Network
About Insurope
4
Key Figures for Insurope
5
Sources: 2016 Insurope’s Client Database and the 2017 Pooling Networks’ Survey
High Client Satisfaction and Loyalty
6
97% 93% 80%
Likelihood of continuing the
pooling agreement with Insurope
Multinational clients who would recommend
Insurope
Satisfaction with Insurope
From Insurope’s satisfaction and market surveys 2015 and 2016
The Advantages of Insurope Pooling Solutions
Multinational Pooling – Our Structure
8
MultinationalProgram
Network Member
Network Member Local
contract
Local contract
Advantages of Multinational Pooling with Insurope
9
Better terms and conditions (i.e. High Free Cover Limit), which makes it easier to insure employees with high benefits
Reporting, information and pool analysis tools
Account Management support and coordination
Strong local Network Members
Reduced costs through international dividends, which can be paid locally
Possible to set up local one-country pool
10
Market Segmentation and Solutions
Large Multinationals
> 1,500 lives
• Single Employer pool
• Flexible solutions
• Variety of risk solutions
• Risk result depending onown results and experience
• Possible to set up a local“One Country” pool
Small Multinationals
< 1,500 lives
• Multi-employer pool
• Standardized risk solution
• Unique payout method
• Average pay-out of 18.5%last 5 years
• Possible to set up a local“One Country” pool
Products and Services
11
RISK SPECTRUM
To w a r d s m o r e p r o t e c t i o n
LCF RO 5 RO 3 RO 2 2ySL SL
Carry forward Stop loss
A more “self-insured” approach A more “insured” approach
Loss Free
Highest risk charge
= full protection
Zero risk charge
= no protection
Potential for Dividends
12
• On average 60% of the Insurope pools produce positive results
• On average 65-70% of local country plans produce a positive
result
• Insurope dividends are on average 10% of risk premiums
• High pay-out ratio in the Insurope Multipool
Source: 2016 Insurope’s Client Database
Administration, Information and Risk Management
13
Information & pool analysis tool
Pooling illustration
Multinational report
Online access to CRM system
Market Trends and Development
15
Multinational Companies –Challenges and Observations
• Global expansion
• Local practice and product offerings
• More focus on governance and control
• Global management information and tracking
• Managing global benefit plans
• Retaining employees
• Harmonization of benefits and adapting to local market practices
• Increased disability and medical claims
• Increased health cost
• Change in demographics
• High cost of DB plans
• Solvency II
• Cost control
• Administrative challenges and solutions
• Financial risk and growing cost
Challenges
• Increased governance, control andcoordination
• Global approach (central/regional)
• Global consultants and global RFPs
• Multinational pooling is part of theglobal strategy for multinationals
• Increased focus on non-financial benefits
• Risk monitoring systems and access to claims information
• Financial benefits of pooling
Observations
The Advantages of Using a Pooling Network –Client Satisfaction Survey Responses
16
93%
69%
60% 59%55%
45%
24%
93%
53%
60%
47%43%
50%
27%
Price/dividend Better terms andconditions
Reporting Bettercoordination with
local insuranceprovider
Access toinformation
Governance Improvedcustomer service
2016 2015
From Insurope’s satisfaction and market surveys 2015 and 2016
Managing Employee Benefit Programs
17
Centralized vs decentralized
Use of a global broker
Decision makers in placing local business
Centralized
Decentralized
Don't know
Central decision
Local decision
Combination
55%
35%
10%
Not important
Somewhatimportant
Important84%
10%
6%
No Yes62%
38%
From Insurope’s satisfaction and market surveys 2015 and 2016
62%
35%
3%
The importance of pooling in placing local business
The Advantages of Using a Pooling Network –Client Satisfaction Survey Responses
18
52%
28%
14%
3%0%
57%
23%
13%
3% 2%
Strength of localNetwork Members
Network terms &conditions
Geographic coverage Reputation Don't know
2016 2015
From Insurope’s satisfaction and market surveys 2015 and 2016
Conclusions
►Insurope is a network of strong local partners in 80 + countries
►Multinational Pooling is actively used by many multinational companies, and it is
growing in importance
►Insurope offers valuable benefits such as potential for cost savings, account
management teams, worldwide reporting and access to information
19
DISCLAIMER
The Insurope Network (“Network”) is a network of locally licensed member insurance companies (“Members”) who jointly own Insurope SCRL/CVBA(“Insurope”), a cooperative company with limited liability, duly incorporated and existing under the laws of Belgium, with a registered office at Avenue desArts 9, 1210 Saint-Josse-Ten-Noode, Belgium. Insurope is represented in the U.S. by Multinational Benefit Associates, Inc., a New York licensed insurancebroker, with an office at 420 Lexington Avenue, Floor 28, New York, New York. Insurope promotes the Network but does not issue policies or provideinsurance; such activities are carried out by the Network Members. The non-U.S. Members are not licensed or authorized to do business in New York and thepolicies and contracts they issue have not been approved by the New York Superintendent of Financial Services, are not protected by the New York stateguaranty fund, and are not subject to all of the laws of New York.
21
Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ.
©2017 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo, the Rock symbol, and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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