A significant number of Israeli companies operate overseas via wholly owned subsidiaries or jointly owned with local partners. In many cases there is a high level of integration between group companies, cooperating in various areas such as distribution channels, logistics and accounting in order to benefit from economies of scale and the extensive international network of local branches.
The insurance program for the entire group can be centralised and various products are available in the market providing individually tailored solutions for multinational companies.
The primary needs which an international program addresses and its inherent advantages for corporate management are as follows:
1. The owners and shareholders of the company can ensure that their overseas assets and investments are adequately protected in the event of an unforeseen event.
2. The group management is able to establish a uniform risk management policy for all worldwide companies under its control and instruct them which insurance covers need to be purchased, the requisite scope of cover and terms and conditions.
3. Unique covers providing solutions for specific business activities undertaken by group companies in different countries.
4. Control of the group insurance budget and hence savings in insurance premiums.
Multinational insurance programs
Such a program offers the opportunity to centralise the insurance for all assets and activities in each country, even if the company is involved in a diverse range of activities.
The program is comprised of the following components:
Local policy – A policy issued by a local insurer for each group company addressing the specific insurance needs for the property and activity in the respective country. This policy provides insurance in compliance with local regulatory or statutory demands. This policy also provides a mechanism for supplying insurance certificates required by local suppliers, customers, banks and of course to pay for various insurable losses.
Master policy – An umbrella policy issued for the group management. This policy provides very broad cover for all group assets and activities on a worldwide basis and is aimed at addressing insurance needs which are either not covered or are insufficiently covered under the local policy. This policy, usually issued by an insurer in the country in which the company headquarters is located, provides group management with peace of mind with the knowledge that all of its global activities are comprehensively insured under a master policy.
The program is usually arranged with an international insurance company with worldwide branches that can provide local service to each group company and at the same time administer the program in a centralised manner in liaison with the group management.
Leading insurers of this type who have subsidiaries in Israel are Generali, which operates in Israel via Migdal, AIG which operates in Israel via AIG Israel. Furthermore, Clal and Harel insurance companies have strategic cooperative agreements with other international insurance groups such as AXA, Zurich, Allianz.
In order to establish an insurance program, collate and process data and provide day-to-day service in administering the scheme, a brokerage with international representation will be the local point of contact wherever the client is located.
Ramot is a member of the EOS alliance of insurance brokers and risk consultants, enabling us to provide customer service on a worldwide basis. Ramot and EOS administer a wide range of global insurance programs for numerous companies which benefit from the numerous advantages of an international program.