Kenneth Heijmans Director Europe Insurope

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Kenneth HeijmansDirector EuropeInsurope
Effective Financing of Employee Benefits via
Multinational Pooling

• A leading network in the global risk management
  of employee benefits

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Questions to be answered

• Who is Insurope ?
• What do we provide ?
• Where is the benefit ?

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Insuropes profile

• Network of independent insurance companies
• Founded in the late 1960s
• Origins in Europe
• Global growth
• Strong local partners

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Insuropes organization

• Headquarters in Brussels
• Regional offices in
• USA
• Latin America
• Asia Pacific
• Scandinavia
• GB Ireland
• Netherlands

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Some statistics

• Represented in 80 countries
• Over 460 multinational clients
• Network Number 2
• Pooled premium gt 500 million

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Being different by offering

• Flexible solutions
• Free cover limits
• Service
• Worldwide presence

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Basic principle of pooling
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Locally paid premiums
F
RU
UK
Multinational dividend
Claims, commissions, taxes local dividend
Administration charge Risk Charge
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Multinational pooling account

• Profit and loss account
• Income
• reserves, premiums, interest, non-rated claims
• Outgo
• reserves, claims, non-rated premiums,
  commissions, local tax, administration charge,
  risk charge, local dividend, surplus/(loss)

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What can be pooled ?

• In all countries Life Disability (long
  short term)
• In most countries Medical Accidental Death
  Dismemberment (if rider to life)
• In some countries Retirement

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The Multinational agreement
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Network partners

• Average membership 20 years
• Specialists in their home market
• Respected insurers locally (top 3)
• Dedicated Insurope units
• Specialized departments e.g. actuarial legal
  services

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Pooling systems

• General minimum of 2 countries with
  poolable benefits
• Multipool
• Own pool
• Loss Carry Forward
• Stop Loss

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Multipool

• Max. 1000 lives AND 300.000 Death Disability
  premium
• Yearly pay out
• Results shared over positive individual contracts
  (!)

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Own company pool -1-

• Limited Carry Forward
• A loss will be carry forward for a limited
  number of years (3 or 5)
• Minimum 1.000 lives
• Yearly pay out

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Own company pool -2-

• Loss Carry Forward
• Loss cancellation levels
• Pay out frequency linked to number of units/lives

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Own company pool -3-

• Stop Loss
• 100 on a yearly basis
• Minimum 500 lives
• Yearly pay out

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Tailor- made solutions

• Two year Stop Loss
• Change of Rating Limits
• Loss Carry Forward
• Multiple of Death Disability premium
• Fixed amount
• Other ?
• Something in between

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Multipool a closer look

• Easy start for large companies
• Perfect solution for smaller companies
• Some facts
• Average result last 5 years 35
• Result over 2005 40
• Free Cover Limits
• Pay out per positive pooled plan

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Return for B would be zero in SGP of other
networks
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Protection features

• Loss cancellation levels
• Rating limits / individual stop loss
• Protection against long term deficit

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Loss cancellation level LCF

• Aggregate stop loss level
• Units Multiple of rated Death
• Disability premium
• 200-499 4
• 500-999 3
• 1,000 2
• or tailor made

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Advantages

• Insurope specific (Unique Selling Points)
• Cancellation of an aggregate loss, so not per
  year (!)
• Total loss cannot exceed loss cancellation level

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Individual Rating Limits

• Protecting pool
• Eliminating individual peak risks
• Related premium excluded from pool(non-rated
  premiums)

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Rating limits 2007

• Own company pool (LCF or Stop Loss)

• Multipool

the goal is to eliminate peak risks
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Retention by Insurope

• Administration charge
• For network partner
• Risk charge
• Reinsurance premium
• Transparent
• Shown separately
• No additional charge in local premium
• No change of local conditions

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Administration charge

• Charged per contract
• Linked to pooled premium
• Network scale instead of local !

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Free cover limits

• Acceptance without medical evidence !
• Specific to Insurope
• Network members adjust for better the local
  arrangements to participate fully
• Important HR feature in specific countries

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Free Cover Limits 2007

• Own company pool (LCF or Stop Loss)

• Multipool

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Service and Reporting

• Service agreements
• Access to CRM
• Reporting

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Service agreements

• At HQs-level (between HQs and Insurope)
• On local conditions claim handling per customary
  practice

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Sales Logix access (CRM)

• Web-enabled tool
• Access to emails, documents etc.
• Tracking of local sales processes
• Tool to actively develop the pool
• No additional costs

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Reporting

• Annual reports
• Own pool within 3 to 6 monthsor specific
  service agreement
• Multipool second half of the year
• Reports based upon client specific needs

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Annual reports

• Overview of past performance
• Overview of plans included
• Multinational Pooling account
• Including insured but non-pooled schemes

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Effective financing ?

• Indeed ! by providing
• Cost saving
• Additional profit sharing
• Financial reporting (claims)
• Service
• Access to local plan details
• Access to (local) knowledge
• Better underwriting conditions
• Strong independent partners
• Free Cover Limits

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Importance for the advisor

• Global approach with local focus
• Strengthen own position
• Addition of cost saving feature
• Part of professional advisory

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Benefit for local subsidiary

• Cost reduction by multinational dividend
• Free Cover Limits
• Stronger local position
• Leverage world wide presence

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Insurope works with youfor the
futurewww.insurope.comru.insurope.com
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