To find local national insurance you must be working with a partner that has a license to conduct insurance business in the local country where you are looking for local national insurance (or multinational pooling for local nationals.)  In cases were we don’t have the licnese we have a direct partner that does.  Many brokers and consultants in the U.S. say they are able to provide advice on local national insurance in the countries where you do business.  In reality, if they do not have the local license they are NOT able to source insurance quotes, analyze insurance quotes, or deliver opinions on the insurance for the local country where local national insurance is needed.  Multinational pooling is a way of combining admitted local national insurance products so, in essence, they all “work together” for the global employer.  In addition to making things easier, it can also offer significant cost savings.

A multinational pooling arrangement is able to “financially tie together” into one large experience rated agreement, fully insured insurance products covering local nationals in different countries and with different insurers.  We hope you will contact McKinley International Risk Management www.mckinleyinternational.com for more information.

A multinational pooling study and corresponding recommendation can often take over six months to coordinate.  The ability to manage a multinational pooling study from the United States, all with a single contact at McKinley International, and now without consulting fees for some countries is a triple benefit for clients.

In countries where McKinley International does not have access to a local license to place local national insurance, clients may still be charged a constulting fee, but all fees will be disclosed and will represent payment in full with a promise to avoid hourly billing for projects that take longer than the expected time frame.

Insurance for local nationals should be taken very seriously.  You must use a locally admitted insurance company or locally licensed insurance company.  This means, if you want to insure Brazilians in Brazil, you need to use a Brazilian insurance company.  You cannot use a U.S. plan even if it’s an international insurance plan like CIGNA International in most instances.  Getting this wrong can be CRIMINAL in many countries.

Multinational Pooling is an “easy” and cost effective way for a company to insure their local nationals and accomplishes two main objectives:

1. It lessens the work load.  In the old days if you had local nationals in 5 countries you had to “figure out” the insurance in those countries yourself or forced to use some local broker you did not know or trust.  Now you can work through a multinational pooling company that will have insurance company partners in each country where you have and employ local nationals.  They can coordinate a global program for you.
2. For cost savings.  Economies of scale mean you can get better pricing by working through a multinational pooling company and all the individual countries can be added up to form one large / collective experience rated group.  This means the home office can receive a dividend check (for surplus) if, collectively the countries have favorable claim experience even if a few countries do poorly.

Does your company employ 100 or more local nationals (in total) in 3 or more countries and each country is “doing their own thing.”  Perhaps you have no real control and are not sure what exactly is going on.  Using McKinley International Risk Management we can reach out to a multinational pooling company to see if your situation can be improved and results can be a nice and dramatic change for the better.

McKinley International Risk Management provides expatriate employee benefits, property and casualty insurance (like international workers compensation insurance) and local national insurance through multinational pooling.

Employer that wish to extend insurance to Chinese citizens must first understand the need to do it properly, but the good news is in 2010 there are many more options than what existed just 5 years ago.  The process can be managed and controlled from the U.S. or the home office, and the need for everything to happen in a back room locally in China with brokers and players you don’t know or understand, is no longer the case.

Almost all the major multinational pooling companies have network partners that can insure and provide local national insurance in China.  Even the companies that are traditionally known for expatriate benefits are finding ways to provide local national benefits in China on a compliant and admitted basis.  Please contact McKinley International Risk Management for more on multinational pooling and admitted insurance in China.

McKinley International sites the many advantages of using a multinational pooling insurance network if you are a global employer with local nationals spread across many countries but what about an employer just with British local nationals and a U.K. based operation?

Using insurance companies based in the United Kingdom that are both compliant and admitted, U.S. employers can on their own time zone, manage insurance placement for U.K. local nationals from the United States without using a multinational pooling network.  Groups start at just 5 British local nationals.

A U.S. multinational may need to extend all of the following insurance benefits to local nationals in London, and throughout the U.K.

1. Supplemental medical insurance in the U.K. to supplement NHS (government) medical benefits.
2. Dental insurance for British nationals.
3. Life and AD&D insurance
4. Disability Insurance (LTD, TTD, or PTD)
5. Pension contribution
6. Global travel and expatriate insurance for British nationals that leave the United Kingdom.

Please contact McKinley International Risk Management for assistance placing insurance for British local nationals without using a multinational pooling network.

We hope you will speak to us about the latter which we will do without consulting fees, but as for the advantages, we have put together a comprehensive list below:

A multinational pooling program where a local insurance company in the pool is used to cover local nationals keeps the employer in compliance.  In many countries it is simply illegal to use a non-admitted insurer to cover local nationals.

Ease of implementation.  Do you have local nationals in 10 countries?  Using a multinational pooling network vs. “doing it ourselves” can save about a year of time and effort.  This is very simplistic but a major advantage.

The local pooling network insurer satisfies the local tax and legal regulations and maintains the plan design and premium payments seamlessly.  Local law changes on plan design are immediately reflected by the local insurer in the multinational pool.

A pooling arrangement facilitates vastly improved reporting so, at a glance the home office can see what is going on in each country.

By bundling insurance risk through multinational pooling, total insurance expense can be reduced and additional savings are possible through international dividends if their claims experience is positive.  After the final accounting, a dividend (refund) check can be returned to the parent company.

Multinational pooling enables the multinational employer to get closer to experience rating on a global basis, while still ensuring appropriate risk protection.  This is especially true if the group size in some countries is small.

The underwriting terms locally may be more favorable because a company participates in a multinational pool.  For example, guaranteed issue limits for life insurance amounts without medical evidence may be increased just for being in the multinational pool.

There is a degree of leverage the multinational pooling network has over the local insurance companies that the company would not be able to achieve on their own (unless perhaps you are GE or Boeing or a company with 50,000 or more local nationals!)

Global financial accounting provides a simpler perspective of insurance policies across borders and within countries. This improves the flow of information and transparency in the details including premiums paid, commissions and claims paid, allowing for more control. A better understanding facilitates improved risk management.

In summary, multinational pooling makes things much easier, ensures legal compliance, and saves money.  There are very few down sides.

In addition to multinational pooling, Met also gets access to the AIG developing expatriate medical insurance business based in Delaware.

MetLife was seeking to expand and grow internationally and ALICOs strong position in foreign markets helps achieve this goal for Met. MetLife exited the financial crisis in a position of strength relative to some distressed peers. The firm has been able to capitalize on this strength by purchasing a subsidiary of a distressed competitor, AIG. The number of corporations that were in a position to accomplish such a large acquisition as ALICO were limited, which we believe may have restricted the price.  None of the other multinational pooling companies were reported as interested.

After the Alico acquisition, the combined company will have very large share in several growing markets, and it will be the largest life insurer in Russia, Mexico, and the United States as well as the second-largest foreign life insurer in Japan. MetLife will also have a significant presence in the developing economies of India and China. In the fourth quarter, MetLife derived about 13% of its premiums, fees, and other revenue internationally, but we expect this total will grow materially following the ALICO acquisition.

We will be contacting MetLife representatives shortly for more information on how this affects multinational pooling operations but we expect no changes whatsoever for now and business as usual.

Through this partnership we are able to find insurance solutions for North American based multinationals that need to find insurance for U.K. local nationals (insurance for foreign nationals in the United Kingdom.)  In the past, large companies could use multinational pooling companies to do this, but smaller companies were forced to use an “international broker network” to find a local broker in the United Kingdom that they neither knew well, or trusted.  If they wanted to insure their local nationals in London there were few if any choices. 

Of course, another option is to approach the large ABC consulting houses that will use their local office to insure local nationals in the United Kingdom but do you want to spend $15,000 on consuting fees to insure 20 or fewer British nationals?  Why are consulting fees for local national employees so high, it’s likely the local operation in the U.K. would charge for the service, and the U.S. consultant would also take a cut even if they both worked for the same consulting company!

On a legal and compliant basis, International Insurance & Investments LLC can source insurance for British local nationals working directly for the North American based multinational.  Best of all, this can be done at no consulting fees to the client.  Please contact us for more information.

What is a natural pool?  A natural pool exists where the multinational pooling network being looked at has superior insurance company partners in all the countries, or at least, the most important countries where local nationals need to be insured.  If a company looking at Multinational Pooling has 80% of their local nationals in three countries, the multinational pooling network with strong partners in those three countries have the strongest chance of success.

If a large multinational employer has employees in 25 countries, there may only be 1 or 2 pooling companies that have strong partners in ALL countries, or only 1 may have a natural pool.  A multinational pooling network with network partners in only 15 of 25 countries needed by the client is far from having a natural pool.

When the country list for pooling needs is long, or the countries more difficult (Vietnam vs. the United Kingdom for example), this ability to create a natural pool may become far more important than any other aspect or criteria when it comes to selecting the multinational pooling network that will be asked to provide the admitted insurance for local nationals.  For example, services, administration, features, and even price take a back seat.

When looking at multinational pooling networks, look for the natural pool first like looking for the corner pieces of a jigsaw puzzle.

For more about what multinational pooling is, please see the post under Multinational Pooling General and Misc.  Each pooling company will have wholly owned or partnership companies in each country where you employ local nationals that are admitted insurers in those countries.

Using non-admitted solutions for local nationals in many countries is a crime.  With multinational pooling networks, you are assured the network partner company in each country is admitted.  In addition to avoiding criminal penalty, using admitted companies have other advantages such as the ability to take a tax deduction on premium paid for example.

Companies that have a smaller number of local nationals that do not participate in a multinational pooling arrangement may even be tempted to place local nationals under an offshore expatriate insurance program.  Avoid this if at all possible.  Many of the pooling companies today have smaller employee per country needs than existed 5 years ago.

If you have a small number of local nationals in several countries, please contact McKinley International Risk Management to see if there is a pooling network that would meet your needs.