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• A Global Program is an insurance structure involving a master policy in one country with one or more local policies issued in another country(ies) – e.g. master policy in Germany, with local policies in Brazil, France, Japan, USA, …
A Global Program with a master policy and coordinated local policies including DIC/DIL master cover
Individual and independent local policies in each of the countries
Master Policy providing Difference in Condition (DIC) and Difference in Limits (DIL) cover either on a licensed,
Permissible Unlicensed (PUC) or Financial Interest (FI) basis
What are the benefits of a Global Program over standalone policies?
• Consistency of worldwide coveragethrough one master policy providing DIC/DIL cover around local policies
• Cost savings through purchasing power, no overlaps of coverage
• Centralized purchasing decisionClient’s centralized Risk Management department - instead of individual local entities - makes insurance purchasing decisions
• EfficientInsured working with one global carrier, not 20+ local carriers
What are the benefits of a Global Program over standalone policies? (con't)
• Gain timeClient‘s Risk Management department time freed up to concentrate on business and loss prevention
• Centralize risk control effectively mitigate exposures and operational risks of multinational corporations
• Ease of access to informationA Global Program drives the availability of information (e.g. loss reports) on a worldwide basis for effective risk quantification
• Facilitate reinsurance to captives / 3rd party reinsurers
• Less administrative workcarrier handles administration, not the insured
• Master policyproviding Difference in Conditions (DIC) / Difference in Limits (DIL) cover either on a licensed, Permissible Unlicensed Cover (PUC) or Financial Interest (FI) basis to provide seamless and comprehensive global cover.
• “Program clause” explains the relationship between master and local policies and may seek to impose a program aggregate limit and / or simultaneous termination of local policies upon termination of the master policy
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Master Policy providing Difference in Condition (DIC) and Difference in Limits (DIL) cover either on a licensed,
Permissible Unlicensed (PUC) or Financial Interest (FI) basis
Coinsurer or reinsurer participates on a quota share basis on master policy plus some or all local policies
•Master policy is issued by XL carrier, e.g. XL Insurance Company SE (XLICSE) in Germany.
•Co-insurers write lines on the master policy as a following market to XL.
•Local policies will be written 100% by either XL carriers, e.g. XL Seguros Brasil S.A or a Fronting Partner (FP) company.
•Co-insurers on the master policy reinsure the local XL entity on local policies.
•FPs are reinsured by XLICSE (the reinsurer for all FP policies) for 100% or the maximum permissible percentage where compulsory local retentions apply.
• “Owns” insurer’s business relationship with client and provides risk assessment for Global Program as a whole, providing underwriting expertise as necessary to “incoming” (local policy) underwriters, and recommending pricing. Risk assessment performed with inputs from risk engineers and network incoming underwriters (owned entities as well as Fronting Partners)
• Shares/cedes capacities to other carriers as per broker/client request
Master broker
• Submission to Insurer in the name of master client for worldwide solution, submission includes risk information such as insurable values etc. on a worldwide basis
• Defines lead insurer for Global Program plus possibly places some capacities on a reinsurance or coinsurance basis with other (re)insurers
Master client
• Provides risk relevant information to broker (and possibly directly to insurer), instructs broker to get offers based on risk management concept and needs
• Accepts offer for program setup, signs master policy
• Defines lead insurer plus possible other carriers on the Global Program
• XL Group plc, through its subsidiaries, is a global insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world.
• Our insurance segment offers property, casualty, professional and specialty insurance products globally. Businesses that are moving the world forward choose us as their partner. To learn more, visit xlgroup.com/insurance
• Our reinsurance segment is one of the leading reinsurers in the world. It offers products that include aerospace, property, casualty, marine and specialty. The world’s top insurers choose us to help move their businesses forward. To learn more, visit xlgroup.com/reinsurance
• We are the organization clients look to for answers to their most complex risks and to help move their world forward. To learn more, visit xlgroup.com
• The global program products and structures used by XL Insurance carriers are designed to address and minimise licensing and tax compliance risk for their insured clients. However XL cannot guarantee that programs conclusively eliminate all risks, or that no further risks exist or will arise in future. Rules and regulations are stated as XL believes them currently to be to the best of its knowledge. However, actual and prospective insureds and intermediaries are advised to take their own independent professional advice.