These problems can partly be solved with pooling of certain risk and employee benefits. Every company has to act swiftly to decrease their annual spending.

Planning your human resources is more than ever the way to move ahead with the right people on the right positions. No salary increase will not create highly motivated employee. A disengaged workforce will not contribute effective to the business (and profits).

To manage the costs of personnel, you can try to start with flexible Employee Benefits. The aim is also to improve effective management.

Companies struggling to survive will aim to improve the cost basis from a tax and benefit perspective.

You can take a local approach or a global approach. The global option will reduce the local cost. The revenues can be astonishing.  Cost reductions up to 40% can even be realised by small groups pooling (Multi-pooling). These advantages can be created even by groups less than 100 employees.

Please call or email us if you need further information.

Multinational pooling brings the risks from a network of local insurance providers together to achieve savings and underwriting benefits based on the risk as a whole. But each network has a single specified local insurer in each individual country.

This means that whilst one network may provide the best possible coverage in some of your territories, a different network might better serve other areas. We will help you to compare benefits and premiums across all of the available networks to establish:

Loss carry forward
For large multinational organisations, a loss carry forward basis may be the most attractive as the surpluses in claim-free years can be as high as 85% of premiums paid. Any losses, however, are carried forward to the next reporting period to be deducted from any potential surplus, making this a higher-risk, higher-reward option than other types of pool. As such, this type of pool may not necessarily be suited to multinational organisations who are risk-averse.
The loss carry forward basis may therefore suit very large multinational organisations employing several thousand individuals, who would expect to have a reasonably stable claims rate, as it offers them a solution close to self insurance whilst protecting them against high value claims.

Stop loss pools
Stop loss pools offer the protection of any losses being absorbed by the network partners at the end of each reporting period. Consequently, they offer greatest benefit to multinational organisations that are more likely to experience greater volatility in claims or are more risk averse.
In claim-free years the typical dividend could be around 70% of premiums paid, reflecting the higher risk charges levied by the network partners for this increased level of protection.

Multiple employer pools
The multiple employer pool is suitable for multinational organisations with a smaller number of employees, for which greater volatility in claims is likely.
Typical dividends in a claim-free year can be 25% of premiums paid. Any surplus or loss depends upon the aggregate result for all the multinational organisations participating in the pool, and it offers the protection of operating on a stop loss basis – losses being absorbed by the network partner at the end of the reporting period.

The pension pooling vehicle then invests in assets, such as global equities, bonds and cash, on behalf of the investing pension funds.
One of the main advantages of pooling is that instead of having a number of pension funds in various locations having different investment managers, administrators and custodians, a more streamlined approach is adopted so that the assets are managed  centrally in the pooling vehicle.

As a result, pooling offers considerable economies of scale, particularly for smaller pension funds, and this in turn leads to cost savings and enhanced returns. It also provides greater consistency in asset management and enhances control over investment risks.

In  some cases, the pooled fund can employ the services of asset managers who would not otherwise accept their business.

Additional key employer advantages may include:

■ Consolidation of global risk. Risk Managers are increasingly taking a
holistic view in consolidating employers’ global risks. By uniting all global
benefits through captive reinsurance, multinational pooling—or both—
global risk volatility may be smoothed and better budgeted.
■ Customized programs. Captive ownership may help employers tailor
their insurance programs to reflect their specific business needs and
changing circumstances.
■ Management of surplus. To the extent insured risks contain high margins relative to the employer’s population, captive financing may help employers control those surpluses. By combining all insurance benefit plan assets, the employer retains the investment income.
■ Tax advantages. A captive qualifies to take full advantage of tax  deductions if it has sufficient risk transferring and sufficient unrelated risk. Employee benefits qualify as “unrelated business,” thereby creating a possible tax advantage for the employer.

An explanation….

Captive—an insurance company that is a wholly owned and operated subsidiary of a parent corporation whose primary business is not insurance.

Captive reinsurance—coverage provided by a licensed insurance company that is reinsured to a captive insurance company.

Multinational pooling—a cross application of experience and expenses for consolidated accounting across different insurance carriers for employees of the same firm in different countries.

• Risk spreading
• International dividends
• Risk retention
• Pooled coverages
• Simplified profit and loss accounting
• Modular solution (choice of amount of risk retained, losses carried forward,etc.)
• Simplified participation
• Coordinated benefits for local subsidiaries
• Select insurance companies as partners

What are you waiting for? Just call us now. +31206200825. Ask for Gerrit-Jan Doorneweerd, Henk-JanLeppink or René Graafsma.

Around the world there exist various methods of financing employee benefits. Many multinational companies choose insurance as a method of financing employee benefit plans. A multinational pooling account is essentially a second stage accounting of insured employee benefit plans at the international level. Such a process introduces the application of administration and risk charge retentions which are based on an accurate assessment of costs incurred in insuring a given group of employee benefit risks internationally. This approach means that ingoing premium levels, even if set by tariff, do not necessarily represent the cost of a given plan. In many cases the real or net cost will be much less, depending on the level of insured claims experience.

A multinational pool brings together insured benefit plans (retirement, death, disability, medical, accident) which have been set up locally for two or more countries. Premiums are paid by subsidiaries on a purely local basis, and claims settled by local insurers on a purely local basis. At the end of each experience year the local insurers involved in a given multinational pooling account will submit the results of the local plans to showing amounts held, received and paid in respect of those plans.

A multinational account is then drawn up showing premiums paid minus claims, minus the insurer’s risk retention and administration charge. This account also takes into consideration other items such as reserves, interest, non-rated premiums, local taxes, local dividends and commissions.

If the experience of the insured group is favourable, then there will be a surplus in the multinational account, payable to the client as a multinational dividend. Estimates by advisors on multinational pooling suggest that over a period of years an 8% to 15% reduction of local premium costs can be achieved. In years of good experience, dividend percentages can be substantial, even reaching 80% to 90% of risk premiums paid. (bron Insurope)