• In the absence of strategic direction from headquarters, benefit designs may or may not be consistent with the overall global benefits strategy.
• Depending on the level of local negotiating power (and the role of intermediaries), total premiums paid in local markets may not be as competitive as they could be.
• Savings from multinational pooling may be suboptimal due to a lack of proactive management and coordination of the pooling strategy.
• There is little potential for leverage on broker and consulting fees globally.
• There may be situations in which duplicate or overlapping benefits exist.
• It is difficult to apply consistent governance practices and processes.
• Basic information on the risk benefit programs around the world (such as plan designs, insurers and premiums) may not flow up to headquarters effectively.

Here is the solution.

Multipool is a multi-employer pooling arrangement protected by a stop loss system, in which losses in the overall multinational account in any year are automatically cancelled by the network of the insurer. A risk charge is applied. Due to the large number of companies participating in small groups pool this charge is relatively low. On the other hand, within a pool, deficit results from “other” companies are first offset before arriving at an overall surplus result.

Insurope: Average dividends payable from Multipool, since its launch in 1984, run at a 44% average payout of own positive results, over the lifetime of this pooling product. Over good years this can represent as much as a 17% reduction in risk premiums.

This is a healthy reduction in costs and increasing profits for any multinational group, however big or small. Since its inception Multipool has paid dividends in all years except 1984 and 1993. (Source Insurope)