An insurance broker’s primary role is to act on behalf of their client’s
to seek out the best available terms and premium for their insurance
requirements. Paramount for an insurance broker to be able to best
serve their client’s is having access to a wide range of insurance products and services from a wide range of insurance companies from here and overseas.
Indeed, while the Australian & New Zealand insurance industries are relatively sophisticated in respect of retail consumer insurance products, each lacks the scale and sophisticated product range to cater for the needs of a growing number businesses and enterprises requiring alternative solutions to keep them ahead of their competition.
Of the 100+ insurance companies registered in New Zealand and Australia, only a handful could reasonably be considered ‘international insurers’ however; their local offices generally do not provide the range of products and services otherwise available from some of their larger offices such as in London, Switzerland or Bermuda; [Bermuda being the largest insurance market in the world]
It’s not uncommon therefore, for someNew Zealand and Australian clients to have to settle for mishmash of individual insurance polices bolted together to cover one particular risk; this of course can lead to gaps in the protection, and contradictory clauses affecting the cover, not to mention the unnecessary expense and administration involved.
Some of the reasons why we arrange clients insurance with overseas insurers:-
- more diversity of underwriters, pricing & products available from the worldwide insurance market;
- the increasing development & sophistication of overseas insurance markets and their products;
- better management of insurance coverage for Australian and New Zealand clients doing business overseas;
- insurance cover not available from local insurers; or if the cover is too expensive and/or uneconomical.
It’s a Global Village out there –
The Global Insurance industry is immense – access to it gives you the cutting edge advantage
The United States of America is the world’s largest insurance market employing about 2.36 million people, with gross insurance premiums totaling USD$1.1 trillion during 2006. There are approximately 4,500 registered insurance companies in the USA.
Japan is the world’s second-largest insurance market with total premiums during 2006 of USD$460 billion.
The United Kingdom is the world’s third-largest insurance market with total premiums during 2006 of USD$419 billion.
The next leading insurance markets consist of the primary European Union countries such as Germany, France and Italy, in that order.
Elsewhere in the world, emerging markets grew 16.3% in 2006, with the largest emerging markets being in South and East Asia at USD$138 billion in total premiums, representing 20.8% growth over the previous year.
The Australian insurance market accounted for premium totaling USD$16.9 billion (NZD$21.5 billion @ av’ 78.5cents-USD$) which equates to approximately 0.454% of the total world insurance market – and New Zealand even less.
Note: It is estimated China will become the world’s largest insurance market by 2015 subject to continuation of the current economic trends currently experienced in China. It is estimated by RGIB that by 2020 the number of licensed Australian and New Zealand insurance companies will shrink and that more than 50% of all commercial insurance business will be underwritten by overseas registered insurers either under their own names or through local agent networks by way of ‘facultive reinsurance’ – ‘quota share reinsurance’ and/or ‘treaty reinsurance’. Australia calls Overseas Insurance companies ‘Direct Offshore Insurers’ [DOFI} and/or ‘Unauthorised Foreign Insurers’ whereas New Zealand calls Overseas Insurance companies ‘Foreign Insurers’ and/or ‘Unauthorised Foreign Insurers’ [UFI]
Considering arranging your insurance with an Overseas Insurance company – DOFI or UFI
The RGIB’ Insurance Broking Group can provide customers an array of alternative solutions for their insurance requirements; being a progressive and innovative insurance broker we arrange more than AUD$5.5 Billion cover for over 6,000 business, liability & indemnity based clients in Australia, New Zealand and throughout the Pacific region.
RGIB has relationships with most local insurance companies, including ‘specialist underwriters’ who don’t deal with the public directly, which means we can often find a local insurer willing to provide the cover a client needs but, has been unable to get in the local market.
It doesn’t matter whether your insurance needs are large or small, or how complex or non-complex your requirements of cover are because there are insurance companies out there that specialise in insuring everything from silk worm farms through to medical negligence insurance; sometimes at less than half the cost of local insurers which is an important factor when your business relies on slim margins and maintaining pricing advantage.
We have regular dealings with an array of overseas based insurers, from London to Singapore; from the Netherlands to Bermuda; from Switzerland to Chile who can provide a range of alternative solutions to meet our client’s insurance needs when the local markets cannot.
Some of the products and services New Zealand and Australian clients have with overseas insurers include:-
- Aviation Insurance
- Aviation Medical
- Aviation Total Loss Insurance
- Aviation Hull & Liability
- Bankers Blanket Bonds
- Broadform Liability
- Builders Warranty [top-up]
- Blue Water Yachting
- Captive Insurance
- Cargo & Transit
- Cancellation Expenses
- Concerts & Performances
- Community Events & Risks
- Contingency Insurance
- Cost Overrun Insurance
- Deposit Bonds
- Divorce Insurance
- Directors & Officers
- Demand Warrants
- Extended Warranty
- Experimental Research
- Gap Cover
- General Liability
- Group Liability
- Home Childcare & Nanny
- Human Drug Trial Liability
- Import & Export
- Infrastructure & Construction
- Loan Protection Insurance
- Livestock Disease
- Machinery Breakdown
- Marine Insurance
- Mining & Exploration
- Medical Indemnity
- Personal Accident
- Pluvious Insurance
- Political Risk
- Pollution Risks
- Prize Indemnity
- Peace Keepers Insurance
- Professional Indemnity
- Protected Cells
- Public & Product Liability
- Racing & Regattas
- Railways & Trains
- Religion & Cultural Risk
- Security Contractors (war zone)
- Surety Bonds
- Ultra Lights & Gyro-copters
This list is only a glimpse of the insurance products that might be available in the Worldwide insurance market.
In some circumstances there is a greater advantage in setting up your own insurance company and keeping the profits in house rather than the profits being kept by someone else see Captive Insurance click here
Claims Handling & Administration
Our services don’t just start and stop with arranging your insurance cover with an overseas insurer. In fact, depending on the insurer’s requirements, it will most likely be necessary that we provide any on going administrative requirements as and when necessary; including expanding the cover as required, adding new items to the policy’s cover if and when new items are purchased, and of course arranging all the paper-work to place the insurance and renewal it.
Claims:- There are many claims adjusting services available from a variety of multi-national and local firms, some specialist and some general. Thus, as part of our intermediary services we will ensure there is responsive and workable claims administration process in place in order to deal with claims promptly and efficiently.
In most cases; RGIB will have authority to initially appoint a particular claims adjusting firm with expertise in relation to the type of insurance cover and claim; [ie; an aviation specialist assessor for an aviation claim] so, the claims process will be similar to that of the claims process for local insurance company but, not the same because some regulations might apply to local insurers but, not to the overseas insurers.
How do we source Overseas Insurance Companies and how secure are they
RGIB is well known within the international insurance market as a brokerage always on the lookout for new and innovative insurance products and services for our clients; as a result we get a steady run of solicitations from overseas insurers wishing to introduce their products and services to us.
Determining the stability of an insurance company is paramount to our consideration whether or not to do business with them or not – because it’s not just about price alone; we need them to be there and ready to pay claims when they occur; remembering some claims might not materialise for several years after a policy has expired.
There are a number of methods used for determining how secure an insurance company might be [well on paper at least] however, since the onset of the global financial crisis it is clear that ratings agencies and auditing firms are not infallible and in a number of cases some were shown to be entirely inept; as were a number of insurance industry regulators.
For more than two decades our Managing Director, Mr. Charles Pratten has built a number of enduring relationships with some of the heads of international insurance companies s and insurance intermediaries, including managers for Lloyds of London syndicates. But, before doing business with any insurer we ask a lot of questions; we visit them and we set about building personal relationships with the people that count.
From time to time we also meet with their home jurisdiction regulators; and on occasions speak with independent claims adjusters about how their dealings with the insurer has gone; from a claimants perspective – were policyholders treated fairly.
Not every international insurance company who approaches us meets our criteria; in fact it can take several months of enquires before we will agree to deal with an international insurer, if at all.
Over the years our firm has built a reputation of tenacity; when a client presents us with something out of the ordinary we won’t shy away from putting in the hard yards to get the deal done. On many occasions RGIB has rescued businesses and enterprises from imminent closure because they were unable to find insurance cover from the local market and/or at an affordable price.
From the most basic: [Australia] largely as a flow on effect from the collapse of HIH while Australian insurers cleaned up their books, thousands of market stall holders were faced with ruin because they couldn’t get public liability insurance in order to set up their stalls; RGIB arranged a facility with an overseas insurer that provided the cover they needed at a lower premium then they had been paying before;
to the exotic: [Australia] when the largest segment of the general aviation community ‘recreational and experimental aircraft’ were faced with the dilemma that no one wanted to insure them [almost 10,000 aircraft owners and members] RGIB through it’s specialised aviation insurance division ‘Civil Aviation Insurance’ arranged a facility with an overseas insurer who provided what they needed; that company was already providing the same cover for several similar aviation groups throughout Europe resulting in a secure cover at affordable premiums;
to marine insurance [New Zealand] when a number of blue water yachtsman wanted cover for extended cruising throughout the Pacific and beyond, they were left with little choice but to sail away on their trip of a lifetime, uninsured. However, RGIB through its specialised marine insurance division ‘United Marine Insurance’ arranged a facility with an overseas insurer who provided the cover they needed; and still do.
Of course there are regulatory compliance matters that need to be dealt with; that’s our job, we’ll ensure any decision to arrange a client’s insurance with an overseas insurer meets the necessary criteria and legal obligations.
To learn more about Foreign Insurance with an overseas insurance company we have attached a slightly edited version of our opinion provided to the International Association of Insurance Supervisors [Switzerland] concerning the Australian regulatory requirements for DOFI’s. While the New Zealand rules are slightly different the methodology used is similar and can be used as a guide. Please click Here
RGIB is an expert at securing alternative insurance solutions for hard to place insurance