25 years ago there were only a handful of markets able to write multinational business. These included, Chubb, AIG, Royal Sun Alliance, Zurich and Allianz. There were also a handful of international brokers namely Marsh, J&H, A&A, Sedgwick and Willis/Coroon and Black. These brokers developed international representation and opened up and staffed offices with international experts worldwide. Global Business Units were established and multinational clients were assured a global program, centrally managed would be serviced locally worldwide. Unfortunately these brokers’ service solutions were entirely in support of the broker network versus the local service needs of the client.

Over the following 10 years broker consolidation resulted in fewer “international brokers” and the development of a handful of network oriented approaches to multinational business. What the market experienced over this period of time was a lack of focus on the true needs of a multinational customer – namely a global risk management program. Instead the broker solution turned towards a network approach to service the needs of a client.

Today the market “enjoys” the services of three global brokers namely, Aon, Marsh and Willis and the network driven approaches of Assurex, INI, WBN and several others. Each of these brokers or networks focuses on supporting their networks needs first and the local needs of the client second. What is further missing from these approaches is the required multinational expertise to design, develop and implement and manage a multinational program. While they all have worldwide networks, the “expertise” from a multinational perspective is missing. Their multinational broker solutions fall to the network which is a local solution worldwide versus a global solution implemented locally.

Globex has stood tall in its practice of providing centralized multinational expertise and today boasts the largest Global Business Unit in the marketplace even when compared to Aon or Marsh. This Unit acts in the capability of a Partner broker’s/underwriter’s international department providing a full array of risk management services on behalf of the Partner broker/underwriter. The unit is in turn supported by a worldwide network of brokers and underwriters in over 130 countries across the globe.
Globex has 50 full and associate partner brokers in North America with a combined revenue base in excess of $3.1 billion. Some 300 regional and local brokers around the world, with a combined revenue base of more than $2 billion, handle non-North American services as well as referral business coming into North America.

For More Information

Contact us to learn more about the opportunity and how to partner with Globex.

Your participation and support were absolutely essential to the success of this important event. We literally could not have done it without you.

The agenda–which included keynote speakers Maurice R. “Hank” Greenberg, Chairman and CEO of C. V. Starr & Co, Inc., and Lord Peter Levene, Chairman of Lloyd’s–can be found in the link below.

Judging from the many emails, faxes and calls we received after the Conference, we are pleased that you enjoyed it as much as did. Excerpts from your feedback can be found in the links below.

All Globex Partner Brokers can benefit from the wealth of knowledge and information shared by our speakers and presenters. Much of this information can be found by visiting our exclusive “Partners only” website, www.globexintl.net. We encourage all our Partners to read through these materials.

For More Information

To learn more about the Conference choose one of the links below:

• 2010 Partner Broker Conference Agenda
• Your Feedback

Placing coverage for US subsidiaries can be both confusing, and costly. Globex is a dedicated team working as your international Account Executive in the USA. We have carefully selected our US partner brokers and insurance companies, in order to provide tailored risk management solutions in a cost effective manner. We have the flexibility to handle the insurance needs of a start-up sales office in Chicago, to a major US subsidiary with manufacturing operations across the country. Globex also understands the importance of educating the customer about the risks inherent to the USA and how to address them, be it with local management in the USA, and/or with senior management of the foreign parent. Knowing what is the true cost of risk for companies operating in the USA is critical to the profitable long-term growth of these entities.

Contact Globex International Reverse Flow Services division as early as possible when dealing with any U.S. situation or exposure. Better than 50% of what we do is to educate and guide you in order for you to put your most competitive foot forward and enhance the opportunity to provide the best solution for your client or prospect. Our degree of involvement depends on our ability to add value.

For More Information

Contact Andras Koppanyi to learn more about this tremendous opportunity.

Globex understands the complex risks faced by today’s multinational companies, particularly those of foreign companies doing business in the USA. Our International Reverse Flow Services division provides brokers and insurers with the ability to provide superior risk management services in the USA for the subsidiaries of foreign owned companies.

Globex International is YOUR global business unit. We offer a team of international insurance professionals with over 200 years of experience. We offer a national network of 50 leading partner brokers in the USA. Globex has the expertise to properly address the insurance needs of US subsidiaries of foreign parents, from a truly global perspective.

Useful Links

• Organization for International Investing
  
• Invest America
  
• Council of American States in Europe
  
• Foreign Direct Investment Magazine
  

Forms & Downloads

• Simplified USA Proposal Form

For More Information

To learn more about how Globex and our Reverse Flow team can help you take maximum advantage of these opportunities, click here.

Your participation and support were absolutely essential to the success of this important event. We literally could not have done it without you.

All Globex Partner Brokers can benefit from the wealth of knowledge and information shared by our speakers and presenters. Much of this information can be found by visiting our exclusive “Partners only” website, www.globexintl.net. We encourage all our Partners to read through these materials.

By Douglas B. Fay – Founder and President, Globex International Group

Stats and Facts

In the mid 1980s the average U.S. based multinational (having operations in more than one country outside the U.S.) generated on average 15% of their annual revenue from sales/operations outside the United States. Today the average U.S. based multinational generates approximately 45% of their annual revenue from outside the U.S.

In the early 80s the majority of companies operating overseas were Fortune 1,000. These large companies took a very methodical and time-consuming approach towards expanding overseas. Initially they exported their products into overseas markets. This activity was followed by the establishment of distribution centers in key growth areas outside the U.S. and eventually these companies established factories, production facilities, offices and hired local employees. For most Fortune 1,000 companies this process took many many years.

Today there are some 65,000+ multinational companies worldwide. Here in the U.S. it is estimated that there are some 20,000+ multinational companies – far more than those companies making up the Fortune 1,000 or even Fortune 5,000. The “middle market” – defined by many in many ways – is the fastest growing segment of business that is growing overseas. Percentage growth wise the “middle market” far exceeds the international growth of the Fortune 5,000. This is primarily due to a truly global economy, communications technology and the ability to acquire versus grow an international capability! No longer do companies need to follow in the footsteps of the previous Fortune 1,000. Now companies of all sizes, from the INC 500 to the Fortune 50 can gain immediate access to international markets via an acquisition.

International growth and expansion is also occurring at a rapid pace amongst emerging multinationals or those with limited physical assets overseas. Statistics show that emerging multinationals are made up primarily of companies that export and import.

In the 80’s there were several thousand companies that imported and exported goods. Today the majority of those companies have physical assets overseas and can be considered small to “middle market” multinationals. As of last year there were some 900,000 importers and exporters here in the U.S.!

The world is truly becoming smaller, more and more companies are operating outside the United Sates AND this growth overseas is virtually across any and all industries or businesses.

A key statistic that is propelling this growth and which will ensure that this trend continues for a long long time is the fact that 95% of the worlds population exists OUTSIDE the United States.

What do all these statistics mean?

• When a U.S. based company dips its toes into international waters they are soon up to their knees and torsos in international commerce.
• The majority of the growth in the number of new multinational companies is in the ”middle market” and these companies are expanding internationally at a rate the far exceeds larger multinational companies.
• The ongoing growth in “middle market” business is being fueled by an ever-growing increase in the number of companies importing and exporting or “emerging multinationals”
• This expansion overseas is happening in al industries and in all segments of the economy.

The issue at hand

If we accept the fact that companies of all sizes and in most industries either are operating overseas or will be operating overseas one can assume that from a risk management standpoint the existing as well as future needs of these customers are being met.

Unfortunately this is not the case. Over the past 20 years the insurance industry has seen a growth in the number of insurance companies either operating internationally or professing to have an international capability. Many years ago there were really only three insurance companies capable of providing a product to cover a multinational company’s international insurance exposures. These were AIU (AIG), Continental and AFIA. Today there are some 24 companies that advertise an international capability, some delivering more than others. While each of these companies have strengths and weakness one can conclude that the insurance industry from an insurance company standpoint has finally begun to recognize the opportunity and the need to provide customers with international products.

What about from a broker or insurance agent standpoint? 20 years ago there were 5 “international” brokers and that number quickly grew to 7. One would have predicted that based upon the statistics above that this number would have grown to 12 and perhaps 20 today. Unfortunately, today, the “market” recognizes 2 global brokers namely Marsh and AON. In my experience, both of these brokers focus their attention on the Fortune 1,000 to the Fortune 5,000 leaving thousands of companies still in need of true global risk management services. Additionally the international expertise within these firms, more often than not, is sold and delivered through an international network of owned brokers across the globe. This “network” approach has led many brokers/agents to feel as if this is indeed the solution for these clients and as such there has been an emergence of some “network” alternatives to the AON/Marsh international networks.

While worldwide representation is very important, what customers today often are not getting is the centralized global/multinational knowledge, experience and expertise required to properly manage and control a risk management program outside the United States. Today, other than the Globex International Partner Broker model which mirrors the old J&H international model by providing a customer with a dedicated international department working hand in glove with overseas affiliates, many multinational customer’s needs are still not being met.

Contributing to the dilemma as to why the ideal solution is not being met is the fact that there are very few seasoned multinational AEs or experts in the marketplace today. Years ago the large global brokers housed International departments or Global Business Units. Today, these AEs tend to handle both domestic and international accounts are spread thin, and are not housed as a distinct international team. Other brokers who practice a “dots on the map” approach often have very limited in-house multinational expertise. We strongly suggest that the brokerage community recognize this gap and begin the process to train and develop future multinational insurance experts.

What is the ultimate goal?

Multinational customers today, regardless of size should be enjoying the same level of risk management expertise internationally as they do domestically. This expertise needs to go WELL beyond having worldwide representation or dots in countries across the globe. It means having knowledgeable, experienced, easy to access international insurance professionals who can deliver the same products and services internationally as they do domestically.

For the most part the current solution practiced by most brokers/agents is essentially to offer access to a network of foreign brokers and agents across the globe. The ideal solution, however, is for domestic agents and brokers to have vision and look out to the future to see what their existing and prospective customers will need in order to compete and survive AND grow. What this means is that these companies will require their vendors or service provider to have an in-house international or global capability and eventually this capably will have to match or exceed that capability which the customer is enjoying domestically.

How does one get there?

We suggest that there are two key questions a company should ask itself when evaluating the level of risk management services it has or needs outside the U.S. namely:

1) Do we know what our total cost of risk outside the U.S. is including premium, fees, taxes, claims, commissions?
2) Do we have the same degree of control over our international exposures as we do our domestic?

In today’s day and age, given the lack of focus the brokerage community has placed on delivering required risk management services by promoting a dots on the map solution, the answer in most cases will be no to both questions. Only for those customers who have large global Captive programs insuring worldwide risks will the answer more often be “yes” to both questions.

The mission for companies and brokers/agents alike is to work with one another so that the answer to both questions for all global customers is “yes”. This however takes a longer term focus than is currently being practiced.

The Process

The majority of brokers competing on multinational business will ask for current values and exposures, current policy terms and claims. They will then do their best to duplicate the program while striving to achieve a cost less than the client is currently paying. They will also either require or strongly suggest that the current international broker relationships be dismissed so that then the successful broker can install their network of brokers or their dots on the map. The large global brokers will require that their network of brokers service the local business needs while those alternative brokers who offer a network will strongly sell their dots on the map.

We believe that this is an approach that is fraught with problems and never allows the client to truly manage their international risk. Our suggestion to clients and brokers alike is to step back and begin “the process” by evaluating all the exposures the client has in any given country. Typically these exposures have changed over time as the company has grown and the current risk management program in place may not reflect these exposures. A local insurance expert should do this evaluation. At the same time as this local survey is being done, an interview with local management can take place to understand their view of the current program and arrangements. They can also share local developments and future plans that might impact the risk management program. Finally it makes sense to review the current insurance program for that entity for all lines in order to evaluate how appropriate current covers are. The result of this survey is a report to the customer detailing exposures, current service providers, likes and dislikes, strength and weaknesses and total cost of risk for that country to the client.

With this report in hand the client and the broker can begin to build, from the ground up a risk management program that reflects the needs of the client (both locally and globally) versus the needs of the market or the international broker network. As this program is built conceptually the risk finance piece can be designed (capacity, coverage, premium) the program administration can be addressed (claims reporting, engineering, policy issuance, reinsurance, fronting etc) and the program servicing can be addressed (third party services, retail broker services – retain existing broker or interview/install a new broker).

If a customer follows these preliminary steps in the process they become educated as to the various risks at hand, they have information on ways to improve current arrangements and can identify current and future costs of the program. The logical next step is to take this information and design/develop a conceptual program including suggested markets and local service providers who are best able to deliver the ideal solution.

A marketing exercise is then performed using the risk assessments as tools to educate the market. Local broker roles and services are outlined and bid. The program pricing then comes together.(Unfortunately in today’s day and age it is at this stage in the process where a typical broker or agent begins and the result is a program based upon incomplete information and an international risk management program that is disconnected from the domestic risk management program.)

If the customer is satisfied, and they should be because they have been part of the entire process, the program is implemented AND MANAGED from the central source so that the local client, local market and broker are all acting in concert for the good of the program worldwide. Central management and control ensures that the client will always know what is going on and will be able to make changes centrally and locally efficiently.

As the International Risk Management program matures it can eventually be dovetailed into the Domestic Risk Management program offering the customer a truly seamless global Risk Management program. At that stage the client will then be able to answer, “yes” to the two very important questions discussed earlier.

Conclusion

From a customer’ standpoint we suggest you begin the process today to take control of your international exposures and risk management program. From a broker/agent perspective we suggest you begin today to understand what your customers are doing or thinking of doing overseas and in turn begin the process to provide these customers internationally that which you are able to offer them domestically. Developing an internal international resource or temporarily outsourcing this resource is also suggested.

Thank you for making the 2010 Partner Broker Conference a huge success.

From country presentations to product breakout sessions to networking activity during lunches and dinners, I want to thank each and every one of you for your participation and your efforts to engage and interact with each other.

While Globex created the venue the participants became the key ingredient to a productive and educational two days.

On behalf of the Globex team – Thank you!

- Douglas B. Fay

For More Information

To learn more about the Conference choose one of the links below:

• 2010 Partner Broker Conference Agenda
• Your Feedback

• Any market can be an admitted global player by partnering with Globex! Globex lends instant global capabilities to our Partners who have historically been unable to compete or were limited to a supporting role on international insurance programs.
• You can have access to admitted local paper or fronting policies on multinational programs: Globex arranges admitted policies as pure fronting policies, or as underlyers to international programs. We handle hundreds of admitted placements worldwide.
• We have extensive experience designing and placing international Marine, Property and Casualty, and Professional Liability programs. We are currently very active in working with markets to meet the ever changing challenges of Directors & Officers Liability, where admitted requirements are becoming stricter in many countries.
• When you partner with Globex, “your” network of admitted insurers in over 100 countries is ready to go to work for you: These carriers are ready to issue fronting or admitted policies on behalf of our Partners. We are constantly adding local carriers to our network. We have unparalleled facilities in Brazil.
• We are our Partner’s international underwriting resource desk. Together with our international network we provide our Partners with the latest market intelligence and updates on regulatory requirements for their programs. We also provide pricing and underwriting assistance.
• Our fees are very competitive compared with the typical 10 – 12% fronting only fees charged by global underwriters (ACE, Zurich etc).· In addition to our central underwriting office located in Connecticut we staff coordinating offices in Europe and Beijing.
• Our custom designed online platform, www.GlobexWorld.net, makes the submission and placement process easy and consistent. Our Partner Markets and international fronting partners can access GlobexWorld securely, using individual user names and passwords.

Global Experience, Global Resources

Our staff has previous employment/management experience with the following companies: Chubb, Continental, AIG/AIU, Royal, General Accident, Home, Arkwright, CNA, Cigna, Lloyds, Aon, A&A, Marsh, Gerling, Johnson & Higgins, Guy Carpenter and Willis.

Our staff’s corporate account experience (past and present) includes the following: GE, Walt Disney, Reynolds Metals, Intercontinental Hotels, Hercules, Bristol-Myers, Revlon, Kendall, Colgate, Warnaco, Sunbeam, Ethyl, Seventh Day Adventists, Watchtower, Sasol, Schering A. G., Dun & Bradstreet, Omnicom, NZ Telecom, Himont, BASF, Trellebourg, Gillette, Chesebrough-Ponds, Certainteed, Siemens, Bankers Trust, Samsung, Rohm and Haas, S.C. Johnson; Marriott; Massey Ferguson; Westinghouse; Continental Grain; Dana Corporation, The Limited, Planet Hollywood, The Gap, Staples, Trinity, Radio Shack, Merck, IBM, MASCO, Stanley Works, Caterpillar, WalMart, and many, many others.

A core element of Globex services is our worldwide carrier Partnership network of local companies in over 100 countries across the globe. These countries include: Antigua, Argentina, Aruba, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belgium, Belize, Bolivia, Botswana, Brazil, Brunei, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, Estonia, France, Germany, Grenada, Guatemala, Trinidad, Hungary, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Korea, Kuwait, Latvia, Lebanon, Lesotho, Lithuania, Malawi, Malaysia, Mexico, Mozambique, Monaco, Namibia, The Netherlands, New Guinea, New Zealand, Nigeria, Norway, Oman, Pakistan, Republic of Panama, Peru, Philippines, Poland, Portugal, Puerto Rico, Qatar, Romania, Russia, Rwanda, Saudi Arabia, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, St Kitts, St. Lucia, St. Marten, St. Vincent, Swaziland, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Trinidad, Tunisia, Turkey, Uganda, Ukraine, UAE, United Kingdom, USA, Venezuela, Vietnam, Yemen, Zaire, Zambia, Zimbabwe.

For More Information

Contact Kathrin Howard, Vice President, Multinational Underwriting Services, to learn more about how you can take advantage of this exciting opportunity.