International Benefit Pooling: A strategy for risk and cost reduction

International Benefit Pooling: A strategy for risk and cost reductionThink of getting a nice dividend on your benefit investment at the end of the year. That sums up what international pooling can do for mid-market employers.

In our experience we’ve seen some hesitation to use pooling, but when you are dealing with localized benefit experts like the Asinta Partners, you have very little to lose and so much to gain.

What is international pooling?

  • It’s a way global companies better manage risk throughout the world.
  • The different employee benefits programs of multinational companies are combined to form an international pool, which results in financial savings and better control of the risks.
  • Example: Generali offers this synopsis showing the insurers and types of coverage offered for pooling in different countries.

How does international pooling work?

Each local benefit plan is insured with a carrier who belongs to a network of insurance companies. Every year, the network draws up an account for the sponsoring company, called the “international account.” This shows the total premium paid to the insurers, the total claims paid by the insurers and other amounts received. A charge to cover the insurer’s expenses and risk exposure is deducted and any remainder is paid to the multinational company as a dividend. If there was a loss, the negative balance is usually cancelled under the “stop loss” system or is carried forward.

Advantages
The big advantages of international benefit pooling according to Investopedia are:

  • Economies of scale and purchasing power
  • Global experience rating
  • Financial cost savings
  • Improved underwriting terms and conditions
  • Annual reporting
  • Management tool and Information base

Interested in pooling your international benefits?

Let us know the countries where you need assistance and we’ll put you in touch with the Partners who can help you.

International Benefit Pooling: A strategy for risk and cost reduction