Zurich’s initiative to combine corporate life and non-life solutions spells good news for captives
Risk managers are working in partnership with HR and are becoming more involved in decisions about employee benefits – a trend being actively encouraged by global insurer Zurich.
The firm brought together corporate life and non-life solutions three years ago, a decision that it says could help break down silos and achieve more favourable risk profiles for captives in particular.
Zurich global head, customer management corporate life and pensions, Paolo Marini (pictured), said this was a “strategic decision”: “We feel that in the corporate customer sector there really is so much complexity driven by regulations and compliance, and around the size of liabilities that [these areas] can no longer be looked at in isolation.
“We feel that the silos that traditionally exist in the insurance and the corporate world have to be broken down. That’s why we encourage and welcome the trend we are seeing where risk managers are [becoming] more involved in decisions related to employee benefits, particularly in the financing space … and [in devising] global [compensation and benefits] policies …”
This could be particularly beneficial for captives, Marini added: “The most visible part of where risk managers are involved in [employee benefit decision making] is in the use of captives. Traditionally, this was only reserved for the larger corporations, but we see a trend towards more people having a look at this for many good reasons.
“One in particular is combining very different types of risk … [which] creates a much more favourable risk profile for the overall portfolio of the captive, particularly those that will one day be subject to Solvency II.
“It means that the capital requirements associated with that portfolio will be more favourable. This really is the natural bridge between the HR liabilities that are [traditionally] seen in isolation and risk management financing.”
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