Policy Change and Uncommon Cents

Humour me for just a minute…Can I get a quick show of hands? 

Who among you has a stamp or coin collection? Not so many. Thought so. 

One more question: For those of you that do, how many of you would take these precious anthologies with you on a cross-border assignment lasting probably not more than two years? Exactly as I suspected.

Stamps. Coins. Fine Arts. Wine collections. Seriously? Why does this stuff keep popping up in insurance policies for expatriates, especially ostensibly 'new' ones targeting the niche mobility and relocation industry in the age of the Millennial?

"Dude… for our 9-month trip to Amsterdam…are we taking the Rembrandt with us or shall we just visit one at the local museum? While we're on the subject, should we check that with the case of 1947 Château Pétrus, or will it be carry on?"

Don't even get me started about oriental rugs.

It being quite obvious to everyone that some of these coverages have little if any relevance in the domestic market, it's nothing short of absurd, embarrassing, really, that they factor into rating and premium calculations for international assignees.

QUICKLY FALLING BEHIND

In a forgiving light, it might be said that the insurance industry is comprised of revered institutions ensconced in convention and steeped in hallowed traditions. There's unquestionably a degree of value to all that, however the flipside is that the industry can be somewhat impermeable to the winds of change and evolutionary forces that are intensified and accelerated within niche sectors such as global mobility and international relocation.

In the day when international mobility was primarily about baby boomers from a finite and familiar set of industries emptying the lavish contents of one sprawling dwelling into another one for a good long stay, there may have been some applicability to these rating relics of the past.

Indeed, the genesis of household goods in transit and storage insurance was a process that looked first to domestic homeowners' insurance as a departure point, which at the time, was probably a good fit. But in an era when certain parts of your average domestic household policy stopped making sense is a while ago, and where your typical assignee is a millennial staying nine months or so in a furnished condo ….not so much.

At any rate, everyone knows that most international assignees don't bring fine wine with them on foreign assignment; it's far simpler to buy it in fin restaurants and expense it to the company. (I probably found that way more amusing than the average HR mobility manager, but I work in risk management and as such need a private giggle from time to time.)

GOOD FROM FAR… BUT FAR FROM GOOD.

As we once again round the bend into a new era of mobility it is disheartening to see certain players resort to their old ways under the guise of innovation.In a scramble to give the impression of contemporary relevance, the old standards have been trussed up, made up, nipped, tucked, lifted, injected and trotted out amid distracting and unwarranted fanfare.

Away from the din and bright lights however, closer inspection reveals the greying roots beneath the ornamental façade. The result is an upside down and nonsensical hash of coverages.

HAVE TABLET AND SMARTPHONE, WILL TRAVEL.

A case in point would be certain executive lodging policies that have been rushed to market with great ceremony. Owing to the confused overlaying and origins of the policies, they appear to be the outcome of a slow-minded effort, or someone trying to pull a fast one; neither of which is terribly appealing.

At first blush these policies appear to boast sky-high limits measuring in the tens of thousands and seem rather generous... until you get to the bit about the limits applying primarily to the assignee's personal belongings and the imposition of highly restrictive sub-limits on computers and electronic equipment.Do these belongings not comprise the predominant part of personal effects in today's world? One is left to wonder what the remainder of the limit was intended for?

Clearly not the assignee's furniture; they didn't bring any. It must be for all those oriental rugs, coins and stamps that Zoe the Java Developer brought along in her Kate Spade knapsack.

Meanwhile buried behind those misleadingly high limits are inadequate limits for damages and dilapidation to the lodging, which betrays a fundamental and essentially upside down perspective of where risk rests. High limits for assignees where they don't need them, and low limits with regard to all the more costly furnishings and improvements to the unit.

SURRENDERING TO THE SWEET RELEASE OF DEATH

Why did this happen? Because starting from scratch to develop an insurance policy miles away from anything that has every existed is soul-destroying, spirit-crushing, eyeball-drying, losing-the-will-to-live type stuff. Nevertheless, at a certain point some masochistic fool must throw him or herself against inertia, rigidity and inflexibility with reckless abandon in efforts to align product offering to market need.

Ironically there has arisen a deafening chorus of lip service respecting the modernization of the sector to accommodate modern imperatives such as globalization and demographic shifts. Truth be told, I'm betting real change will come from the folks on the ground who stop and listen to their clients who buck the trend and swim against the current.

If I am wrong, you can have all my stamps and coins, but not my wine. I'll need that; …I've been reading insurance policies all day. 

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ASAP London 2014
ALTHOUGH NOTHING SEEMS RIGHT IN CARS…
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