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For international employers who do not have sufficient numbers of employees to make a single company risk pool feasible, certain risk pool administrators offer small group multinational risk pools, consolidating the experience of many companies who share in the risk pool result.
In a pure risk pool, unless there is stop loss insurance, risk pool losses are carried forward and must be paid off if the risk pool is cancelled.
What is a Multinational Risk Pool
A multinational risk pool is a financial arrangement through which the parent company has the opportunity to enjoy substantial cost savings through the global risk pool program of consolidated experience evaluation and recognition of individual country and expatriate insured benefits contracts as components of a single insurance group. In essence this is a combined program in which individual country program costs and experiences are consolidated, and annually the company may enjoy the financial advantage of good loss experience. This is particularly advantageous to a company where individual country benefit contracts may not be sufficiently large to avail themselves of the financial results of favorable insurance experience.

When Multinational Risk Pooling Makes Sense
To optimally benefit from a multinational risk pool, generally an employer must include

Local country employee benefit programs which are insured and capable of recognizing favorable experience at the consolidated level.

A country mix having no one country insured employee population so dominant in size as to remove the benefit of risk pooling.

A sufficient number of local country insured benefit plans and sufficient total number of employees to make multinational risk pooling advantageous.

Selecting a Multinational Risk Pooling Partner
The multinational risk pool will be administered by a global risk pool administrator, who will be able to pool coverages offered by its affiliate insurers in the various countries. Selecting a pool necessitates purchasing employee benefit insurances through the affiliate insurers. In addition not all risk pool administrators will include all coverages eligible to be pooled and will not perform pool accounting in the same way. Consider carefully

Is the multinational risk pool established and stable?

Are the risk pool affiliate insurers the most prominent in the countries of interest?

What are the minimum employee populations that the risk pool will include?

What coverages will the risk pool administrator include in the risk pool?

How does the international risk pool administrator treat financial losses from poor experience in the risk pool?



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