Mind the gaps: Zurich Prime keeps coverage consistent

As Brexit transforms the way insurers do business in the UK and across Europe, multinational customers are looking for certainty that coverage doesn’t contain gaps and is written in alignment with local insurance premium tax requirements, laws and regulations.

Zurich’s Prime international property and business interruption insurance, in place since 2015, addresses those issues and provides consistent coverage across multiple countries. Zurich Prime coverage contains standard wording that is used in around 90 countries and has been adapted for local jurisdictions, regulations and mandatory requirements in all countries.

The Brexit transition period ended Dec. 31, 2020, meaning big changes are in place regarding insurance underwriting and purchasing. UK insurers no longer have “passporting” rights that allowed them to do business in European Economic Area (EEA) states either through a branch established in an EEA state or on a Freedom of Services basis (FoS), which allowed them to provide insurance services from the UK.

Zurich UK’s response has been to use an underwriting hub in the EEA to provide cover under FoS within the EEA countries, explained Marco Layher, International Underwriting Manager Property. “We are issuing Freedom of Services business out of Spain via the local Zurich Insurance plc branch office,” he said.

The Freedom of Services policy normally consists of a customized version of the UK master policy - which can be Zurich Prime or another type of wording - providing a largely congruous cover across the EEA countries. The policy includes mandatory covers and requirements in the countries and largely reduces the potential gaps with the UK master policy. The Freedom of Services coverage can be issued either as a ground-up policy or as Difference in Conditions (DIC) and Difference in Limits (DIL) cover for the insured premises in the EEA.

Where a local policy is required (within or outside the EEA), Zurich’s standard wording for international program policies is Zurich Prime. Zurich Prime’s property and business interruption coverage, generally written for companies with annual revenues of more than $250 million, helps ensure that local policies provide a broad and consistent coverage to customers and don’t leave open unexpected or unknown gaps that could arise from the use of local standard wordings, Mr. Layher noted.

Local servicing issues such as issuance of insurance certificates and claims handling are simplified, he pointed out.