Connecting risk & benefits to drive organisational success

GCP Short: Connecting risk & benefits to drive organisational success

Transcript

Richard: [00:00:00] Hello and welcome to this GCP Short produced in partnership with Zurich Global Employee Benefits Solutions, in which we hear firsthand from the shipping giant Maersk about how they have successfully implemented a global EB captive program driven by collaboration between risk insurance, hr, and.

Benefits over the next 25 minutes. I'm joined by Chris Mason, UK and APAC Director of Customer and Distribution Management at Z jbs, as well as Dana Vos Global Benefits and Wellbeing Lead at Maersk. And Christine Toscano, insurance director at Maersk in the USA. Christine and Dana explain how in their different roles they have contributed to the success of a growing EB captive program to considerations when the lining priorities and how the captive has helped the organization achieve its [00:01:00] EB objectives.

So it's great to have, uh, Christine and Dana onto the Global Captive Podcast for the first time. And welcome back Chris as well. Christine, let's start with you. Maersk has a, a very large captive program from the, the PNC side. A quite a high profile one, uh, which I think our listeners probably know quite a bit about.

Some of your colleagues on that side are, are quite well known in in the market. What made Maersk want to incorporate their employee benefits schemes into their captive starting in 2020?

Christine: I think we have several reasons for that. The first being was that there was a need. The HR team had goals of better oversight of what was being placed around the world, as well as to.

Becoming less vulnerable to the volatility in the commercial market. So it, it naturally made sense to make use of the, the captive that the company had invested resources and capital [00:02:00] into to, to see if that could, that could help. Achieve some of those goals. And secondly, certainly to have the diversification of the employee benefits, risks and the significant income was something that made the captive itself stronger and more diversified.

Richard: Yeah. We hear a lot about that diversification benefit on the topic of, uh, employee benefits in combination with PNC in a captive Dana. HR is, is obviously key in any discussion or decisions for employee benefits or changing benefits or changing the way they're organized and financed. So how did. Manage the, the change of financing your EB schemes through the captive and, and was there any kind of change or considerations that needed to be made?

Dana: I think further to what Christine said, it was just a natural progression to include EB into the captive. It also gave us greater visibility and control over what our spend was. So prior to having the captive, if you think about the size and scope of Maersk, they were plans that were, one had different renewal dates were being budgeted [00:03:00] separately.

And so forth. So the integration offered us better. Flexibility made, uh, ensured that our global design solutions were tailored again to that diverse workforce You mentioned. And there was more importantly, consistency across the regions. It allowed us to also broaden our corporate strategy to ensure again, that our benefits remained relevant and competitive.

To me, the most important thing is being in the captive has allowed us from a global perspective to have transparency and efficiency. Um, so, you know, it's our business and, and. Biggest consideration, um, that we needed to take as we continue to evolve as an organization.

Richard: Yeah. And as we said, HR is obviously so important.

And Christine, how would you define that relationship that you have now then with your, your HR colleagues?

Christine: Yeah, I think if you had to do it in one word, it's probably collaborative. Dana and I were lucky enough to inherit this relationship with others before us that had paved the way, but we've been [00:04:00] able to pick up on that and just realize that cooperation and collaboration was key.

We both understand that. Our efforts are bringing value to the organization, and it's also important to keep in mind that we have different perspectives and those, those different perspectives. And having someone to bounce things off of helps add to, to the success of what we're doing.

Richard: And then, uh, Dana on the other side, obviously, uh, working with the risk management and insurance colleagues must be pretty important.

They obviously have a big say in the captive how it's run. How, how do you work with those guys? And then how do you, how do you define that relationship?

Dana: It's a true partnership. That's the most important part to me. As Christine said, we were fortunate enough that we had two colleagues before us that paved the way, um, that had that a similar relationship.

It's a balanced approach that allows us to come with our areas of expertise, but then look at the strengths of what risk has versus hr, which at the end of the day results in better outcomes. [00:05:00] We are very careful while we, we have differing opinions. Very rarely are they significantly different, but we make sure that we collaborate with each other, consult with each other, but are careful not to overstep those boundaries.

I'm not an underwriter by trade, so it's really important that when there are questions that that come up around the captive that I'm not equipped to answer that I'm not just assuming and know the answer. And I would say that Christine does the same as it comes to the global benefit strategy. As long as the two of us have been doing this together.

There are still questions that come up. So we make sure that if we're second guessing ourselves, that we do leverage each other's expertise and ensure that there's alignment. And I think at the, at Ultimate, at the end of the day, it would. It's what makes our colleagues trust us together. Sometimes, you know, they don't look at the captive as only risk or only hr.

They use the term captives very loosely, which is a good and a bad thing. But that just means that internally we're doing something right. If sometimes the lines are blurred as to who exactly [00:06:00] is responsible for what.

Richard:Obviously it's, uh, it's interesting 'cause you guys obviously somewhat, I dunno if you characterize it this way, but sit in the middle maybe between that link between HR and, and the risk management insurance team and, and the roles that you do, what, what do you think the, the main differences are in, in the, maybe the approach or the culture or the attitude towards employee benefits from that HR side?

From that risk management side may maybe, maybe bearing in mind that they might be listening to this podcast. When, when, when, when, after it comes out.

Christine: Yeah. So if I take the the risk side, we obviously are very number and contract focused. Yeah. So, so you know, my role is to think about what are the expected losses, what are the expenses?

How much premium do we need to collect? If exceptions are raised well, what exactly does the contract say? And then I guess I should let Dana. Talk about the HR view.

Dana: From an HR perspective, uh, we're looking at enhancing the employee experience. Obviously, uh, cost is important to us as well [00:07:00] because our HR colleagues that are in the regions, um, are pressured from the business as well to, to minimize cost.

Um, so, but we're again looking at that, but we wanna ensure that we're also meeting regulatory compliance that changes, um, in some countries more often than others. And that, you know, we're, we're offering benefits that are competitive and at the end, again, what we wanna do is create things that are flexible while maintaining the structure of the captive.

And part of that is because our workforce is so diverse. So even as we, we grow and expand the types of workers we have within Mers, we're constantly looking at if we're making those changes, how does that align with what's already in place with the captive, without making exceptions and so forth. We are also, while Christina's data driven, from her perspective, I am as well and sometimes we're, we're looking at the same information but with two different lenses.

And I think that's where. Together. We tend to work very well together if I don't say so much. So I, I just think [00:08:00] we both have a common objective at the end of the day, even though our roles are very different.

Richard: Yeah. Chris, it sounds, sounds like, um, as Daniel just said there, but the, the Mers team is, is particularly joined up and collaborative and sounds like they don't have too much of a problem in terms of making that work.

Well from a ZEVs perspective, do you sometimes have to act. Maybe in different circumstances as a mediator for companies who maybe don't have that joined up approach, uh, of the risk and HR and the benefits teams, especially when the strategy is to move the financing through to a captive strategy.

Chris Mason: Hundred percent. You know, it, it's really, really quite rare to actually, you know, have companies that have such a joined up approach like Maersk. Um, it, it certainly makes our lives a lot easier from, from a carrier perspective when it works like this. But you know, there's, there's a high percentage of the initial conversations we as Z jbs have is, is directly with risk and insurance managers.

So HR are not really even in, in the picture risk. And insurance managers have have that, that task of understanding their total cost of risk. So, you know, the CFOs go, what are we spending for all [00:09:00] insurance needs across our whole company? And, and when Now, more than ever, and I think, you know, the pandemic hit this is employee benefits is very much on their radar now as well.

So the risk and insurance manager is saying, okay, we need to know what we're spending on EB across the whole globe. Well, that's a lot easier said than done, you know, from a risk and insurance manager who, who quite frankly, they may not even know what they have in place. So we as a z jibs, we, we've gotta really help them.

Pull the jigsaw pieces together, understand who within the organization can really help to understand what you are purchasing, where you are purchasing it, and whether it's, you know, fit for purpose as well. So we, we sometimes do come in, we, you know, we, we sit down with the risk insurance manager and say, okay, who's your global head of hr?

We know who that is, right? Let's bring them in the room. Let's, let's start explaining what employee benefits is. Let's understand what they have, and then let's see whether we can then even start articulating what a captive is. And it's really quite interesting when you have HR procurement in the room.

See? Captive. [00:10:00] What's a captive? What can, how can that help? What's, how's that gonna help my employees? That doesn't make any real sense to me whatsoever. So we as ZEVs have to really go in partnership with the risk manager to say, okay, this is what it means. It's not to change the boat, but it's actually to, to really give you this, this overall global program.

And so it's small steps. But it does take time.

Richard: Yeah, absolutely. I can imagine that is, uh, getting that early engagement right. Explain the captives, explain the captive's role, talking the benefits and the HR language, I imagine is a, a big part of all of that. And, um, Christine and Dana, obviously after hearing your introductions, it does seem that defining the role seems to be key in order to have that efficient cooperate cooperation and, and collaboration.

How, how has that been done within Maersk?

Dana: I, I think sometimes it's, it's a little muddied. Again, as I, I stated earlier, the, the term captive is used very loosely. We've tried to emphasize is that Christine is looking at this truly as a risk perspective, and we're saying, although we collaborate together, we [00:11:00] want our stakeholders to understand that there are differences between what I'm responsible for and what Christine's responsible for.

And while we make collective decisions together, there are avenues that we have to take that are looking at the functions of our specific roles. The best thing that we've done is collaboration, that we've standardized procedures and frameworks that guide the management of employee benefits, um, from start to finish.

This is an ever evolving process that Christine and I, although it was good when we started, we're trying to take it to great and every year gets better, but we can't do that unless we have, I understand what her defined role is and vice versa. That allows us to. Remain effective, sustainable, and truly aligned as we we go through the process.

I believe that Christine and I understand that. The challenge oftentimes is not necessarily our HR stakeholders, but the larger business in general when they try to understand what a captive is, because they too are saying, what is a captive and what is the benefit of us being in a captive? I can get it cheaper if I [00:12:00] do it elsewhere.

Christine: Just building on that. Yeah, definitely. Clearly defining the roles and the process. Dana and I have done a lot of work on that and both in defining the process and the timelines and who is responsible for what step. In the process and, and even developing a tracking tool of, of where we are in the process.

And then once that's communicated, holding our local colleagues accountable to that, that that's probably been one of the bigger challenges and we're just, we're getting closer and closer each year to, um, having that really functioning smoothly. Everybody being all aligned and then understanding that, yeah, if you are late in giving your exposure details to your local partner, that's going to delay everything all the way down the line up until you not being able to timely get your renewal complete.

So, so, so [00:13:00] working on that has been, has been really important. I think another thing that's been important is that. Dana and I have a unified front, so we consult each other when we need to make a hard decision. We may debate it a little bit. I wouldn't say we really have big disagreements, but we may debate it a little bit and then, and then it's communicated.

And it's communicated as the position, and it's not open to someone coming back to me and arguing their case or someone going back to, to Dana and kind of like setting us against each other. I think that's also been really important.

Dana: I think the important thing too, when we talk about the relationship between risk and Maersk and what, or what makes Maersk so special in this area is I'm confident that if for some reason I'm not available, if I'm on leave, for example, Christine can make.

A decision that is truly an HR decision, and I'm confident in the decision that she makes. It might differ from maybe the approach I would've taken, but at [00:14:00] the end of the day, we have a common goal and I, I think Christine would say the same on my end. Very rarely do we have to do that, but if we ever get to that point, because we have built this relationship.

There's a comfort there that we're both, again, looking at that common goal when making decisions. Even the really tough decisions that we don't have one enough to make, tend to make half the exceptions come to me from a employee perspective. So what can we give one employee that may not be in the, in the current policy, and I go to Christine with the exception, not just do you agree with this, but from a risk perspective, if we were to do this, what would that look like?

Um, and you know, again, that commonality that, that we have is, as a general rule of thumb, we don't like exceptions because exceptions tend to lead to other issues further down the line. But again, that's where we have that comfort area. Of being able to speak for one another if we have to in that case.

Richard: And, and you both set out at the beginning about the, um, the objectives and what you wanted to achieve. How, how [00:15:00] has the use of the captive reached those objectives and kind of meet some of those objectives in the relatively short term?

Christine: Dana, you can probably speak to how we've definitely, it's definitely helped achieve some kind of global minimum benefit standards or have visibility.

To that.

Dana: Yes, it, it has, and I would say it's, well, first and foremost, we've said this repeatedly, but it's strengthened the collaboration between risk and hr, which is that way. And, and what I've shared previously is, you know, in other conversations we've had is that we realize that these relationships are rare and that it's not just the relationship between risk and hr, it's the relationship between the two people that are responsible that, that fosters this such, such strong collaboration.

I think the unified approach has helped us. Again, with the employee benefits and what that looks like at a global level, it allows us to remain steadfast to what we've set in place and hold again, those regional rewards managers and and stakeholders to, to the standards that we've set [00:16:00] forward. So by having the captive and having these defined objectives in place.

It doesn't allow them to steer or deviate too far from that. Do does the business try to pull them in a different direction? Absolutely. But by the two of us working together and continuously reeducating and showing the benefits of the captive, we have seen even over the last two years, a, a shift in the mindset for some people.

I don't think it'll ever go away, but I do think there's, there's an education. Of what this means and the long-term benefits of being in a captive versus the short-term gains if they were to do something a little different.

Christine: The other objective is also a big challenge, right? So the, the objective of paying the lowest possible cost over.

The long term, it is difficult to measure the, okay, well what would we have paid if we weren't in the captive? So that is, that is a challenge that we're continuing to [00:17:00] work on and try to develop, you know, to, to move away from the conceptual concept of this is better over time, which I, I think anybody in the insurance market can agree to, to the, okay, here's some hard numbers of what it would've looked like.

If, if we had maintained an individual local policing approach.

Richard: Yeah. Really interesting. I guess that that, that that kind of proof of concept in the hard numbers is, is point the holy grail for a lot of companies to be able to prove that. Yes. And show that over time

Christine: and a little bit easier on the p and c side with, with global programs where you can occasionally.

Benchmark. Um, it's, it's more difficult to benchmark in this space, particularly where there's a lot of very competitive markets where local insurers are willing to write at a loss. In the first year,

Richard: we, we haven't really talked much about those external stakeholders or, or other internal stakeholders such as maybe procurement on the external side, uh, brokers, the insurers and network partners can The role of those people, [00:18:00] those organizations sometimes have an influence on that, on that hr.

Risk management corporation or, or get in the way or po poison it? Like what can, what, what are some of the dangers there or, or some of the ways that they can help?

Dana: I'm not gonna talk about internal, from a procurement standpoint, it's more from a finance perspective where, again, they're looking at the bottom line and as, as Christine said, we do know that they can go someplace locally for that first year and, and operate on a loss.

And, and sometimes again, that's looking at the short term versus the long term. Where I think others influence us is our brokers. We have a global broker record. We rely heavily on them to understand what they're seeing in the market as well, that help us influence our decisions. They provide data points that we may not necessarily have, and they also, as we have built these timelines and the roles and responsibilities, they truly have roles and responsibilities as well within that timeline.

So it's their collaboration with us that has helped us build what we have [00:19:00] today. Um, and that goes all the way down to the network. Insurers so such as Zurich, we, we understand, um, that they have a stake in this as well. And if we don't all cooperate with each other. If one piece of that pie kind of jumps out, it does have a trickle down effect, and I think that's the most important thing.

When we start looking at external stakeholders, again, they have to understand the work use of MAs and what, what we're looking for versus perhaps some other clients. But then on the flip side, we wanna know what other, what other customers and clients are doing so that we can continuously improve. At Maersk.

Christine: Yeah, and my thoughts on that are if the relationship is good, then I think some of the challenges of other stakeholders can create an alliance between HR and risk in that, you know, there's, there's a common enemy or frustration and you want to create a unified front to, to kind of hold some of that down, hold some of that noise down.

Richard: I mean, uh, moving on, Chris, to kind of your relationship working with a [00:20:00] captive such as Maersk. I'm aware that Zurich on the, on the PNC side already have quite a long established, uh, relationship with Maersk and, and its captive. Is is maybe working with, um, a client that already has that established, not just established captive in place, but established Zurich captive relationship in place.

Does that kind of strengthen the, the proposition when you're, when you're working with them? And is Maersk a kind of a good example of that?

Chris Mason: Absolutely massively, you know, Zurich Zu X really, we, we pride ourselves in being able to offer that one Zurich approach. Being able to offer large corporate clients like Maersk, an all encompassing one package so that, that, that multi-year, multi-line, cross class deal with, especially when captive is involved.

So providing that cross class aggregate that sits across all lines of business. It really does, and I hate saying it, but it makes the relationship even more sticky. But it, it, it really does help providing that overall, um, kind of that value proposition to, to that client like Maersk Zu Zurich. We do rely quite heavily with regards to our commercial insurance colleagues to a degree being [00:21:00] able to.

Speak to clients on a direct basis, and being able to do that really helps because we can really understand what their overall global strategy is. What can Z Jibs do in order to help with that, especially on their EB side, when a captive is already in place, you know, the re reassurance agreements, all the wording, all of the legal pieces has already been done, so you can just add another agreement on top of that, and it doesn't take months in order to sort that out.

And that's, that's a real bonus 'cause that that can take some time. The other element I would also say is, and it kind of does go a little bit back on, on on Dana's comment earlier, is in respective, when we do talk to customers that already have a commercial insurance relationship, we can then say to them, look, we can provide you with this, you know, all encompassing global solution for employee benefits.

Sign up with Z gib so we can, we can move forward with that. So it actually saves the customer money 'cause they don't have to go through to the overall. RFP process. So it, it saves that, that cost. Um, now I'm not, you know, we make sure that we're very clever and, and make sure that we're very clear. We [00:22:00] don't provide customers direct advice when we're doing it on a direct basis.

That advice is. It's key. We don't do that, we're an insurer, but what we will do is, is work very much collaboratively with them to ensure the solution they need is, is provided by Z gips. So, um, yeah, Maersk is a clear example of this. You know, it's been a Zurich customer for many, many a year. In my prior roles at Zurich, I, I dealt with Maersk, uh, for.

At least over 10, 15 years now. So, um, it's great to continue being able to continue the relationship that we've got.

Richard: Well, just to finish off then, I mean, just to maybe sum up your thoughts on this kind of HR risk collaboration, what, why is it then, if you could each sum up, why is it so important to have both that HR and risk teams on the same understanding when building that employee benefits captive program?

Christine: I think simply it's because we can't do it without each other. Without the cooperation, risk could develop this great network and structure, but if we don't have the buy-in and the support from the HR teams, then no one's [00:23:00] going to use it.

Dana: I would 100% agree those are exactly the words I would say. But on the flip side, HR could have a great benefits strategy, but without having the risk element and saying: 'Did you think about this? Or what key elements could be missed?' We would lose the efficacy of the programme. I will say I do not think captive is effective, or at least as effective as Maersk, unless you have complete collaboration between both risk and HR.

And I'm glad that we're unique in this, in this space because again, I can't imagine having to manage this without having a trusted colleague in risk. And I think they would probably say the same.

Christine: Yeah. I think, I think it would've failed by now if we didn't have this approach.

Chris Mason: Yeah. Uh, you know, just, just to add my, my piece on that, I think, you know, it is to ensure that everyone is aware of the overall global strategy.

So if everyone is aware and all pulling into the same direction, like, like Christine and Dana, like Maersk as an organisation [00:24:00] then it just makes the transition, it makes the process, it makes the implementation as smooth and as proactive as it has been. And once that's in place. It, it's brilliant. It works really, really well.

It's, uh, as we know, it's, it's very unique and, and you know, Dana touched on it, so did Christine earlier. It is a unique situation where you have such a collaborative approach, but once it's, you have it in place, it works brilliantly.

Christine: Yeah, and I think, Chris, you just touched on something that many people were interested at when we spoke in Chicago about, so it's not only our collaboration, we also need the support of the organization.

And, and we have what are called commit rules, which set the corporate strategy and, and you know, are kind of the directive that when our local colleagues are saying, we don't wanna do it this way, we can pull it out and say, as per the corporate strategy, you must do it this way. Um, and, and that is also a key reason for, for our, our [00:25:00] success.

Richard: Great. I think that's a really good, really strong. Way to end as well, Christine. So thank you, uh, Christine, Dana, and Chris for coming on and sharing the, uh, the Maersk EB captive story. Thank you.

Christine: Thank you. Thank you.