October 20, 2019

Outsourced Underwriting Services

GMG Underwriting, LLC provides outsourced underwriting services for insurance companies which wish to offer one or more of our international specialty insurances to their insureds. 

Outsource Underwriting Models and Process

  • Private label MGU/Program Administrator
  • Reinsurance

Private Label MGU/Program Administrator

  • Insurer contact refers inquiry to GMGU
  • Risk clearance process with program carrier (not to compete with itself)
  • GMGU obtains application, underwrites, and releases quote to Insurer contact
  • Insurer sends GMGU quote to insured with insurer’s own domestic quote or separately
  • GMGU binds, issues and collects premium from broker
  • Commission allowed by GMGU to retail broker
  • Program carrier handles claims within its existing arrangements for assistance, response and adjusting

Reinsurance Model

  • Underwriting guide for delegated authority to insurer
  • Referrals to GMGU as manager for reinsurer
  • Risk clearance process with reinsurer (not to compete with itself)
  • GMGU provides training to develop Insurer staff expertise
  • Policy issuance:Support Insurer premium booking capabilities
    • - Use forms of the reinsurer or agreed with the reinsurer, with Insurer form numbers
    • - GMGU has developed its own forms as an option
    • - Use eGMGU rate and issue software or 
    • - Adapt Insurer applications
  • Bordereau reporting to reinsurer
  • Claims coordination

eGMGU Rating Tool

• Standard Model Components

  • Base Rates for each Line of Business
  • Occupancy (SIC) weighting
  • Factors:  Sales, Number of Trips and Travelers, Where to, How Long, Rental Car Days 
  • Country risk guide 
  • IRPM factor included in rating model

Develop Insurer Expertise

GMGU and program carrier or reinsurer will work together as appropriate to: 

  • Provide training of any group of employees that needs to learn about international
  • Advise on available resources for country and coverage information 
  • Conduct marketing activities for producers as an Insurer service 
  • Provide CE training for producers (and licensed employees) 
  • Develop rate, issue, book applications and train employees in use 
  • Provide access to assistance, response and adjuster resources for training and/or marketing 
  • Arrange local policies (outside U.S.) for Insurer insureds needing this service 
  • Provide administrative support as needed

Claims Handling

  • Insureds receive claim reporting directions with policyMost Foreign Package claims are FVWC/BTA handled up front by assistance vendor
    • - assistance, 
    • - response,
    • - general claims
  • Kidnaps are handled by responder
  • Several adjusting firms are under contract to reinsurer or program carrier 
  • Reinsurer or program carrier acts as TPA for Insurer

A Typical Claim (FVWC/BTA)

  •  Salesperson traveling in Germany gets hurt
  • Call made to assistance vendor by individual, broker or insured
  • Assistance vendor confirms coverage 
    • - monthly list of insureds inforce, 
    • - may also contact program carrier, insurer and/or GMGU

Assistance vendor arranges as needed

- Referral to local hospital 

  • Guarantee or even payment of medical expenses if needed 
  • Evacuation if medically necessary 
  • Medical and Evacuation are usually reimbursed
  • usually by reinsurer or program carrier; possibly health carrier 
  • Information flow 
    • - Assistance vendor provides data to insurer claims staff to set up and monitor case 
    • - Reinsurer Claims advises Insurer Claims 
    • - Insurer Claims monitors, sets reserve, pays, and reports on bordereau to program carrier

Typical GL Claim

  • Product allegedly causes injury in Spain
  • Spanish claimant contacts insured in U.S. directly or through local distributor 
  • Insured or broker notifies Insurer of claim 
  • Insurer notifies program carrier of claim 
  • Program carrier engages local adjuster affiliate of international adjusting firm 
  • Local adjuster investigates and may  appoint and manage local counsel with program carrier claims manager 
  • Program carrier advises Insurer of recommended reserves to post and recommended payments to make; provides documentation; Insurer Claims kept apprised of claim status 
  • Insurer pays;  reserve change and payment reported on bordereau to reinsurer

Contractual Structure

  •  Reinsurance Agreement
    • - Insurer/program carrier 
    • - GMGU as intermediary 
  • Other Agreements NeededContracted supporting services provided by program carrier 
    • - Insurer/GMGU PA Agreement 
    • - Claims Service Agreement/TPA between Insurer and program carrier?
  • General claims services as TPA or under reinsurance agreement 
  • Travel Assistance (Call Center, Medical Evacuation, Security Evacuation) 
  • Crisis Response (Kidnap, Disappearance)

Why International Insurance is so important to U.S. insurers:

It is all about the domestic premium.   

$1 of international premium supports $10 - $15 of domestic premium for the same insured and 
You do not leave a coverage gap for your competitor to fill.

GMG Underwriters also offer extensive Consulting Services