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Why Pooling?
Typical situation of Employer without Multinational Pooling

Various contracts in different countries exclusively driven by local market forces were minimum premium regulations could apply and sometimes high brokerage fees are charged

No economies of scale possible because of lack of global purchasing power

Positive margins, if any, fully retained by local Insurers

No coordination and consequent lack of global overview of Benefits

Delay in obtaining, at corporate level, information about changes in local insurance regulations

Pooling
What is a pool?
Simple Definition
Combining …
…a multinational company’s …
…employee benefit insurance contracts …
…in various countries …
…into a ‘pool’ …
…for the purposes of having the client participating to the contracts’ experience
Multinational Pooling arrangement: an old concept

Widely used in the International Market for more than 35 years

Success factor of the idea: control & cost savings

The Pool idea is simple:
Local established group insurance contracts..
..are combined in one overall agreement..
..to allow a large enough spread of risk..
..justifying international experience-rating 

What is international experience rating?
an accounting system used by insurance companies to allow the Client Employer to participate directly in the experience of its own Employee Benefit plans implemented on global basis

Multinational Pooling arrangement: the way it works

Local Client
Germany
Local Client
France
Local Client
Italy
Local Client
Canada
Generali
France
Generali
Italy
Partner Insurer
Generali
Germany
Dividend
Information
Service

Head Office
Client
G.E.B.
Brussels
Local Qualified Schemes
Multinational pooling
Let’s see how it works...
Local Picture - Spain
Local Picture - UK
Local Picture - Two Countries Combined (All figures in US$)
Pooling Approach(All figures in US$)
... a new country is stepping in...
…and now…
Deficit in France
... things get worse...
Deficit in France and in Pool

GWG & GPP: different products, different rules
Negative balance Our standard rules

Are losses carried forward? 
G.W.G.    YES

G.P.P.    NO
Loss Carried Forward system (LCF)
In a given year:

If overall financial result is positive

a dividend is paid (GAP system)

If overall result is negative

the resulting loss will be carried forward 
Positive balance Our standard rules
G.P.P.: 30% of final refund paid  back to the client.

G.W.G.:  GAP system (what the… ehm is that!)                
The GAP system
GOALS
Stabilisation of the results
Virtual contingency fund
Protection of financial situation of the account

The GAP system
GOALS
Stabilisation of the results
Virtual contingency fund
Protection of financial situation of the account

GAP ... the making of...