JKJ: Let’s Make the World a Smaller Place
For global organizations, the management of risk is constantly evolving. Assessing risk cannot be compartmentalized to the standards and norms of the parent company’s country laws, regulations, operations, and litigious environment. JKJ’s risk assessment factors in many entities, countries, governing bodies, and exposures. We work with global organizations around the world on the avoidance, prevention, retention, and transfer of risk when the business is managing risk in conjunction with their US domiciled entity through commercial insurance programs and risk prevention practices.
JKJ’s model to service client locations across the country from a centralized location is an important attribute of our international business model. We have the licenses required in all 50 states for admitted and non-admitted placements, but also, our team is able to be at client locations regardless of where the location may be. This model allows us the flexibility to service subsidiary locations anywhere in the country and focus on developing a high level of competency with a centrally located team. We travel frequently outside the US to meet with executive management teams, risk managers, or ownership of foreign parent companies as part of the global interaction. A primary factor to perpetuate this model is our commitment to remaining independent. By remaining private and independently owned, we can focus on driving resources back to the benefit of our clients rather than outside stakeholders.
We focus on four primary areas for our international clients which are: Communication, Culture, Coordination, and Compliance.
Through our prior experiences in international transactions we find there is a significant opportunity of creating value to parent and subsidiary companies by beginning with the understanding of the differences in culture and customs of transacting business in each country. Addressing these differences with an integrated solution can be cost effective and coverage efficient for our clients.
Communication
We focus on transparency for all parties including local management, foreign brokers, executive headquartered management teams, etc. This enables us to properly understand all elements of a risk profile and equipping the global group to make sound business decisions. Transparency is key; ambiguity and vague interpretations lead to miscommunication and ill-informed business decisions.
Managing risk globally must be a collaborative effort and requires answering tough questions which often go unasked. This lends to our philosophy that in person meetings are vital. This leads our team to traveling the world for meetings with company headquarter and subsidiary locations.
Traditional solutions for multi-jurisdictional locations have been to find a broker in each respective country who can countersign the local policies and provide very basic insurance services, but generally, international networks still focus on “dots on the map” rather than a rigorous analysis of organizational attributes of the broker partners.
Culture
We have committed time and resources to better understanding other cultures which attribute to our clients’ perspectives and needs. Through our experience we understand and respect how people from other cultural backgrounds relate to issues in unique ways. Not only is there an intentional internal study to cultural disconnect, but through decades of frequent international travel we better understand differing cultural norms compared to most American service providers.
Understanding the impact of cultural disconnects can be disastrous in structuring international insurance programs if not considered properly. We recognize that Americans do not think, behave, or process information the same as people in different countries and adapt as best as we can to those varying perspectives.
Coordination
The result of poor communication creates misunderstanding relative to coordinating respective risk management programs in each country. The effective outcome is often gaps in coverage, and the mistaken assumption the terms and conditions provided are “best local standards” automatically provided in all countries. This is aggravated by the fact insurance companies at times refuse to provide translations of local policies in both languages, leading to confusion on the intent of coverage a client was looking to obtain.
Respective regulations and legal requirements are often misunderstood, and they continue to become more complicated in this period of government oversight.
In addition, there can be disconnects as a result of currency exchange rates relative to coordinating retentions and limits of coverage and insurance premium taxes are rarely coordinated appropriately with each subsidiary’s country.
Coordinating insurance programs in and of itself is complex, and to most appropriately leverage the scale of the global organization must be completed with professionals who have a global enterprise risk management approach which optimizes scope of coverage and cost efficiencies.
Compliance
Compliance is quickly becoming a major issue in cross border transactions. Issues are centered on tax obligations, revenue recognition, data protection, and appropriate allocation of expenses. Several cases in the EU and in the USA underscore new compliance standards for both insurers and policyholders relative to allocation of premiums and payment of the current VAT or premium taxes. There are also the accounting issues relative to payment of a claim in one country for a loss that occurred in another country.
Furthermore, evolving data breach laws, regulation, and litigation is forcing a proactive approach on prevention and transferring this risk through insurance.
Duplicate insurance coverage in each country with operations can be a significant problem in the event of a claim with coverage provided by the insurance program in another country. This creates problems in arranging defense and determining which insurance program is the primary insurer. Duplicate coverage is problematic for effective protection against risk for the international organization.
Industry Focus
Although there is a broad scope of industries served within JKJ’s international practice, below are some of the higher concentration areas in which our clients’ businesses are classified. At JKJ we are most effective when our clients are fully engaged with all divisions of our JKJ team, including claims management experts, risk engineers, internal account managers, representatives, and JKJ’s online portals.
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- Manufacturers
- Advanced Manufacturing
- Food
- Distribution & Wholesale
- Retail
- Technology
- Professional Sports
- Life Sciences
JKJ Service Approach
Some elements of risk management and insurance are specific to US operations and entities. JKJ works hard to best integrate solutions into a global approach for multinational client organizations. The client has an important role including employee retention, reducing operational risk, premium cost mitigation, and the business perpetuation.
As an independent, employee owned company we are focused on driving value back to our clients. JKJ’s international team, although specialized in handling multinational organizations, integrates directly with the staff and services of our successful JKJ model.
- Risk Engineering – JKJ’s risk engineers interface with our clients’ safety initiatives for our clients to reduce independent consultant costs by navigating the complexities of OSHA regulations, and implementing preventative programs to control the total cost of occupational injury risks.
- Claims Management – JKJ’s claims consultants act as a client advocate to insurers who are going through claims. We help with coverage analysis, open reserve analysis, and the management throughout the life of a claim with our insurer partners.
- Contractual Risk Transfer – a primary form of risk management in the US is through contracts. We actively participate with clients’ internal and outside legal teams to transfer and limit risk by way of contracts.
Bruce F. White, CPCU
Vice President Insurance Services
Johnson, Kendall and Johnson, Inc.
109 Pheasant Run
Newtown, Pa 18940
Phone: 215-968-4741
