Sarah Vodopianoff in Congreso Internacional del estado del bienestar en Madrid, 27 de septiembre.
Sarah is the Global Head of Information at Axco Insurance Information Services, responsible for over 170 countries and specialising in life, health and employee benefits.
COI. Regarding your participation at the Congreso Internacional Estado del Bienestar 2107 (International Congress Welfare State), could you please tell us the main activities are driving by Axco Insurance Information Services?
SV. A major characteristic of life in the 21st century is increasing complexity, and this is as true for businesses dealing with supply chains, sales strategies and employee obligations, as it is of personal lives affected by increasing life expectancy, iPhones putting more power than ever in our hands, and driverless cars. The pace of connectivity and technological change that is driving this phenomenon had resulted in a major rise in regulation as government’s grapple to adjust to new realities. We at Axco are embracing the new opportunities that come with this dynamic environment.
With increasing complexity comes uncertainty and an increase in risk which in turn creates a growing need for information, analysis and clarity.
Axco is an information provider to the global risk, insurance and employee benefits industries, delivering comprehensive intelligence and data sets on a country-by-country basis for more than 50 years, to a variety of industry stake holders including businesses, governments, universities and multilateral institutions.
COI. What are the main challenges, changes and opportunities that pensions and Insurance Industry will face within in the next years?
SV. Given falling birth rates, higher life expectancy, low interest rates and political pushback against immigration, at least in developed markets, it is becoming harder for the state to provide an adequate level of income replacement for the retiring population. Governments have reacted in similar ways across the board: increasing the state retirement age, reducing the value of state pensions and encouraging later retirement. In some cases, second pillar pension plans have been abolished and the funds have been moved to the first pillar to boost state pension funds – a courageous political move, but one forced on them by these new realities. In other cases, governments are encouraging the second pillar or have even made the second pillar mandatory as in the UK.
As the level of benefits provided by the state is gradually falling, the shortfall is slowly but inexorably being passed to employers and employees. The pensions and insurance industry will need to offer creative solutions beyond the old defined contribution and defined benefit options; solutions that are flexible, trusted and valued by end users at a time of increasing complexity and falling confidence in the marketplace.
COI. Can you tell us how does work International Employee Benefits?
SV. International employee benefits come in a variety of guises via a selection of structures, each providing for the different circumstances and structures depending on your business. Generally, an employer can provide international employee benefits through a mixture of multinational pooling, home-county style benefit plans or a global benefit plan. Each of these structures can be blended according to need and dependent upon provider availability.
A small number of multinational pools cover a variety of geographical locations and risks. Essentially, this kind of risk pooling enables multinational companies to provide a variety of insured employee benefits in a way the offsets the insurance risk of different locations and, likewise, offsets premiums attributed to different locations. Multinational pooling enables multinational companies to cover local and expatriated employees alike.
Global benefit plans are offered by multinational companies to provide a level of benefits that satisfies the local legislative requirements and employee needs of all countries in which the multinational company does business. A global benefit plan might well involve multinational pooling as an instrument to adequately cover and appropriately finance such a plan.
Home-country style benefits are primarily adopted for expatriates and aim to provide seamless benefits in the employee’s home country, regardless of where work assignments might send them.