Nedlloyd outsources 24-hour accident cover

Nedlloyd, the Rotterdam-based Dutch transport group with around 16,000 employees worldwide, has an outsourced insurance policy solely for its accident cover, with death insurance included in the company's pension funding arrangements.

The policy is operated through the New Rotterdam company, part of UAP, but previously a part of Nedlloyd itself, explaining the company's lengthy relationship with the insurer.

Coverage for permanent disability comes out at twice yearly income plus a continuation of salary for life.

However, until seven years ago the company was covering the risk in-house, but was obliged after a change in Dutch labour regulations to outsource the policy.

Harye Fransen, head of labour issues at Nedlloyd, explains: Our previous cover was for working hours only, but due to the nature of the transport business the authorities introduced tighter rstrictions on working conditions, one of which was the need to cover personal circumstances. For such 24-hour cover we felt it necessary to go to an insurance group to avoid being overly exposed to our employees' personal lives."

Fransen says that despite some negociation problems from time to time with the insurer on issues such as accident liability and payment, some of which have lasted for several years, the relationship is generally open and flexible.

"Generally these issues get ironed out because we have such a lengthy history with New Rotterdam. The rates on offer are also very competitive as a result of this tie," he adds.

But Fransen does not rule out the possibility that Nedlloyd will cast its eyes over the Dutchborder for insurance provision in the years following euro convergence. "Obviously we will be looking for the best deal and our broker is Aon, so with its global reach I'm sure it will be advising us on choice and cost matters within what appears to be shaping up as a more competitive European insurance sector," he says.

Aon, he adds, also verifies the capital and risk of the insurer for safety before any arrangement is put in place. Nevertheless, he senses there may be some practical difficulties in Dutch companies using foreign insurers for fiscal reasons, citing problems with policies linked to income as potential stumbling block.

"On the whole though I'm not sure if premiums will get any lower despite the competition,because there is only so much you can receive for a certain fee and I think the market has already reached its critical level. What will change is that we will look for greater experience and value for money as opposed to merely comparing the in-house cost to that of externalising," Fransen says."

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