Staying in or going out?

Rank Xerox, the UK IT corporation, has a very limited life insurance cover for 'stop loss' catastrophe protection with Swiss Life, in cases of peak insurance risk such as chartering a plane for company employees.

The remaining issues of incapacity/ death insurance are all carried by the company, with decisions on insurance for Rank Xerox's European provisions completely decentralised from the corporate to the local level.

Malcolm Oliver, Rank Xerox group risk manager, says he is happy with the overall arrangement with Swiss Life, but concedes he is uncertain as to how competitive the policy is.

The problem we have here is that we only receive a very limited amount of underwriting data from our pensions side and this deterr-ed a lot of insurance companies from putting in a tender for the bus-iness. But then again I don't really think there's a lot of competition in the stop loss market," he says.

Oliver says the company has considered amalgamating this policy into the rest of the group's self-insured cover through the pension fund, but believes it is more reasonable to continue with the relatively cheap life policy than to expect pensioners to foot the bill in the event of a plane crash.

The advent of the euro and a possible European insurance sector, he says, will have very little effect on the current position.

"Our tender process was already open to foreign bids and indeed we chose to liaise with a Swiss insurer, so I think things are fairly free and open now and don't see the sector developing significantly," he notes.

The Worcester-based UK headquarters of Group 4, the security group, also runs its life cover through Swiss Life, running this in tandem with the company policy of providing life insurance with its pension arrangements.

Martin Winwood, pension and employee benefits controller at Group 4, explains: "We have five separate pension plans to meet the different needs of our employees - one of which has life insurance built-in, and the others where life insurance is separate and not dependent on scheme membership."

All cover is based on position and salary and Winwood says he is pleased with the quality of the insurance service provided, adding that the rates charged are also very competitive by virtue of the longstanding relationship the company has had with the insurer.

"One particular plus is their flexibility. For example, we may win a large contract and have to take on a lot of new staff very quickly, as often happens in this industry; indeed it has been known for us to take on 300 in one day. Swiss Life put them on to the insurance policy without hesitation nor wrangling, which is the simple, open kind of service we require," he points out.

The company addresses questions of the feasibility of self or mixed insurance liability with brokers Heath Consulting on an annual basis, and Winwood says the company will look at the possible prospects of greater choice and lower fees in the post euro insurance market in the same manner.

"At the moment though, totally outsourced insurance cover suits us, but we will take appropriate action for any future necessities. Any insurance advantages arising from Emu will also be looked at, and personally I feel the competition in the market will get tougher as a result of the euro," he adds."

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