Effects of Introduction

The disadvantages that arise from making individual insurance arrangements can be eliminated by introducing a global program. In terms of cost, it is possible to perform centralized negotiations that take advantage of economies of scale and to reduce insurance premiums through innovations to cut technical costs such as having a shared limits of liability for the group as a whole. In addition, having a single contact for negotiations substantially reduces the effort and time needed for insurance arrangements by the group as a whole.

It is possible to eliminate duplicative coverage and omissions in coverage by having coverage details and limits of liability specified by uniform standards apply to all overseas operations subject to the global program. In addition, it is easy to ascertain the details of coverage, and selecting a single insurer and a single agent or broker facilitates timely sharing of information on risks and centralized management of risks.