The Framework Agreement: “smart” insurance

What if insuring your business became child’s play, and taking out an insurance policy was just a matter of a few clicks? Utopia? Not at all. The dream becomes reality with a framework agreement. Here’s how:
Our starting point is that we can see that companies in the same business sector regularly have to deal with similar risks, and therefore have very similar, if not identical, insurance requirements. For both the insurance broker and the direct insurer, a similar contract will be offered on equivalent terms and rates. In this context, we tried to find a simpler, more agile solution. How would be do that? By using a framework agreement.

A proactive approach 

With a framework agreement, the approach taken is the opposite of what is usually done. For “simple” or “standard” risks, a model agreement will be proactively negotiated with an insurance company for a group of companies with the same activity. In order to achieve this, we proceed according to our usual methodology. First, the specific and less specific coverage requirements of the relevant group of companies are identified, on the basis of which specifications (type of cover, guarantees etc.) are drawn up. This document will also set out a certain number of eligibility criteria for companies (turnover, size, claim history, etc.). A call for tenders to insurers will be then be issued on the basis of these specifications.

The terms include a requirement for the retained insurer to agree to the broker handling the risk underwriting process on its behalf. Once this framework agreement has been signed with the insurer, any company that meets the criteria may take out an insurance directly with their broker, in record time and without having to wait for the insurer’s acceptance. The broker will have full responsibility for the administrative management of the agreement.

An efficient and cost-effective solution

In addition to facilitating the procedure for taking out a policy and saving time, a framework agreement provides many other advantages that are no less important.

1.    Cost savings: Preferential rates are possible with a framework contract thanks to risk pooling and the effect of volume. It achieves true economies of scale.

2.    Better coverage, lower excess: As the coverage and guarantees will have been negotiated in a centralised manner upstream, a framework agreement generally offers more favourable terms than an individual contract negotiated on clause-by-clause basis. N.B.: it is important not to confuse “framework agreement” and “framework conditions”. The latter only offer premium discounts, without necessarily providing better terms of coverage.

3.    Simplified administrative management: A single contract managed directly by the broker means easier management. In addition, the Qualibroker-Swiss Risk & Care Group is developing digital solutions for in-house contract management, administrative follow-up etc.

4.    Flexible customised agreements: A framework agreement may be designed to fit the specific requirements of the insured group. Various coverage options and levels of protection may be included to allow a certain degree of customisation for eligible companies.


A wide range of framework agreements 

There are framework agreements for all types of insurance, and they can be set up for a wide range of activities. In Switzerland, however, this type of mandate is still rarely used.

At Qualibroker-Swiss Risk & Care, we firmly believe that this solution should be developed further. We already offer it with Building Insurance for property owners (private individuals, corporate and institutional entities) and for Construction Work and Project Manager’s Civil Liability (TC-RCMO) insurance. We have also set up several framework agreements for the healthcare sector, covering their requirements for Civil liability, D&O fraud, legal protection and motor vehicle fleet insurance. A framework agreement is also available for self-employed professionals and their associates, which offers many benefits including particularly advantageous maternity allowances. We intend to go further and will shortly be launching a special offer of insurance policies (personal/life/non-life) for SMEs.

There are still plenty of possibilities…

A Department for Innovation

The Qualibroker-Swiss Risk & Care Group has just created the Products and Innovation Department which you are in charge of. Why was this department created?

Our group is currently a major player in the market, and a leader in a certain number of business sectors and lines of insurance. We have the means, and the ambition, to go beyond our usual activity and existing schemes to create innovative solutions for our clients. This is a legitimate expectation of a leading broker like us. This will mean developing new offers of services, setting up new processes and tools, and rolling out of products that are still scarce in Switzerland.

How will you proceed?

We will be working on three main themes: the in-house teams, the insurers and the various skill sets already present within the Diot-Siaci Group, our parent company. First of all regarding in- house teams, as a former Client Manager, I know just how finely tuned they are to the needs and requests of clients. Our aim will therefore be to use this source of information for innovation and thereby better respond to the expectations of policyholders.

Secondly, insurance companies are our main partners with whom we must coordinate our sales strategies, and keep a constant watch on the offers available on the market. We would also like to set up simplified distribution channels. The use of framework agreements is a step in this direction. Lastly, we are fortunate enough to have the support of one of Europe’s leading brokers, the Diot-Siaci Group. They offer services, resources and expertise offered by no other broker in Switzerland. This gives us a wide range of opportunities for development.

Would you have any examples to date?

We are not short of ideas! I won’t comment on a certain number of projects as they are obviously confidential, but it we take the example of framework agreements, we plan to extend this solution to other lines of insurance and new categories of policyholder. We would also like to strengthen our position in the Property and Objects insurance market. So there will be more to talk about in the future.
Swiss Risk & Care - Etienne Verret
Etienne Verret, Head of the Product and Innovation Department

This article was published in Insurance Inside n°34 - June 2024. 
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