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Article | Global News Briefs

Global: AIG to close its employee benefits multinational pooling network

Health and Benefits|Future of Work|Integrated Wellbeing

By Mark Cook and Paul McNiff | June 19, 2020

AIG is closing its Global Benefits Network and will stop multinational pooling services for insured employee benefits from January 1, 2021.

Employer Action Code: Act

The AIG insurance company has announced that it will be closing its Global Benefits Network, through which it has provided multinational pooling services for insured employee benefits of multinational companies. By way of background, a multinational pooling arrangement with a global insurance network allows companies to combine, from a financing perspective, certain parts of their insured employee benefit plans across countries with the aim of realizing cost efficiencies.

Key details

AIG has stated that:

  • Its Global Benefits Network contracts will generally cease to be pooled from January 1, 2021. Some contracts, for practical reasons, may remain pooled through March 2021.
  • Final pooling reports will be issued by AIG in 2021 for the 2020 calendar year. Any deficit or surplus will be calculated per the individual pooling contract.
  • Most contracts from January 1, 2021, will be locally insured with the AIG insurance carrier in that country.

Employer implications

To be clear, AIG will continue to operate as an insurance company providing local insurance that can stay in place even if the pooling contracts stop.

Global considerations for affected employers:

  • Understand whether you have any pooling dividends to be paid on or deficits to repay.
  • Consider alternative pooling options with other networks.
  • Understand whether you need to pay stop (full, partial) loss charges for the final 2020 account.
  • Understand whether you are in the middle of a multi-year rating period, and what the implications of that would be.
  • Determine whether this affects any other non-pooled benefits and any general or property and casualty insurances with AIG.

Local considerations for affected employers:

  • Understand which local pooled contracts will no longer produce dividends as of January 1, 2021 and which projected margins are impacted.
  • Determine how the carried-forward deficit will be treated on a local level.
  • Understand whether the local insurer can convert the program to a local profit-sharing basis, and how this is decided.
  • Invite other insurers to quote ahead of the next renewal if there are pooling options available with the other networks.

AIG Statement

After careful analysis and consideration, AIG has realigned its strategy with regard to AIG’s Global Benefits Network business and as a consequence, AIG Global Benefits Network (GBN) has decided to wind down its activities. Each pooling client will be notified by GBN’s lead insurer, Nationale Nederlanden, before the end of September 2020 that 2020 will be the last accounting year for their respective pool under their Pooling Agreement and that they may expect the last pooling reports to be provided in early 2021.

We understand that the discontinuance of each pooling client’s Pooling Agreement by Nationale Nederlanden will not affect the terms and conditions of the underlying policies or contracts that are pooled as part of their respective Pooling Agreement. This decision to wind down GBN will not affect AIG Multinational’s general insurance business, as AIG remains committed to supporting its broad general insurance offerings through existing operations.

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