Specialty Benefits and Opportunities in the Foreign Nationals Market
Foreign Nationals Market, international flags
© Munich American Reassurance Company
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    February 2020

    Foreign Nationals is a growing market for specialty benefits carriers due to the rapid increase in U.S. assets held by global investors and the growth of the foreign executive base. As carriers look to capture opportunities in the Foreign Nationals market, they seek the support of reinsurers for risk transfer and advisory expertise in navigating the unique risks associated with the market.  

    According to recent studies, employers are increasingly seeking ways to attract and retain top performers. In fact, over half of employers who offer non-qualified retirement programs said it was “critical” or “very important” in retaining executive level talent. 1 In addition, employers are shifting compensation investments to higher performers widening the gaps between highest and lowest performers.1 Life insurance is now commonly used by companies as part of their specialty benefits programs to attract and retain high-performing talent and to protect companies from the loss of key leaders by providing cash for succession planning and business obligations.

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    Reinsurers can assist direct writers of Foreign Nationals insurance in a number of ways, from capacity to underwriting expertise to claims management.

    There are a number of external factors currently impacting the specialty benefits market eliciting near-term action from life insurance direct carriers including limited use of long-term incentive plans, favorable tax regulation, expanding asset footprint among global investors, and a rapid increase in the foreign executive base.

    The growing Foreign Nationals market presents unique challenges for direct writers. Foreign Nationals offerings create additional risk exposure, and carriers often seek the support of reinsurers for risk transfer and advisory expertise in navigating risks. Reinsurers can assist direct writers in a variety of areas, from capacity to underwriting expertise to claims management.

     

    References
    1. “Compensation, Retirement and Benefits Trends Report Executive Summary”, 2018-2019 Edition, Newport Group, https://www.newportgroup.com/newportgroup/media/documents/c202f-113018-2018-2019-edition-compensation-retirement-and-benefits-trends-executive-summary.pdf (November, 2018)
    Contact the Authors
    Wen-Mei Chu, FSA, MAAA
    AVP & Actuary
    Individual Life Reinsurance
    Elspeth Sawyer, ASA
    Sr. Actuarial Associate
    Individual Life Reinsurance

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