Aon Risk Solutions Specialty Financial & Professional Services Managing Risks in a Rapidly Changing Landscape series: Where are your people? Successfully combining business travel risk management and how the insured professional firm responds Risk. Reinsurance. Human Resources.
Business travel is on the rise. Sources indicate that between 2017 and 2019, global business travel spending could increase by 5.8% to 6.4% year on year 1. However, with an increasingly mobile workforce comes potentially more risk. With a duty of care over employees on business trips and exposures ranging from the ordinary (travel disruption, cancellations, lost baggage), to the extraordinary (medical emergencies, kidnap, extortion, bribery) the demands placed upon an organisation to mitigate these risks are understandably serious. In response, employers are encouraged to deliver risk management support and advice, alongside a robust business travel insurance programme which provides insured response solutions direct to the point of need. To travel or not to travel With business trips now permanently woven into the fabric of global commerce, organisations have to ask themselves if they are doing enough to communicate the risks involved to their employees, particularly to high risk destinations. For example in 2015, a report on the NGO and charitable sector surveyed 1500 respondents and found that only 42% of aid workers had received risk management training 2 in spite of the fact they are frequently sent to parts of the world that will generally be avoided by travellers. Where organisations have dedicated business travel managers, the picture appears to be more positive. A more recent Business Travel News Survey of 229 travel managers, buyers, corporate safety and security managers found that significant numbers were utilising broad data sources to support travel risk management. For example 66% maintain itinerary and contact information centrally; 46% deploy market specific threat information and almost one in five use GPS-enabled traveller location data 3. Whoever s shoulders the responsibility for travel risk management falls upon, the challenge is increasingly significant, especially in a fast moving business culture like professional and financial services. Responding to client needs means trips often need to be taken at very short notice; when expectations are high, how does one also deploy a rigorous health and safety risk management framework? Do you understand where your people are travelling to and have you provided them with an opinion of the risks? Have you helped your employee to build a clear understanding of those risks? 1 Source: https://www.statista.com/statistics/324786/global-business-travel-spending-growth-forecast/ 2 Source: Key Travel July 2015 http://www.keytravel.com/media/2250/risk-management-whitepaper.pdf 3 Source: Business Travel News, February 2017. http://www.businesstravelnews.com/research/travel-risk-management/travel-risk-management-models Aon Risk Solutions Where are your people? 1
We ask our customers three things. Firstly; do you understand where your people are travelling to and have you provided them with an opinion of the risks? Secondly, have you helped your employee to build a clear understanding of those risks and the modified behaviours that may be required in certain countries? Thirdly, do they know how to access an immediate response during the trip? Without this, you are essentially divesting responsibility for a corporate risk assessment onto your employee. This isn t fair and in general terms, it isn t legal. Scott Bolton, Aon Crisis Management Do your employees know how to access an immediate response during the trip? To ensure trips are planned, authorised and monitored, a single provider is always advisable. Travel Risk Management (TRM) checklist Risks facing business travellers are dependent on a number of variables, however the following checklist is recommended by Aon as a benchmark. Do you utilise a centralised travel booking system with a single provider? What steps does your business take to consider the risk of sending staff on, or authorising a trip? Do you provide knowledge-based reports (typically from third party providers) for colleagues destined for locations experiencing: social unrest, terrorism risk, high crime, and poor medical/emergency healthcare infrastructure? Can you substantiate your corporate duty of care and demonstrate how you have prepared your employees for travel and supported them on their trip? Do you provide training or risk assessments for frequent travellers? Do you consider your insurance accumulation limit when booking flights/ transfers? For example, your policy may be limited to a certain amount per claim and additional travellers may dilute your insurance coverage. Do you exclude any particular countries? As businesses grow, they lose track of simple things like how many agencies are involved in booking their trips. This can increase the burden of risk substantially. To ensure trips are planned, authorised and monitored, a single provider is always advisable TRM should allow a formal risk assessment programme of each trip which asks the individual where they are travelling to, with which airline, where are they staying, for how long, what internal transfers they will be taking, and have they received specific country intelligence on risks and good behaviours? Law firms and other partnerships are an interesting case study because of the unique structure of LLPs. You will probably have greater challenges in keeping a degree of control on business travel and your partners have to be aware of their duty of care when either sending employees or going themselves on any trip as the owners of the firm. How do you communicate this and what checks does your central risk team apply? Scott Bolton, Aon Crisis Management Aon Risk Solutions Where are your people? 2
How do you ensure you re covered? When things go wrong, your business travel, accident and health insurances should provide compensation for loss, 24/7 emergency response services and crisis management solutions including: Business travel insurance The most common solution, business travel insurance, supports clients in circumstances including travel disruption (delayed, cancelled flights, lost or stolen baggage/possessions), medical treatment or repatriation. Personal Accident Insurance For employee groups or high limit individuals across a broad spectrum of general commercial and niche operations, PA policies will compensate individuals and families for accidental death or disablement. Kidnap for Ransom/Extortion Although it is estimated that many thousands of kidnappings reported every year, many thousands more still remain unreported 4, ensuring the safety of high risk target individuals as they travel is an important consideration for businesses. Aon Crisis Management arranges K&R programmes that provide peace of mind for companies and individuals. This comprehensive solution incorporates training, prevention and response. Corporates should also be aware of anecdotal evidence indicating a significant likelihood kidnapped individuals or their families will sue their employers subsequent to a hostage taking or other traumatic experience. While the presence of a K&R policy in your insurance programme will remain confidential, the absence of one can also be damaging to a business. Scott Bolton, Aon Crisis Management All three of these solutions have been developed over time so that now the insurance market offers very comprehensive coverages. However, we do recommend that you do check that War and Terrorism are included and the definition of these (in the UK most Insurers use the same definition for both). For example, were any of your employees unfortunately caught up in the Paris attacks of 2015? Did you claim for either injury or curtailment of trip? These could have been claimed for if the policy had been placed by Aon UK. Insurers also settled some cancellation costs to clients for cancelled trips to France in the immediate aftermath of the attacks. However this is more of a grey area as insurers are always wary of paying any cancellation claim that could fall within the standard exclusion under all policies of disinclination to travel. 4 Source: CNBC/US Bureau of Consular Affairs - http://www.cnbc.com/2015/07/06/the-multi-million-dollar-business-of-ransom-.html Aon Risk Solutions Where are your people? 3
Streamline and simplify A well supported TRM programme includes: Multiple Stakeholders. These include Risk Management, Benefits/HR, Corporate Security and Travel Multiple Insurance Policies. These include Business Travel/PA, K&R, Work Comp and Employee Benefits Multiple Emergency Service Providers. These include those embedded in insurance policies such as Europ Assistance, CEGA, AXA Assistance and Travel Guard. They may also include stand-alone, contracted providers such as ISOS Since 2005 Aon s Special Risk Practice has focused on Business Travel Risk Management Programmes and: 1. Identifying all providers of these programmes, whether embedded or contracted, and then qualifying their services. Once this evaluation has been completed it s crucial to create one point of contact that can coordinate with all other emergency response providers as needed given any situation 2. Creating a TRM Programme structure around existing Business Travel/ PA policies. Business Travel/PA is the broadest 5 insurance policy for travelers, accompanying dependents and other classes of insured 3. Consolidating multiple insurers on various local policies into one global insurer. This insurer will have the capability to duplicate local policies where required while providing a greater level of uniformity 4. Continuous development of new, global Business Travel/ PA markets to provide our clients with greater options 5. Developing bespoke employee communications ensuring travelers understand how to access help, through one point of contact, and therefore supporting an employer s duty of care Streamlining the process for travelers to access assistance, whether emergent or routine, and consolidating Business Travel/PA carriers is a core component of a TRM programme With the multiple policies and the multiple emergency providers it can be confusing as to who to use and when. Here are some examples that we believe will help: If you have a relationship with a security provider (such as ISOS), then this can be used pre-trip for guidance on what measures should be in place for the employees travelling Most organizations have access to many services that directly support their Duty of Care, but are rarely used. Protecting business travelers and meeting corporate responsibilities does not always require additional resources. Christopher Chao Aon Special Risk Practice 5 as opposed to individual travel policies which would have additional exclusions such as preexisting medical conditions Aon Risk Solutions Where are your people? 4
Whilst on a trip, one of your employees suffers a medical emergency, the Travel insurers emergency medical helpline should be contacted as they can assist with dealing with the hospital, particularly as some parts of the world will not carry out medical procedures until they have clarity around the insurance being in place. Under your Kidnap & Ransom policy there will be a specific Response Consultant provided by your insurer that should only be contacted by a designated person in your organisation (this is normally the individual who heads up your risk committee) if there is a potential claim. These policies should also include an ability to engage these Response Consultants to improve your risk management, for example to carry out an audit of your current response plan for a potential kidnap incident. Additional resources: Aon Terrorism and Political Violence Map Aon s T&PV Map is now accessible through our new, dedicated online portal, enabling those interested in the topic to examine past, current and future trends in T&PV risk. There is a correlation between the high and severe risk locations for T&PV and a higher incidence of kidnap for ransom peril incidents which should be of interest to travel risk managers at organsiations likely to send individuals to high risk areas. Terror groups use kidnap and extortion as a means to generate funds for their ongoing operations. Aon Risk Solutions Where are your people? 5
Case study: A Magic Circle Law Firm This globally recognised legal services firm has over 4000 employees, and around 20% of its people take business trips at least once a year. The individual responsible for this firm s business travel team provided the following comments: Some years ago, I considered our approach and made changes in two areas. Firstly, it became clear we shouldn t have too many people travelling on the same aircraft and also that we stay within the insurance limit. We now have an established schedule within our travel agency agreement so problems are notified to us and the trip isn t disrupted too much. Secondly, we identify and provide intelligence on country-specific risk, to help colleagues adapt their behaviours and make the right decisions. We provide data sheets on the key safety and medical issues associated with specific countries and in our experience, sensible advice is often the most important. Lawyers can be very dynamic individuals, with demanding clients sometimes requiring travel without notice. There could be an oil and gas project in Nigeria which hits a snag or a merger transaction somewhere that needs immediate support. Timing is probably our greatest challenge. 24 hours is sufficient notice for our Travel Risk Management protocol to ensure colleagues can be properly briefed and supported. From the moment someone leaves their home country, TRM protocols collect information on progress. We work closely with our travel agency using an automated system so that every trip is authorised by our team. Without this, tickets cannot be issued. Then, from the moment a colleague departs, I receive email updates of their progress. Short of GPS tracking the individual themselves, this is a robust method of ensuring trips go as planned and are within our accepted safety protocols. The same applies for transfers between airports, hotels and so on. As a result of the firm s commitment to TRM protocols, they are also able to have a fully transparent relationship with their insurers. Our claims process works because we have a good relationship with the insurer; there is a deductible and we take a considered view as to whether a claim needs to be made. This is rare but generally happens if the issue involves medical treatment overseas. If someone has had to be hospitalised we know that our insurers have the right networks to respond. For further information about how the insurance policies interact and to discuss your specific needs, please contact your usual Aon contact or: Simon Reed Client Director Aon Risk Solutions Simon.reed@aon.co.uk 0207 086 3801 We identify and provide intelligence on countryspecific risk, to help colleagues adapt their behaviours and make the right decisions There could be an oil and gas project in Nigeria which hits a snag or a merger transaction somewhere that needs immediate support. Timing is probably our greatest challenge Aon Risk Solutions Where are your people? 6
About Aon Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. Aon plc 2017. All rights reserved. The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. FP.APEXPSG.002.SD Aon is not responsible for content held on third party websites Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Risk. Reinsurance. Human Resources.