Once a carrier has been selected, the next obstacle the product faces is how to provide on-site service to the customer who is thousands of miles and several time zones away. It is at this point that a foreign brokerage correspondent can be invaluable, if not indispensable. The answer is through the foreign brokerage correspondent. A critical concern is the degree of control the agent will have over the business. If in fact, insurance is still for the most part local in its dealings with clients and regulatory institutions within each country, then the objective is to establish a strategic alliance with correspondents that reflects and supports this.
Insurance products do vary substantially from location to location.
On this evidence, local knowledge is demanded to effectively manage the variety of rates, forms, and fund transporting mechanisms. Ideally, the correspondent will be the knowledgeable insider in his or her home market that will make your programs work smoothly. A recent example illustrates the difficulty of operating without a reliable network. A U.S. domiciled company with several distribution centers in Europe and the Far East acquires a firm based in Spain that has a large manufacturing facility. This makes control of the U.S. business, and of course the whole, quite vulnerable.