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IPMI Magazine Articles - Insurance, Travel, Business, Risk Management

Friday, 11 November 2011 13:59

Written by Mr. Frank Reuter, Director, REUTER Consulting.

Companies are often careless about “Business Trip Security”. Only few purchase adequate travel insurance programs. Efficient risk management for employees and for the company itself is the exception. This is considered negligent as organizations have a general statutory duty of care towards their employees. The “EU Corporate Manslaughter and Homicide Act”, which is planned for 2012 will impose much stricter sanctions when employers violate their obligations towards employees.

Companies need to ensure, in their own interest, that business travellers do not ‘convert’ to expatriates, so called “Stealth Expats”. Commercial organizations need to be vigilant that these travellers do not involuntarily establish business premises in foreign countries. The consequences can be severe ranging from imprisonment of the employees to future travel bans and even termination of business activities for the entire company. Furthermore, ensuring travellers or expatriates are not disadvantaged regarding fringe benefits or taxes due to business travelling is vital.

In the following section you will find a practical overview on how to develop a risk management plan for your business travellers and expatriates. Firstly, your management should organize a workshop. Common project duration for medium-sized companies with approximately 150 travellers is one year. In larger organizations the project may take proportionally longer – regardless if more resources are available.

At least three of the following departments, having previously compiled the following basic information, should participate:

Human Resources

• Number of travellers in the previous year
• Main destinations
• Number of travellers per destination
• Number of expatriates and their dependants in the previous year
• Residence of the expatriates ( country)
• Is there any information provided pertaining to security and medical services while travelling (e.g. in the intranet)?
• Do you have any information concerning visas?

Insurance Department

• Name and registered office of the health insurance company/companies for travellers and expatriates
• Name of the insurance assistant
• Price per traveller/year or price per day
• Price per expatriate/year
• How many claims were reported to the insurance company in the previous year?
• What type of problems with the insurance company, the insured persons or the assistants occurred during the last three years?

Security

• Have contracts with (external) security or medical assistance companies been signed?

If yes, with which ones?

• Medical assistance companies
• Security assistance companies

• How many security incidents were reported to the crisis management team in the previous year?
• Which problems occurred? a) medical b) security-related
• Was there any involvement of an external service provider in order to solve the problems?
• If yes, which company?
• Does the staff member/expatriate receive a risk profile of the destination making a distinction between medical and security risks before travelling?
• Is there a 24/7 emergency number available for all the travellers/expatriates?

Is there - a crisis manual - a crisis guide - a business continuity plan - an internal standard operations procedure in case of emergency while travelling - a pandemic plan?

Travel Management

• Name and registered office of the travel agency/agencies
• Is an Online Booking Engine (OBE) being used?
• If yes, what percentage of the bookings is realized by the OBE?
• Do standardized travel guidelines exist?
• Are these guidelines compliant with those of foreign subsidiaries/the company?
• Is a traveller-tracking service offered?
• Is there any cooperation with a hotel booking portal, if yes, with which one?

Corporate medical service/Company doctor

• Which organizations are used to understand vaccination requirements (e.g. Robert-Koch-Institut (RKI), WHO)?
• How do they ensure the compliance with the vaccination requirements for the destination?
• Where and how do they carry out occupational medical examinations?
• Were there any cases of evacuation/repatriation in the last three years, if yes, which ones?

Having gathered the above information the next steps in the workshop are to tackle specific subject.

Some of these subjects are but not limited to:

• Risk classification (Estimating the medical and security risks in the destination countries)
• Travel guidelines (e.g. travel restrictions to high-risk areas, vaccinations)
• Travel booking in accordance with the company travel guideline and including information concerning the respective country
• Visa application (avoiding legal disadvantages)
• Insurance contracts with global medical assistance companies
• Contracts with security assistance companies (focusing on risk mitigation)
• Traveller localisation
• Invitation to tender for external service providers

The invitation to tender for external service providers, who may minimize the risks during the trips or secondments and who offer help in case of emergency, is a key factor in providing duty of care to employees.

The checklist below is useful to find the adequate partners:

1. The service provider should be globally present; that means that they should have at least one office on each continent.

In the best situation, you will find a partner close to each of your offices.

2. The partner should run at least one emergency service which is available 24/7 and in several languages.

The offered languages should above all cover the language proficiency of your subsidiaries. It is true that English is one of the most spoken languages in the world but in case of emergency it is not necessarily your staff member who is on the phone but maybe a representative of a local authority, a rescue service or even any other third person who talks to your office respectively to the security service provider.

3. The service provider should run an extensive database of the respective countries in several languages.

It absolutely necessary that this database contains the following information: country risk classification, current warnings, local emergency numbers, security advices for the arrival and the further course of the trip, general behaviour advices, a prospect on the timely development with reference to forthcoming local events. It is absolutely necessary that the information is also available by telephone at any time.

4. In case of emergency, the commissioned company should not just give advice but also operate.

Help and assistance in the case of armed robbery, loss of luggage, the planning of safe routes and any other support should be ensured by the partner or his network.

5. In the case of global events, your service provider should inform you proactively.

This information should already contain the first measures to avoid further disadvantages.

6. The potential provider should agree with a test.

This test may be a typical situation or an apparently dull case like e.g. the organisation of a trustworthy taxi service at the airport of Mexico City.

7. The provider’s processes must fit your own processes.

If the provider, for example, can’t offer a written summary of the measures taken in case of emergency, you may have difficulties with the possible cost reimbursement of your insurance company.

8. The price for a standard cover.

Meaning the membership with an assistance company including country information and concrete assistance in case of emergency should not exceed the amount of 20 euros per person/year.

9. Consult with companies of the same field, size and the same regional foreign activities.

Many of the providers have an Anglo-American background and understanding of security topics. This means risks are sometimes exaggerated and that the sources of information are sometimes rather dubious. In order to check the offer, it is recommended to take a thorough look at the country information.

If you are, for example, warned of attacks by right extremists in the Eastern part of Germany in general, and if areas which may be dangerous on May 1 or by night are generally declared as “No-go areas”, then the whole offer should be regarded critically.

One thing is clear: the providers of this kind of security services profit from the business with the (in)-security. The real security thus becomes the product security. Free of charge information, in turn, - provided by the Federal Bureau of Criminal Investigation or by the Federal Foreign Office - pays tribute to the fact that certain statements about a country may have diplomatic consequences. The only way to go lies somewhere in the middle: between private providers and the information by the authorities.

About the Author: Frank Reuter

Frank Reuter is an independent consulting professional with extensive experience in the Travel Assistance Industry. Frank has worked for renowned assistance companies such as International SOS and Allianz Global Assistance.

www.reuterconsulting.com