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International Benefits Management (IBM) for Japanese Multinational Corporations

As the importance of employee benefits programs as a part of personnel strategies increases, we provide highly-detailed consulting and solutions to global corporations, taking into consideration the laws and business practices of each country.

Mercer Marsh BenefitsTM

Mercer Marsh Benefits, a brand that provides a range of solutions in the employee benefits field, was established in 2012 by Marsh, an insurance broker and risk advisor under the umbrella of Marsh & McLennan Companies (MMC), and Mercer, an organization and human resource management consulting firm. Mercer Marsh Benefits.


International Benefit Management (IBM) for Japanese Multinational Corporations

As Japanese companies develop overseas business, the costs of employee benefits programs provided by local subsidiaries is rising every year. Many Japanese companies entrust benefits programs to their local subsidiaries and do not become involved in building governance systems and determining costs. In contrast, many American and European companies implement various types of cost controls under the leadership of the parent company.

The Cost of Doing Nothing ― It is not uncommon for cost disparities in the range of several hundred million yen annually to arise among companies with thousands to tens of thousands of overseas employees according to whether they introduce cost control measures.

Mercer Marsh Benefits provides a range of solutions for creating effective employee benefit programs. In recent years, optimization of employee benefit programs for overseas employees has become a crucial issue for Japanese companies, which are becoming increasingly globalized. Mercer Marsh Benefits utilizes its extensive data regarding organizations and human resources and its specialized knowledge and negotiating capabilities in the insurance field to optimize employee benefits and insurance programs for employees at overseas sites, implement cost controls on a global level, and support governance.


Visualization of Overseas Insurance Benefit Programs

Visualization is providing support for the collection of necessary information regarding benefit and insurance programs for each local subsidiary and accurately ascertaining and analyzing that information. By performing these operations, it is possible to understand local conditions and investigate the next move that the company should take.

Overseas insurance benefit program categories: Accident, disability, medical, dental, vision, and a portion of pension
Cost burdens:
All expenses paid by the company, expenses divided among the company and employees, all expenses paid by employees
Adoption of insurance for benefit programs:
Total insurance coverage, partial coverage, self-insurance, employee insurance programs

Insurance Cost Projections for the Next Three to Five Years

Of the various insurance benefits, costs for medical insurance in Asian countries in particular are rising. By submitting employee data for local subsidiaries in each country, we can provide simulations of future insurance costs. After performing the visualization discussed above, we will prepare cost projections to make more accurate forecasts.

Forecast of Increases in Medical Insurance Costs in Each Country

Country 2013 General Inflation 2013 Medical Inftation Expected Change in Medical Premiums
Australia 1.0% 6-7% 5.5-6.5%
China 3.1% 5-7% 10-12%
Hong Kong 4.0% 4-5% 10%
India 9.3% 18% 16-22%
Indonesia 4.5% 12-13% 10-12%
Japan 0.3% 0% Not applicable
Malaysia 2.4% 10-15% 10%
Mauritius 5.7% 6-7% 5-10%
New Zealand 2.5% 8-9% 10%
Pakistan 8.5-9.5% 12-14% 15-17%
Philippines 3.9% 8-10% 10-15%
Singapore 4.9% 3-4% 4.8%
South Korea 3.0% 2% 7%
Sri Lanka 10.3% 10-18% 15-20%
Taiwan 1.3% 2-3% 4-6%
Thailand 1.9% 18-22% 15-20%
Vietnam 5.6% 20-25% 15-20%
Source: World Economic Outlook Database, Oct 2012, and Mercer's Inflation Summary
Presentation of optimal cost control measures (1): Establishment of insurance governance rules

Establish insurance governance rules and negotiate with insurance companies in each country based on those rules

Many overseas insurance benefit markets have unregulated rates determined with insurance premiums determined through negotiation of terms. Our specialists have access to domestic and overseas insurance markets and provide support with the aim of reducing insurance benefit costs.

Mercer Marsh Benefits has a network with locations in 135 countries and more than 7,200 consultants. Through this network, we communication with insurance markets based on the established rules.

Presentation of appropriate cost control measures (2): International Pooling Systems

Expansion of international dividends through introduction and use of international pooling systems

An international pooling system* is a mechanism whereby overseas insurance companies collaborate to create a network and use re-insurance programs to generate international dividends for companies. Each international pooling network has its own unique characteristics, and it is important to select which network will be used after conducting a comparison. Expert knowledge is also needed when negotiating terms.

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Provision of Information on Amendments to Foreign Laws and Market Levels

We issue the Worldwide Benefit & Employment Guidelines, a report on statutory and non-statutory benefit programs in each country, through Mercer’s Information Solutions.

With regard to insurance benefits, the report is written by Mercer Marsh Benefits consultants in each country, providing information on the prevalence of insurance programs and coverage levels in the respective countries.

If a customer wants to learn about insurance levels of other companies in the same industry for individual overseas sites, by participating the benefits survey conducted by Mercer in each country, they can obtain information on the participating companies in the form of benchmarks.

Mercer also issues monthly reports on amendments to laws concerning benefits in each country.


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