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Definition of 'Multinational Pooling'
A method global companies use to manage the risk of their employee benefit plans throughout the world. The different employee benefit programs of a mulinational company are combined to form an international pool. The result of multinational pooling is financial savings and better control of the risks.
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Investopedia explains 'Multinational Pooling'
There are two types of multinational pooling: company-specific and multi-client. Company-specific pooling is used by multinationals with international clients who are large enough to do the pooling on their own. Multi-client pools are available for companies who are less global but can none the less save costs by joining forces with other companies.
The merits of multinational pooling include:
- Economies of scale and purchasing power
- Global experience rating
- Financial cost savings
- Improved underwriting terms and conditions
- Annual reporting
- Management tool and information base
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