Local insurance market rules and risk management culture are major worries for risk managers with operations in BRIC countries
Risk managers’ top concerns about the emerging markets are changing legislative environments, local insurance practices and risk management culture, according to a new survey.
In a survey of clients and brokers by Chartis UK’s Major Accounts Practice (MAP), risk managers were asked about the opportunities and threats they perceive for their operations in Brazil, Russia, India and China (BRIC).
Virtually all the respondents to the survey had operations in one of more of the BRIC countries. Over 90% were present in China, Russia and India and 83% were in Brazil.
Unsurprisingly the attraction of these countries was the access they offered to new consumer markets (75% of respondents).
Russell Meagher, head of major accounts practice at Chartis UK commented: “The economic growth being experienced in these territories coupled with a growing consumer class, increased foreign direct investment and infrastructure development present extensive opportunities for all types of businesses looking to extend their reach into new markets.”
Risk managers are keen to understand the differences in local custom and practice that need to be recognised and accommodated in their risk management and risk financing programmes.
There appears to be a trend in the BRIC countries towards greater regulation in the insurance sector, continued Meagher. “An example of this is the recently announced regulatory changes in Brazil which are likely to impact the shape and structure of locally admitted policies in this territory.”
The emerging markets insurable risks that are of prime concern to respondents are;
• crime and fraud 64%.
• the safety of physical assets 42%
• supply chain failure also 42%
• weather events 31%
• credit risk 28%.
