Multinational issues

The growth of financial and corporate governance regulation across the globe and the increasingly complex operating structures of businesses have combined in driving the development of sophisticated insurance programmes.

ACE’s own research amongst senior risk professionals, conducted by the Economist Intelligence Unit (EIU) over the last two years, has consistently placed regulatory risk as one of the most significant threats to global business operations

Growing regulatory controls have changed the multinational insurance climate evidenced by the development of insurance and related tax regulatory schemes throughout the world. Globalisation and the growth in emerging markets also create challenges. Risk managers, responding to the EIU survey, indicated that alongside an expanded investment in emerging markets, the risks associated with this growth have increased.

With the stability of political regimes identified as one of the most significant threats to operations in these markets ongoing risk assessment throughout the life of any investment is crucial.

Today’s insurance buyers are concerned about both the enforceability of the insurance protection they have purchased locally and their exposures to unforeseen tax assessments or fines. Insurance partners whose capabilities and global resources match their needs are fundamental in delivering a legally compliant, global programme.

The risk management community recognise that their future success lies in the need to ensure organizations have a culture and awareness of risk throughout their structures.

Growing the multinational business poses real issues and it will be crucial for these organizations to establish a clear risk appetite and have well-defined systems and processes to monitor all ongoing risks. Global insurers can utilise their proprietary technology resources and global network of insurance professionals to analyse current, accurate information, even down to the requirements for lines of business in these locations.

At all stages of the risk management process – from risk mapping and mitigation through to ensuring a costeffective and adequate risk transfer using a broad and compliant insurance programme, to strong claims handling procedures and management information – global insurers should be continuously working to maintain pace with the evolving needs of the risk management community, ensuring the breadth of expertise and commitment to service needed to support multinational clients.

Kadidja Sinz, commercial director – Continental Europe, Russia and CIS, ACE European Group