How risk managers can use international programs to mitigate geopolitical risks

Risk managers today are facing new challenges that are reshaping their approach to insurance buying. Political instability, global conflicts and lingering impacts from the COVID-19 pandemic are increasing the complexity of the risk  environment and the speed at which threats evolve.

At the same time, risk visibility within organisations is higher, which elevates the role of risk management, in many cases giving CROs a seat at the board and a voice in business decision-making.

Given these dynamics, Will Porter, head of international programs for Swiss Re Corporate Solutions’ Americas regions, says that risk managers are seeking more than just capacity from insurance providers.

He explains: “Risk managers want somebody who’s looking at different ways of mitigating risk and really building that resilience into a program based on an understanding of their needs. They want a partner who can bring them solutions proactively, before they even realise that they have an issue.”

PEACE OF MIND

Against this backdrop, many companies are turning to international insurance programs, looking for contract certainty and consistency over fragmented, country- specific policies.

Porter says that such programs simplify the insurance process by consolidating it into a single program, saving time and providing broader, standardised coverage, to the extent possible, across all regions. This approach ensures that companies are adequately protected, especially in areas with minimal local insurance options, allowing for quicker and more reliable claim payouts.

“Risk managers want somebody who’s looking at different ways of mitigating risk and really building that resilience into a program based”

He explains: “If you’re buying something local, it’s not going to provide the coverage in every country that you need. By buying an international program, you have full coverage on your home country policy, but you’re also going to get broad coverage on the foreign policies, through difference in conditions (DIC) and difference in limits (DIL) cover. That means that when a claim happens, you can be paid in country quicker and for more of the risk that you’re exposed to.”

“[Risk managers] don’t have to wonder ‘what’s covered on my policy?’ when a loss happens. They’re already going to know what coverage they’ve negotiated, so it does give them more peace of mind.”

An insurance partner with a modern approach to international programs, like Swiss Re Corporate Solutions, ensures that customers have consistent coverage worldwide, allows corporates to expand and operate internationally with confidence. Swiss Re Corporate Solutions is set to achieve $1bn in international program GWP this year, with a portfolio of 720 international programs and growing.

ALL ON THE SAME PAGE

Porter says that to get the most out of an international program, risk managers must work closely with their insurers to assess their exposures, considering factors such as supply chain vulnerabilities and local versus global coverage needs.

He says: “It’s about understanding what the exposures mean and where you need to have a local policy in place. You need to assess your supply chain and whether you have the right coverage for that. What we end up doing a lot is talking through loss scenarios with our customers and really working with them to develop a program that’s going to meet their needs.”

“You need to assess your supply chain and whether you have the right coverage for that.”

Porter adds that one of the biggest challenges he sees when a company is implementing an international program is internal alignment. Therefore, ensuring buy-in from local leaders and clear communication about premium allocations and coverage limits are essential.

He concludes: “As a company is moving towards an international program, making sure that everybody in their company around the world is on board and understands what the benefits are is critically important.”