AXA XL: Strengthening Multinational Property Risk Strategies
Operating a multinational business presents unique challenges, especially in managing property risks. As the commercial property insurance market navigates fluctuations due to natural disasters, economic pressures, and inflation, businesses require strong risk mitigation strategies and reliable insurance partnerships.
While some stability is emerging in certain areas, ongoing vigilance is crucial. Michele Sansone, CUO Property and Multinational Solutions at AXA XL, emphasizes the importance of proactive risk management.
“The outlook for the commercial property insurance market is still cautious… I believe, for multinationals, an emphasis on risk mitigation and property risk engineering will be essential,” said Michele Sansone, CUO Property and Multinational Solutions, AXA XL.
The Value of Multinational Property Programs
A key strategy for enhancing risk mitigation is implementing a multinational property program. These programs foster collaboration between insurers and property owners to develop comprehensive risk management plans addressing global challenges.
Rising Property Risks
Even with some market stabilization, property risks remain a significant concern. The increasing frequency of natural disasters, such as hurricanes and wildfires, underscores the need for robust risk management. In 2024 alone, the U.S. experienced 24 disaster events, each with over $1 billion in losses.
Sansone highlights the complexities.
“The primary challenge lies in the cost of transporting goods… understanding the potential business interruption impact resulting from these costs, rather than the supply chain itself.”
Additional challenges include geopolitical events like the ongoing conflict in Ukraine also impact the commercial property insurance market. Inflation further influences the market dynamics.
Benefits of Multinational Property Programs
The primary goal of multinational property programs is to manage growing property risks across global operations. Such programs offer several advantages:
- Comprehensive View: Provide a comprehensive overview of all operations.
- Consistent Approach: Ensure a standardized approach to risk management, promoting consistency across all global operations.
- Centralized Data: Enable the collection of centralized data, improving risk assessment and decision-making.
- Cost Efficiency: Leverage global purchasing power and reduce redundancies, improving cost efficiencies.
Local Insight for Global Risk Management
Multinational property programs often leverage local insurers for fronting operations. This approach allows companies to adhere to local regulations while maintaining control over their risk strategy. By partnering with local insurers, companies gain access to local expertise.
- Local Compliance: Enables adherence to local regulations.
- Regional Understanding: Provides better understanding of regional risks and regulatory environments.
- Coverage Tailoring: Facilitates tailoring coverage to local needs.
- Stakeholder Relationships: Aids in navigating cultural nuances and building stakeholder relationships.
- Claims Resolution: Enables faster and more effective claims resolution.
Sansone emphasizes the importance of local expertise.
“Having a network with local expertise is crucial in providing valuable information to our clients… Our goal is to provide consultative advice when we review and offer insurance solutions.”
Strategies for Effective Collaboration
Effective collaboration between insurers and insureds is essential. This involves more than just the underwriter and the client, with claims and risk engineering teams playing essential roles. Through a good insurance team, multinationals get access to:
- Comprehensive Risk Assessments: Receive comprehensive risk assessments.
- Risk Mitigation Strategies: Benefit from risk mitigation strategies developed.
- Reduced Costs: Potentially lower potential costs.
AXA XL’s Commitment
AXA XL is committed to supporting clients in managing property risks. Sansone and her team provide tailored coverage to meet the needs of their multinational partners. AXA XL has launched a Multinational Solutions Portal designed to streamline the administration and reporting of multinational insurance programs.
The portal provides a clear overview of global property programs, including instructions, statuses, and policy copies. Furthermore, it allows users to access all policy information in one place. AXA XL aims to offer businesses peace of mind by providing robust insurance coverage and global risk mitigation.
“When a client approaches us to front their program and provide evidence of insurance in all the countries where they operate, we conduct a thorough analysis.”
