Managing Global Property Risks: A Strategic Approach for Multinationals
Operating a multinational business presents unique challenges, particularly when it comes to managing property risks. Natural disasters, economic pressures, and geopolitical instability can all significantly impact operations. As commercial property insurance markets evolve, businesses need robust risk mitigation strategies and strong partnerships. AXA XL emphasizes proactive planning and collaboration to navigate these complexities.
“For multinationals, an emphasis on risk mitigation and property risk engineering will be essential.” – Michele Sansone, CUO Property and Multinational Solutions, AXA XL.
Navigating a Shifting Insurance Landscape
While some lines of commercial property insurance are showing signs of stabilization after years of rate increases, the market remains cautious. Businesses cannot afford to become complacent.
One effective strategy is a multinational property program. These programs involve collaboration between insurers and property owners to develop comprehensive risk management plans that address global challenges. Such programs provide a standardized approach to risk management, ensure consistency, and enable centralized data collection and analysis.
Rising Risks in a Changing World
Despite attempts at stabilization in the insurance market, property risks remain significant. Natural catastrophes, such as hurricanes and wildfires, continue to be major concerns. The United States alone experienced billions of dollars in losses from disaster events in 2024.
“The primary challenge lies in the cost of transporting goods from one location to another and understanding the potential business interruption impact resulting from these costs, rather than the supply chain itself.” – Michele Sansone
Geopolitical disruptors, such as the ongoing conflict in Ukraine, and inflation also significantly influence the commercial property insurance market.
Key Benefits of a Multinational Property Program
The primary goal of a multinational property program is to address rising property risks impacting businesses globally. These programs provide a comprehensive view of all operations, leading to more effective mitigation strategies. They also offer benefits such as:
- Consistency: A standardized approach to risk management across all operations.
- Data-Driven Decisions: Centralized data and analysis for better risk assessment.
- Cost Efficiency: Leveraging global purchasing power to reduce redundancy.
Local Expertise for Global Challenges
Multinational property programs often leverage local insurers in each country to issue policies. This structure allows companies to comply with local regulations while maintaining control over their global risk strategy. It allows companies to take advantage of local insurance knowledge including understanding regional risks. Expertise also facilitates faster and more effective claims resolution.
Collaboration for Effective Risk Management
Constructing a strong insurance team is crucial for a global property program. This team should include claims and risk engineering professionals to provide comprehensive risk assessments, build mitigation strategies, and potentially lower costs.
Simplified Management and Tailored Solutions
AXA XL aims to support its clients in managing pressing property risks by providing tailored coverage. The company has launched a Multinational Solutions Portal to streamline the management of multinational insurance programs for its clients. This portal simplifies administration and reporting. AXA XL ensures that local policies are compliant the correct amount of coverage.
Conclusion
Effective property risk management is critical for multinational companies. By adopting comprehensive strategies, businesses can mitigate risks and navigate the complexities of operating in a global market, ensuring greater stability and confidence in their operations.
