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Navigating international risk with Zurich International Programmes

At a glance

  • In today’s globalised world, an increasing number of businesses are introducing international elements to their operations
  • While this provides new opportunities for growth, it can also open up new risks
  • We explore how Zurich International Programmes can help businesses negotiate the complexity of international growth

Whether selling worldwide through social media, or managing complex global supply chains, a growing number of businesses are introducing international elements to their operations.

Indeed, it’s becoming increasingly rare for a business not to have any element of international exposure.

Overseas markets can provide fantastic opportunities for growth, but global expansion is not without risk.

How businesses of all sizes are seeking international opportunities

Alan Roxburgh, Public and Products Liability Manager, Zurich, says: “The internet has opened up new avenues for businesses to get their products into new markets, and we’re seeing more trade being conducted online every year.

It is becoming increasingly common for businesses to test the opportunities in a new market, with a single employee working locally from a small office in that territory.

As a consequence, smaller businesses are getting better at finding opportunities overseas, and then building a physical presence in those markets where it has been successful.”

David Geere, Senior Property Underwriter, Commercial Insurance UK, adds: “Even if a business is not setting up a legal entity locally, it’ll often have some form of storage overseas or stock that’s with third-party suppliers in ports.”

The profile of businesses looking for international growth opportunities is also changing.

Alan explains: “Where we might traditionally have thought about manufacturing and engineering businesses having international elements, we’re now seeing a really eclectic mix of companies with this exposure. I’ve seen everything from a company that operates car washes on a global scale, to fashion businesses looking to tap into new markets with pop-up store openings.”

Some businesses have managed to expand their global reach without specifically targeting international trade. Many companies now advertise almost exclusively on social media, bringing them into contact with new markets. If enough trade comes from a particular region, this may necessitate a local distribution hub and the additional infrastructure required to effectively service local customers.

What to think about when introducing international elements

Whatever approach a business takes to international expansion, there are a number of important factors to consider.

“Opening new operations internationally can sometimes expose a company to natural catastrophe risks that they might not be used to,” explains David. “Whereas in the UK, natural hazards might be limited to flooding, a move overseas could introduce everything from hurricanes to earthquakes and cyclones.”

Managing differences in regulation from territory to territory can also be complex. “Businesses need to be careful not to fall foul of local regulations and tax rules,” says Alan. “What a company might think of as a safe business practice in the UK could have a completely different impact overseas.”

It is essential to establish any local policy regulations and restrictions, what taxes and charges need to be paid, whether state-owned insurance companies need to be involved, and what insurances are required by law. The more countries involved, the more complicated it is to keep track of local regulatory change. Zurich’s Multinational Insurance Application (Zurich MIA) is a global regulatory and tax database, designed to help organisations stay compliant.

Managing political risk

With supply chains frequently touching all corners of the globe, there could be any number of political risks to manage, from sanctions to political instability and industrial action. Zurich Risk Room, a risk assessment tool that analyses political, environmental, economic and social risks in more than 150 countries, is a useful resource for companies considering expanding into a particular region.

Even if a business does not operate internationally, there is a good chance it has some element of international exposure within its supply chain. The more complex the supply chain, the more difficult it can be to manage the risks.

Introducing Zurich International Programmes

To negotiate these challenges, Zurich offers a range of international programmes – full-service solutions, specifically tailored for UK companies with international risks. Customers benefit from a single point of contact to manage their international risks, and can tap into local expertise in any of the more than 200 markets Zurich has a presence in.

Zurich’s global expertise includes:

• 800 risk engineering professionals globally
• 8,000 claims professionals
• A new dedicated international underwriting team, based in Birmingham

Alan explains: “Our international programmes are designed to make the process simpler and more efficient for both brokers and customers”.

“Our back-office systems are second to none when it comes to understanding different territories, getting documentation issued, allocating tax and achieving compliance.”

We can support customers, wherever their international exposures may be, and we have recently launched our international programmes range specifically for mid-market customers.

Zurich International Programs can provide cover for:

• Property
• General Liability
• Motor Fleet
• Engineering Lines
• Marine
• Professional Liability
• Directors and Officers
• Corporate Accident & Business Travel
• Product Liability
• Security & Privacy
…and more

For more information on the issues discussed in this article and Zurich International Programmes, please get in touch with your local Zurich contact.

Image © Getty

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