More than half of European companies say that transacting international business is more risky today than five years ago, with only 13 per cent believing they have a multinational insurance programme that meets their global needs, according to new research by ACE.
Of the more than 600 European companies questioned by ACE, 95 per cent are more concerned about multinational and export risk than they were half a decade ago. According to the study, exactly half of companies believe there are 'significant gaps' in their multinational insurance programme coverage, and 41 per cent say the same about compliance.
The areas of compliance that cause most concern are:
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local policy compliance, 48 per cent,
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claims settlements, 40 per cent, and
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consistency of coverage, or Difference in Coverage (DIC)/difference in limit (DIL) coverage, at 36 per cent.
The research finds that half of European companies feel either 'underprepared' or 'completely unprepared' to deal with multinational and export risk.
When asked which particular areas they believe their multinational operations are most exposed to today, respondents highlight:
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directors and officers (D&O) risk (46 per cent),
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environmental risk (39 per cent),
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reputational risk (38 per cent) and
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liability risk (35 per cent) as the top exposures.
Clive Hassett, Director of Multinational Services, ACE European Group, said: "Since the onset of the global financial crisis, many businesses have increased their focus on growing overseas revenues at the same time as we have seen a sea-change in the global regulatory and compliance environment. So perhaps it isn't surprising that nearly four in ten UK companies feel underprepared to deal with multinational risks."
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