The Balance of Power is Shifting in Asia
Notably, over the last year, Asian countries’ trade linkages have been shifting away from the US and toward China. This is predominantly due to China’s entry into the World Trade Organisation (WTO), its economic development, and its rise as a trade giant. Amid China’s rise, Asia’s exports to the US have edged down from around 23% of total exports in 2000 to stabilize at around 12% in recent years.
As our largest trading partner, Australia relies heavily on China’s economic performance and this shift in power should provide significant opportunities for the Australian economy, in particular those companies supporting the mining sector.
How to Understand Your International Exposures
Whether your organisation is expanding its operation into new markets, or trading with new foreign business partners, organisations must understand their exposures and operational risks. When assessing your organisation’s exposures, organisations should:
- Identify the risks
- Assess and quantify the risk
- Mitigate the risk- Risk transfer
– Plan for a crisis
– Test the plan and make changes if necessary
Understanding your international exposures can be difficult. Therefore, enlisting a risk consultant could be your best option. Amongst other things, consultants can help your organisation prepare for, respond to and recover from a variety of disruptive events.
In response to the sharp rise in terrorist attacks and the changing political risk landscape, organisations are increasingly considering risk transfer solutions. To this point, it’s also important to note that under selected crisis management insurance policies, there are funds available for risk consultants that equate to between 5%-10% of the insurance premium. These funds are used to deliver services to reduce the impact of an event; and can be used towards reviewing crisis plans, conducting simulations into terrorism, sabotage, malicious act risks, or training of executive team members in crisis situations.
Australia’s risk rating remains unchanged, however, if your organisation has operations, suppliers or customers overseas, or your employees travel overseas for business, it is important to understand the risks they might face. Visit the 2018 Risk Maps website to understand these exposures and operational risks you may face in challenging geographies.
Alternatively, if you would benefit from further insights into your political risk and terrorism and political violence insurance programs, contact our team today.