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Archive for category: Global

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Top Risks in Global Expansions

If you are a technology or life science firm considering global expansion, you need to become aware of some foreign risks that need to be managed. Tips to handling foreign risks include:

Establishing a Global Risk Management Program – Handling of foreign risks is different from the management of domestic risks. Foreign risk requires different treatment and a firm understanding of the differences in laws, business practices and procedures for handling certain risks. With an ever-increasing number of firms that are expanding their operations to include facilities on foreign soil, it is important to establish overall goals for your risk management program.

The goals for your global risk management program should include the standardization of risk management controls, and an improved ability to predict potential losses. You will also need to eliminate gaps in your insurance coverage, identify hidden costs in your insurance program and ensure that you are in strict compliance with local laws and are leveraging economies of scale in your insurance program.

Political Risks Play a Role in International Expansions – Political risk is defined as the threat of losing assets, management control, or potential earnings as a result of political action by the host country. Generally speaking, a country with a stable government poses less of a risk than one in turmoil. Specialized Political Risk insurance policies can protect against certain types of perils for companies doing business or conducting operations in foreign countries. These insurance contracts often address business exposures faced by these companies as a result of foreign governmental action. Types of exposures that can be covered under political risk policies include confiscation, expropriation, deprivation, nationalization, political violence and currency inconvertibility. They can also be customized to include export credit.

Economic Risk Come in Different Shape and Size – Economic risks speak to the chance that a host country may impose sanctions that will restrict or regulate the activities of foreign corporations. Most common among these are exchange controls, which restrict movement of foreign money out of the country, tax policies that are often used to control foreign companies by placing large taxes on their products, and price controls in which host countries establish regulations controlling the price range of a business’s goods or services.

Don’t Forget the Cultural Risk – Cultural risk can be as damaging as political or economic dangers. National cultural risk is the possibility of doing something considered unacceptable by the social culture of the host country. Business cultural risk is the threat of doing something inappropriate within the business environment as a whole. Corporate cultural risk is the risk of making a cultural error when dealing with a specific company.

Managing foreign risks can determine your level of success in the global market. The international network of professionals in TechAssure Association can help you establish a solid global risk management program. Contact us to learn more about our members.

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The Multitude of Risks Facing the Life Science Industry

The life science industry by nature carries a multitude of inherent risk. The board of directors and executive body must address risk management on a continual basis, meeting constant demands stemming from partners, insurers, physicians, patients, lawyers, and media. As need arises, added complexity and heightened risk can overlap these issues, creating a more difficult environment for overall efficient company management.

Because of the nuances involved in the life science industry, you must take appropriate precautions to identify and evaluate all risks to your organization. They could include:

  • Compliance with numerous regulatory entities such as the Food and Drug Administration, Department of Health and Human Services, Securities and Exchange Commission, Department of Justice, etc.
  • The ability to adapt to constantly changing and accelerating global regulatory activities
  • Security breaches and IT failures
  • Inadvertent exposure of intellectual capital
  • Cost and availability concerns

Life Science firms can also take risk and turn it into a marketplace opportunity. The most common areas where we witness life science firms that manage the flip side of risk include:

  • Competitor product failure that allows for your firm’s product to become a forerunner for approval
  • Products are approved ahead of schedule, allowing for early availability
  • Product manufacturing improves or is produced ahead of initial projected time frame
  • An unanticipated gain in market need for a product or unanticipated market sharing upon launch of product

It is important to implement a broad risk management plan. Tips for advancing your risk management strategies include:

  • Keeping on or ahead of schedule for product review and release through strategic planning
  • Addressing increased demand for cost effective products from physicians, consumers, politicians and regulators and increased interest from investors
  • Heeding the call from consumers for safer or risk-free breakthrough therapies

Biopharmaceutical and life science firms need to rely on a comprehensive insurance plan to deal with an ever-evolving matrix of risk. TechAssure members can help your firm deal with a multitude of issues concerning risk management including, but not limited to: network and privacy security, increased global competition, loss of intellectual property and delays or business interruption in Research and Development. Please contact us for more information on how our members can help you minimize risk to your life science firm.

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What Can our Global Members Do For You?

If your company is expanding its business overseas, you may find it daunting to deal with all the requirements of operating under multiple governing bodies. Technology and Life Science firms need the guidance and knowledge of seasoned professional insurance and risk experts when establishing a multinational presence.

Risk management is crucial for any company, and navigating the complexities of risk mitigation in different countries is a job best left to the experts. That’s where TechAssure, a global non-profit organization can be of assistance. Our members stay on top of the shifting insurance regulations, allowing you to focus on your core business processes.

We have a network of 22 insurance brokerage firms in seven countries to serve more than 4,000 clients in technology and life sciences, which your company can use to find a certified member of the insurance industry to assist you in your global business efforts.

Every company has different needs, and TechAssure’s members are qualified to provide you with service to address your general concerns about risk management as well as risk concerns that are specific to your industry or your particular company.

TechAssure’s customized approach ensures that your liability concerns will be addressed. For example, you may need help with lines of coverage for international property, international workers compensation and international automotive liability.

Our members will provide you with a global risk evaluation. They will also develop standardized insurance contracts to make sure that you are covered as you expand into new countries by, designing, negotiating and placing your multinational risk program quickly and efficiently.

A TechAssure member is standing by to help you identify areas where you can mitigate your exposure. To find out more about the benefits of consulting with a TechAssure member, please feel free to call us at 512-377-9594, xt 700.

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Technology Firms Tend to Develop Global Risk Exposures Early

Technology companies tend to go abroad quickly to grow revenues, secure market share, and gain access to knowledge workers. As a result, the borderless industry challenges companies to manage a global work force, currency risks, technology transfers and global supply chains, all while being able to respond to different relationships with government and regulators.

A TechAssure member can help you identify the exposures associated with global expansions. To learn more about the benefits of working with a TechAssure member, please give us a call at 512-377-9594, xt 700