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Sponsored: AXA Insurance Company

Facilitating Entry for Foreign Firms

The U.S. market offers growth opportunity for firms seeking expansion.
By: | February 20, 2018 • 5 min read

When it comes to successfully expanding a business into a new market, two critical factors usually stand out above a myriad of challenges: Opportunity and timing.

The U.S. marketplace has long represented great opportunity for global businesses. According to the Organization for International Investment, the United States was the world’s top target for foreign direct investment in 2016, attracting $3.7 trillion — and much of that attention was focused on the middle market. According to the National Center for the Middle Market, this U.S. segment reported a 7.6 percent revenue growth in the fourth quarter of 2017 over the previous year and represents the third-largest global economy.

As for timing, a confluence of factors could make 2018 a year rich with opportunity for international firms to enter the U.S. market. The economy remains on a steady upward trajectory as unemployment continues to fall, and recent tax and regulatory reform could potentially foster domestic manufacturing and global trade. In addition, chambers of commerce are actively seeking to pull in international firms with a variety of incentives and services.

“The year ahead will offer a lot of growth opportunity for international companies looking to gain their foothold in the U.S.,” said Dawn Miller, CEO, AXA Insurance Company.

But for all the potential the U.S. market represents to an international firm, successful entry is not simple or easy. Companies need expertise to navigate the operational, commercial, regulatory and financial challenges to a successful U.S. launch.

Managing Commercial, Regulatory and Insurance Risk

Dawn Miller, CEO, AXA Insurance Company

Once strategic decisions are made related to how best to expand into the U.S., whether through acquisition or organic growth, a host of additional challenges remain.

For one, a web of federal, state and local regulations awaits businesses crossing the border. Deciphering jurisdictional differences in tax codes and employment law; determining duty of care obligations; properly valuing physical assets —these are just some of the key commercial risks presented by any international expansion.

“How do you employ your workers abroad and keep them safe? Do you know the proper accounting and financial reporting methods in the U.S.? Where do your liabilities begin and end with contractors? The due diligence work is significant to ensure compliance,” Miller said.

Inbound companies also have insurance-specific hurdles to contend with, including critical differences in contract vernacular. Definitions of admitted verses non-admitted may vary in the U.S. from a European market. Self-insured retentions and deductibles may offer different advantages and disadvantages. Business interruption versus “loss of use” may not be clearly delineated.

No multinational company can assume that their domestic policies work the same way in another country, or will cover operations outside of the issuing jurisdiction. It comes down not just to intricacies of policy wording, but also to coverage limits required by law.

“There are different risk transfer mechanisms from market to market,” Miller said. “Not having a firm grasp on those variances can leave incoming companies either under-insured or with unnecessary coverage overlaps.”

But for new entrants to the U.S. market, getting a handle on both the commercial risks and insurance discrepancies is a mammoth demand on resources — especially for mid-size companies that run lean. As a result, insurance and risk management often get lumped together and sometimes fall to the bottom of the due diligence checklist.

While getting coverage in place quickly can check the “insurance” box, it misses a valuable opportunity to leverage the risk expertise of domestic carriers to tackle broader business risks as well.

Facilitating a Soft Landing for Inbound Business

“There’s a stronger role that risk management and insurance can play to allay the challenges and fears of foreign companies entering the U.S.,” Miller said. “The right insurer will bring transparency to an experience that can feel very opaque and help to create a soft landing.”

U.S.-based insurers who are proactive about getting risk management resources in front of companies can help international entities navigate both commercial and insurance-related risks.

AXA Insurance Company acts as a true partner in risk management by leveraging the resources of its U.S.-based teams as well as AXA Group’s global network.

“Our in-house claims and underwriting teams are dedicated to facilitating entry for companies coming into the U.S. market, and they’ve been doing it for 40 years,” Miller said.

AXA’s underwriters also come with expertise in property, marine, aviation and liability coverages. With more than 200 years of collective experience, they’ve developed a deep understanding of the needs specific to those companies transitioning to the U.S. market. The manufacturing, technology, and food and fashion industries are currently the top candidates looking to expand to the U.S. mid-market sector.

“Everything that we do is industry-focused. We have the technology, the data, and the breadth of AXA Group’s research capabilities to follow our clients’ industries on a granular level.”

Solutions + Services: The Whole Package

At the end of the day, the carriers that provide the best service for a company’s most important assets will build the long-lasting relationships that support continued growth.

“Insurance is only one piece of the puzzle,” Miller said. “We partner with all of the necessary third parties to create a comprehensive, one-stop-shop risk management solution.”

It does this in part by calling on its partners AXA Matrix and AXA Assistance.

AXA Matrix is a risk engineering firm that can help foreign companies strengthen and protect physical assets like properties and supply chains. AXA Assistance, a travel assistance provider, helps companies protect their most vital resource — their people.

“European countries have a duty of care for their employees working abroad,” Miller said. “Let’s make sure you have those protections here in the U.S. so you can honor those responsibilities.”

Both AXA Matrix and AXA Assistance are U.S.-based, so they can provide on-the-ground support.

“That domestic network of support is what helps companies not only start their business here, but grow their business here,” Miller said.

To learn more About AXA Insurance Company, visit http://axainsurancecompany.com/AboutUs.aspx.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with AXA Insurance Company. The editorial staff of Risk & Insurance had no role in its preparation.




AXA Insurance Company (AIC), part of AXA’s international network, provides US insurance and risk management solutions to large and mid-sized companies.

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]