In the first of a series of joint interviews with product and country leaders, Caroline Tran, Product Leader, Political Risk Credit & Bond – Europe, and Julien Guénot, Country Manager – France, discuss the importance of understanding local cultures and building close relationships with clients in order to help them navigate the risks involved with trading across borders. Caroline and Julien also explain how Caroline’s newly created role will see her coordinate AXA XL’s efforts to better serve clients investing and trading around the world against the backdrop of heightened political tensions both close to home and further afield.
Why was the role of Product Leader, Political Risk Credit & Bond – Europe created?
Julien Guénot: The past year has – like no other – highlighted that the world is volatile and unpredictable. The COVID-19 pandemic has been a human tragedy on a global scale, and it has also impacted infrastructure projects and supply chains. Against that backdrop, geopolitical tensions and changes to trade agreements have added to an already heightened risk environment for companies investing and trading across borders.
Foreign trade accounts for more than a third of the European Union’s Gross Domestic Product. European companies are facing political tensions both on a global level and closer to home. Having an experienced leader like Caroline, based in Europe and coordinating a team of local experts, enables us to better meet the demand from our clients for the bespoke insurance protection they require to help manage these risks.
Caroline, can you tell us a little about your career to date and what your new role entails?
Caroline Tran: I began my career in Shanghai and have worked in the political risk and credit insurance industry for more than 17 years. I have also worked in Europe and the UK for many years and I am now based in Paris. This experience has given me an insight into the risk challenges faced by companies from these markets as they invest and trade across the world.
In my role as Product Leader for Europe, I am responsible for developing the underwriting strategy for PRCB (Political Risk Credit & Bond) for Europe and overseeing its implementation. I work closely with AXA XL’s PRCB underwriters and distribution teams in their local markets to understand the needs of clients there. I also have direct technical responsibility for AXA XL’s PRCB portfolio in France.
Why is it so important to have local underwriting teams for PRCB clients?
Caroline Tran: Our role as PRCB underwriters is to help our clients, such as corporates and banks, tackle risks they may face while they are exporting their goods or developing their business overseas, particularly in developing and emerging economies.
We live in a globalised world, but having a local footprint is vitally important to understanding the culture of our clients and the day-to-day challenges they face. We are in the process of launching our offering in Germany, for example, to be closer to our clients there.
Our clients need local contacts who are empowered to make decisions, who speak their language and who understand their unique challenges. The insurance coverages we provide against the risk of non-payment and against risks arising from political events are bespoke solutions tailored to our clients’ specific needs. The closer you are to the client, the better the understanding you have.
What are some of the challenges that your European clients are currently facing and how can PRCB coverage help?
Caroline Tran: As Julien mentioned, 2020 was a challenging year for many companies because of the COVID-19 pandemic on top of the shifting geopolitical landscape. And those challenges have continued into 2021. Many projects suffered delays as the movement of people and goods was restricted by measures aimed at stopping the spread of COVID-19. The rollout of vaccines to combat the pandemic has given hope to many companies that there is light at the end of the tunnel and projects that were delayed are now back on track and we are seeing strong demand for coverage from both new and existing clients. Our local footprint has meant that we have been able to be very agile in helping our clients navigate the challenges they have faced over the past year – and may will face going forward.
We aim to build partnerships with clients. The nature of the projects that our clients are involved in mean that we aim to have long-term relationships with them, to work with them from the very beginning of a project – from the tender stage to the end of the contract. And we talk to them on a regular basis to ensure they have the right coverage in place for their evolving needs. If a risk event occurs, we not only indemnify the loss but, crucially, we work closely with those clients to maximize the recoveries. PRCB coverage has enabled investments and projects to continue despite the recent unprecedented circumstances.
As we look to the future, what are the trends for PRCB?
Caroline Tran: The global economy now is really driven by developing and emerging economies where, in addition to huge opportunities, there are diverse and rapidly shifting political, credit and bond challenges. Political tensions are increasing in some parts of the world, and major trade agreements are also under the spotlight in developed economies. Exporters and investors must also be careful not to underestimate the threat of climate change. Because its effects are systemic, climate risk is likely to stress local economies and sometimes may cause market failures.
In this constantly moving world, the demand for Political Risk, Credit and Bond coverages keeps growing. We work with global banks, development finance institutions, direct foreign investors, and export credit agencies investing and trading in these evolving marketplaces. We will continue to build long-term relationships with these clients and adapt to meet their changing requirements.
Julien Guénot: With Caroline’s appointment to this new role, we are in terrific shape to fulfil our payer to partner pledge and serve our clients as they tackle the changing and complex risks associated with trading and investing overseas.
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