News & Media

Tuesday, May 27, 2014

[INDUSTRY NEWS] Continued focus on malaria prevention can yield positive results

One of the most common diseases throughout the world is malaria. Recently, the World Health Organization stressed a continued emphasis on prevention and education to further decrease the likelihood of a malaria outbreak.

Expats across the globe are often facing a high number of threats, especially those related to disease. Every country presents a unique scenario that has to be accounted for, and a lack of knowledge, preparation or international insurance could lead to dangerous, costly problems.

One of the most common diseases throughout the world is malaria, and a number of workers abroad are in countries that are currently coping with a rash of cases. While international health coverage is vital to cover any related expenses while outside of your home country, you should also take the proper steps to reduce the risk of exposure and stay safe at all times. Recently, the World Health Organization stressed a continued emphasis on prevention and education to further decrease the likelihood of a malaria outbreak.

Additional measures needed to eradicate malaria
April 25 marked World Malaria Day, and in honor of the event, WHO has released additional resources to help countries determine malaria risk and identify adequate steps to move forward with prevention. 

The emphasis on malaria highlights the dangerous nature of this disease, and expats who are living and working in affected countries may want to take note of recent trends and preventative measures. According to WHO, there has been a 42 percent reduction in malaria mortality rates worldwide since 2000, with a 49 percent drop noted in the organization's African Region. Even some countries with especially high rates have the possibility of elimination in their future.

"Increased political commitment and the expansion of global malaria investments have saved some 3.3 million lives since 2000," said Dr. Margaret Chan, director-general at WHO. "Countries where malaria remains endemic now want to build on this success."

Recently, ground has been broken on the disease in several countries. WHO certified four nations as malaria-free since 2007: the United Arab Emirates, Morocco, Turkmenistan and Armenia. In addition, 19 other countries have entered the pre-elimination or elimination phase, while seven more nations are not far behind that important stage.

Protective steps exist to prevent malaria
Given the prominence of malaria throughout the world, expats should take all available steps to reduce the likelihood of exposure. Thankfully, there are many ways you can go about that, in conjunction with
international health insurance.

The U.S. Centers for Disease Control and Prevention reported that malaria is common in Africa, Central and South America, Asia and several other regions. The disease is spread via mosquito bites, and symptoms include fever and chills. A lack of treatment could even lead to death. Risk increases the more time you spend outdoors, and roughly 1,500 cases occur each year among world travelers.

The first step toward prevention is a conversation with your doctor, the CDC noted. Prescriptions are available that can prevent the disease, and wearing proper clothing can reduce the chances of a mosquito bite. Insect repellent can also be an effective way to prevent malaria. In addition to these measures, you should also be careful when sleeping. Many bites occur during the night, and people are infected while spending time outdoors. With that in mind, it is best to sleep inside screened and air conditioned rooms whenever possible. If your room is exposed to the elements, consider a bed net to prevent mosquitos from getting to you while you sleep.

Above all else, you should report any symptoms you experience immediately. In some cases, fevers don't present themselves until a year after infection, so keep that in mind once you return to your home country. International health insurance plans can also cover any costs you may have while living and working abroad.

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Wednesday, May 21, 2014

[INDUSTRY NEWS] International shipping industry requires planning, protection

Shipping high-value good throughout world is fraught with risks and challenges, and given the number of hazards international businesses must prioritize safety and security.

Shipping high-value goods throughout world is fraught with risks and challenges, and given the number of hazards, international businesses must prioritize safety and security. While international transit & cargo insurance is one of the best lines of defense against a loss of assets, there should be other measures taken as well to ensure an efficient operation. 

In today's tense global climate, problems could arise in many different locations. Companies shipping goods by aircraft, truck, ocean vessel, barge or rail may encounter difficulties thanks to piracy, thieves, accidents or even acts of war. Implementing an effective risk management strategy will help prevent critical business interruption from any one of these instances.

All cargo could be targeted
It doesn't take a shipment of high-priced electronics or pharmaceuticals to draw the eyes of would-be thieves, according to Heavy Duty Trucking. Criminals today
could target any cargo, and this threat illustrates just one potential problem run into by international businesses.

"They'll steal anything," Walt Fountain, Schneider National's director of enterprise security, told the news source. "A lot of the more common items like toilet paper, diapers, you'll see some of those products stolen, then sold through small independent groceries in large urban areas."

In order to help ensure that every shipment goes off without a hitch, Heavy Duty Trucking recommended that companies screen employees, train them, and practice in-transit security measures. Doing so could help prevent a serious accident or attack, and ensure that all cargo reaches its destination intact. 

Proper safety starts at the beginning
Adhering to industry regulations and other common safety measures is extremely important for all companies shipping throughout the world. According to the World Shipping Council,
this will best protect cargo, and it could provide additional positive benefits for the businesses.

For starters, not all goods can be shipped in similar containers, the news source noted. Prior to transport, the most effective type must be chosen to make sure that the cargo reaches its destination safely. Then, a pre-stow plan should be completed to analyze potential hazards, including weight, volume and load limits. Improper stowing can cause serious problems during transit, so all containers should be stored correctly to avoid these hazards. 

Overall, it is incredibly important to take time to double-check safety and security prior to shipping any cargo. The transit process can be complicated for many reasons, and international cargo insurance will help cover any expenses that could jeopardize the continued operations of your business.

Clements Worldwide has over 65 years of experience protecting international organizations with transit and cargo insurance and other critical lines of coverage. Email request@clements.com today for a quote. 

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Tuesday, May 20, 2014

CFO Magazine interviews Tarun Chopra, Clements CFO






The CFO as Risk Manager — and Vice Versa

Risk managers and finance chiefs share a concern with loss frequency and severity, an insurance industry CFO says.

May 20, 2014
CFO.com | US
By David M. Katz

How much does the job of CFO involve risk management? That’s a question that can yield as many answers as there are finance chiefs, risk managers and companies. For CFOs of small to mid-size firms, it may well involve the direct purchasing of insurance or the supervision of an insurance broker. At somewhat larger companies, corporate risk managers, charged with buying insurance, may report to CFOs, who manage the company’s risks from a more strategic perspective. The distance between the finance chief and the risk manager tends to broaden considerably at the largest companies, with the risk manager reporting to the treasurer, who in turn reports to the CFO.
Rarely, however, are they the same person. But that indeed has been the situation for Tarun Chopra for the last four years. Like many of his peers, Chopra, the CFO at Clements Worldwide, an insurance brokerage headquartered in Washington, D.C., that has an international bent, is responsible for finance, accounting, mergers and acquisitions, treasury matters and information technology.
That’s a normal run of CFO activities. What’s different for Chopra is his intense focus on compliance, regulation and, especially, risk management — which he calls the “shield” protecting all his other activities at the firm.
Tarun Chopra, CFO, Clements Worldwide











Before arriving at Clements, which has offices in London and Dubai, Chopra worked at Fannie Mae, where he learned a great deal about financial risk and crisis management. For a year during the financial crisis, in fact, he led the finance and accounting operations of the newly created HASP (Homeowner Affordability and Stability Plan) division within Fannie Mae. As the CFO of Fannie operations on the project from 2009 through 2010, he built a finance organization to manage, analyze and report financials related to $50 billion in projected U.S. Treasury payments.
Before that, he held financial positions at Whirlpool, rising to the post of interim controller. In a visit to CFO in April, Chopra explained his views on such matters as the changing nature of regulation, the difference between disaster planning and crisis management and how being the CFO as well as the risk manager may not be a contradiction in terms. An edited version of the conversation follows.
Describe your various tasks.
Clements does business in 170 countries, which means I have to keep track of all the regulations. The majority of my time is spent in the finance and accounting space as well as risk management, which is in itself now a whole body of work.
I characterize my job as being divided into three buckets. There is the financial piece of making sure we have proper audits and report our financials on time. And then there’s the business aspect: how I support the president and the CEO of the company and help improve the business model.
Shielding the other two elements is the risk management and compliance part of the job. The compliance part largely involves making sure that the business licenses we get from the U.K. Financial Conduct Authority [FCA] and the Dubai Financial Services Authority [DFSA] are in proper shape. The sales producers have to have get their own insurance licenses to sell the insurance. But from a company standpoint, I’m tracking all the licenses. I’ve got to make sure that everybody who gets on the phone has them, because not having one is big no-no.
More broadly, our approach to risk management and regulation is that, rather than fighting regulatory compliance, we’ve embraced it. If you look at how regulation has trended, it used to be a cost of doing business. I think we’re now transitioning into a phase where it’s a business necessity to be good at it. We try to understand the underlying intent for any regulation to come out; regulators normally have a positive intent. But it may not be practical for them to think of all the possible implications of a piece of regulation, and that’s where you get into trouble. When you have a regulation that is incomplete or subject to unthought-of scenarios, you run into challenges. So I’m spending a lot of time on solving compliance disagreements among clients, underwriters and us.  You have to have the confidence of your clients, be on good terms with the regulators and try to be a better business partner with the insurance carriers.
Do you provide coverage for corporations or for individuals?
We provide insurance solutions to businesses and individuals outside their home countries. At one end of the spectrum, we provide [life, health and auto] insurance for expats on assignment or “lifestyle expats” who are often post-retirement but may also be doing some work. A U.S. lifestyle expat might have homes in Italy and the United States and spend six months in each country: They’re not tourists, but they’re also not citizens of the foreign country. At the other end of the spectrum we provide kidnap-ransom coverage to corporations, security contractors, non-profit and charities in places including the Middle East and sub-Saharan Africa.
To what accounting regimes do you report, and what accounting standards do you use?
Since we’re a privately held, family owned company, we don’t file with the SEC. But we follow [U.S.] GAAP in the United States, since our parent company is headquartered here. In the United Kingdom we follow U.K. GAAP. Dubai is actually an anomaly. We thought we would have to file there in U.K. GAAP, but we were pleasantly surprised that they let us follow U.S. GAAP.  That enables us to denominate our reporting in U.S. dollars as opposed to the dirham. From an accounting standpoint that is heaven, because I don’t have to do a double conversion.
Does your firm, which is in the insurance business, actually buy insurance?
We do buy
kidnap-ransom, errors and omissions, and property insurance. But we buy it from our own brokers. Of course, we have go through the same underwriting process with insurers that any of our clients do.  For us it is very important, both when we buy insurance and when we sell it to our clients, to remember that what really matters is what you’re doing in a particular place. We’ve got three offices in low-risk areas, but they’re different. For instance, our risk is much lower in the United States than it is in London and Dubai, because we aren’t regulated in the U.S. but are regulated in those other places. You should also be aware of whom you’re insuring, even in a low-risk place like the U.S. For example, diplomats aren’t very risky because they have diplomatic immunity. While employees of a service company might be more subject to greater liabilities than diplomats, their high levels of education make them a relatively low risk. With employees of oil and gas companies overseas, there’s an added layer of risk because you can be shut down tomorrow.
What’s your company’s approach to risk management?
In terms of risk management, as an insurance broker, we have to practice what we preach. The way we look at risk management is that any time a situation comes up, we look at whether it’s a disaster or a crisis. Both end up in losses – physical, personal or financial. The distinction is that a disaster is a single event, like an earthquake, flood or cyclone. A crisis is a situation which has happened and which is now out of control. So disasters are all about recovery; a crisis is all about management.
What’s the common ground between CFOs and risk managers?
One thing CFOs hate is variation, and risk management is all about reducing variation. At the end of the day, you’re both looking at expected losses. And the two elements of expected losses are: how likely is it that an event will happen and what will be the actual loss when it happens. Those are things a CFO is always worried about. If a plant in Nigeria or an oil field in Saudi Arabia is at risk of being damaged, what’s my loss on the books going to be? That’s the risk they’re trying to minimize.

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Wednesday, May 14, 2014

Clements Partners with Volvo Cars to Develop Exclusive Auto Insurance Programs

Clements Worldwide Partners with Volvo Cars to Develop Exclusive Auto Insurance Program for Expats, Diplomats
and the Military Worldwide
Expatriate, diplomatic and military customers based outside of their home country gain convenience, savings and key advantages with new, customized Clements coverage
                                                                        
Clements Worldwide announced today the launch of an innovative partnership with Volvo Car Corporation’s international sales, VCIC, aimed at delivering an exclusive insurance solution offering savings and protection to drivers living outside of their home country. By choosing to drive a new Volvo car while abroad, expatriate, diplomatic and military customers will now benefit from unsurpassed insurance coverage at competitive rates in part due to the partnership.

Image courtesy of Volvo Car Corporation
This important agreement is another example of Volvo’s globally-recognized industry leadership in promoting driver safety, customer value and peace of mind. By partnering with Clements, the insurer of choice for expatriates worldwide for more than 65 years, Volvo is uniquely positioned to deliver an excellent insurance coverage on its passenger vehicles sold through the VCIC division.

Clements’ coverage provides Volvo’s international customers with protection not usually available to them while driving abroad, such as cross-border insurance, high coverage benefits/limits and integration with Volvo’s dealer network. More importantly, the combination of Volvo’s enduring commitment to building the safest vehicles on the road combined with Clements’ global insurance expertise, Volvo’s customers will be assured of peace of mind worldwide.

Dante Disparte, Managing Director of Clements’ U.S. operations, considers this new alliance an industry example when it comes to delivering solutions and value to international customers. “Having served diplomat, expat and military customers since 1957, Volvo understand the difficulties drivers encounter when trying to secure auto insurance overseas. At Clements, we are honored to partner with such a venerable motor vehicle brand that’s widely regarded as the gold standard in driver safety.  Together, we’ll add a new level of protection, convenience and value, in the expatriate, diplomatic and military markets.”

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Tuesday, May 13, 2014

Clements and Bond Honour Leading NGOs with International Development Awards

Clements Worldwide, the leading provider of international insurance solutions, yesterday awarded the first annual International Development Awards to leading NGO and development organisations at a ceremony in London, in partnership with Bond, the UK’s membership body for over 400 international development organisations. The awards were presented by Justine Greening, UK Secretary of State for International Development.

Bond Awards 2014

Sponsored by Clements, the International Development Awards celebrate innovation and creativity in the development sector. Three winners, Street Child United, We Are Motivation and Safer World, were selected by expert judges from a competitive pool of small, medium and large sized organisations who submitted videos illustrating the positive impact of collaboration, echoing the 2014 Awards theme of effective partnership.

According to Ben Jackson, Chief Executive of Bond, “International development organisations are working with a range of partners from small, community-based groups to large companies. Together they deliver real benefits to some of the world’s poorest people. These awards are an opportunity for the winners to share their collaborative ways of working. Others can learn from them and we can all celebrate work so often hidden from the public eye.”

The International Development Awards are part of a larger partnership between Bond and Clements, who are again serving as the exclusive event sponsor of Bond’s Annual Conference. This year’s event in November will bring together top influencers and leaders in the development sector to discuss bold new insights and innovative approaches, including best practices about insurance and risk management.

Simon Townsend, UK Managing Director at Clements Worldwide, delivers opening remarks

Simon Townsend, UK Managing Director at Clements, said: “The team at Clements Worldwide is proud to support the prestigious International Development Awards, which highlight the true strength of collaboration. Similarly, we at Clements also work hard to provide our global NGO clients with mission critical international insurance protection and risk management, ensuring that they are able to continue doing their important work every day and giving them the highest levels of financial protection.”

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Friday, May 9, 2014

Tarun Chopra, Clements CFO, Featured in Wall Street Journal CFO Journal




May 9, 2014, 2:55 AM ET
By Emily Chasan, Senior Editor

Clements Worldwide CFO: Telling Crisis From Disaster

Tarun Chopra is the chief financial officer of global insurance provider Clements Worldwide.  He spoke with CFO Journal’s Emily Chasan about how to plan for potential crises and disasters, and how to know the difference.
Q:  As an insurer, your business is about mitigating risks for other people. How do you handle your own risk management?














A: One thing CFOs hate is variability in results and that is always the underlying concern from a CFO perspective. In the risk management space, you focus on how to control that variability. When we look at our risk management strategy, one thing we try to do is figure out what is a crisis, when it comes down to it, and how is that different from a disaster?  Both can have the same impact at the end of the day, but those are two very different things. A disaster is an event, but a crisis is a situation.
Q: If they have the same impact, what makes a disaster different from a crisis, and do you have to plan for each event differently?
A: Disaster is always about recovery, so that’s why you have a disaster recovery plan. A crisis always needs to be managed. Most well-managed companies are very good with disaster recovery plans. If there’s an earthquake, a flooding, or a tsunami, you have a business continuity plan and most companies are great at coming up with those plans. They think through it. But crisis management is an area where companies don’t tend to focus a lot of time and effort. They don’t have that same realization. As managers and individuals running the company, you feel confident and you feel proud of the fact that you can manage through a crisis, and most companies do that. But more often than not you don’t make your best judgments when you are in that crisis.
By definition a disaster is very specific. It’s either a natural disaster or man-made disaster. You can define it. In a crisis, there is no limit. There is no specific categorization. It can range from the Target data breach, to Coca-Cola introducing “New Coke,” to an employee going rogue and saying something online. The kind of crisis varies, but if you have key mitigation plans in place you know what your course of action is going to be in any sort of crisis. You have to have gone through the thinking as to how best to mitigate it.
Q: How can you do that internally? Is it something you’ve been able to implement on your team?
A: Ideally, what you should be doing is having a crisis management plan much before a crisis occurs. When you’re working with a cool mind and you’ve thought through different possibilities you tend to come up with better solutions and better plans for mitigating that crisis. When a crisis hits, you should not be spending your time thinking of solutions, you should be spending your time implementing those solutions.
That’s something we are seeing more of, and that’s something we have embraced at Clements. We have our own business continuity plans, but from a crisis management perspective we look at potential scenarios that can impact us. One of the things that we look at is something like the Target data breach. When incidents happen, we say, ‘Okay, what if that happens to us.’ We are not in that crisis, but given the fact that it has happened to others it can happen to us. It’s like a fire drill. You’re basically going through a drill and saying, if something like that happened to us, these are the steps we would take.
Q: How regularly do you do this, and is this just a finance team exercise or do you get involved with other groups in the company?
A: We’ve got a thought leadership group that comes together anytime an event like this happens. It’s not just on the finance team. This is much bigger than the finance team. This is strategy.
The finance team comes into play for the actual loss. For example, they’d go through an exercise and say if you were Target, how do you estimate what is the actual value impact? If a company had a publicity crisis, what impact would it have on our sales and what impact would it have on our costs?
It’s more than just the financial piece and the revenue and sales. A lot of crisis impact is on intangibles, like your brand value and your customer value and those are difficult to project. But if you build a framework around it, at the end of the day, everything can be translated into revenue and expenses. You make educated guesses.
Our planning cycle is updated just like any other company on a quarterly basis. We update our crisis planning on any potential changes in the market.
Q: Are there any other units where you’re using this type of planning and role-playing strategy?

A: We tend to focus more and more time on compliance. That has become a big theme for us, so much so that we have set up our own compliance group, which is pretty much on a day-to-day-basis taking care of compliance needs. Just like you have your marketing arm, which is doing market research and watching out for competitor’s moves, you have the compliance team watching out for regulatory moves and regulatory needs. They stay on top of what’s changing from a regulatory and legal perspective so we can plan for it.

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Thursday, May 8, 2014

[INDUSTRY NEWS] Affordable cities for expats found across the globe

Affordable cities for expats found across the globe
When making the decision to move outside of their home country, expats are faced with a plethora of choices and a wide range of destinations. In many countries, cost of living can be extremely high.

When making the decision to move away from their home country, expats are faced with a plethora of choices and a wide range of destination options. However, in many countries, the cost of living can be extremely high, making it additionally difficult to find an enjoyable job, an affordable home and accommodate for the expense of international insurance.

Fortunately, many cities across the globe are both inexpensive and attractive for expats. Below are a number of cultural hubs which offer exceptional job opportunities, making them potentially desirable destinations for expats.

Affordable cities exist for expats
Recently, website Xpatulator.com
compiled a list of the best cities for expats to find opportunities while still saving money. A number of the most popular locations have seen costs rise, so it may be prudent to explore other options before moving outside your home country.

According to Xpatulator.com, one such city is Dailan, China. This metropolis is often overlooked as an expat destination, but it has a large number of foreign workers and has a very low cost of living, especially compared to Shanghai and Beijing. The price of a luxury three-bedroom apartment in Dailan is roughly half of a similar property in Shanghai. Another possible city for expats is Budapest. The Hungarian capital has very affordable food, drink and housing expenses. Other cities that made the list include Cape Town, South Africa and Calgary, Canada.

Middle Eastern countries are expensive
In sharp contrast to some of the more cost-effective expat destinations out there are countries in the Middle East. A recent report released by the Bharat Book Bureau
looked at six nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The most expensive on that list was Qatar, the news source noted. This is due to its tight rental market, limiting the number of inexpensive housing options for citizens and expats alike. In addition to costly homes, Qatar is also the priciest for vehicle rentals.

The amount of money needed to rent a small sport utility vehicle in the country is roughly twice that of the UAE. This high cost of living could persuade expats to seek other countries in the Middle East, or throughout the world.

Regardless, international insurance is a must for anyone moving outside their home country. A lack of coverage could put expats living and working outside their home country unprepared for expenses incurred abroad.


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Dante Disparte, U.S. Managing Director at Clements, Partners with American Security Project to Address Latest Developments in U.S. and Egypt Relations

Clements Worldwide Partners with American Security Project to Address Latest Developments in U.S. and Egypt Relations
Clements U.S. Managing Director Dante Disparte joins leading
policy makers in Washington D.C. to discuss how U.S. and Egypt
relationship impacts international community
                                                                        
Dante Disparte, U.S. Managing Director at leading international insurance provider Clements Worldwide, joined a panel of influencers, academics and policy makers yesterday to discuss the current state of Egypt, ongoing challenges for its government and the future outlook for its open and competitive economy.

Dante Disparte, US Managing Director at Clements Worldwide, delivering remarks at a American Security Project panel event

The day-long session also featured prominent speakers like H.E. Amr Moussa, former Secretary-General of the Arab League, Lieutenant General John Castellaw UMSC (Ret.), General Carter F. Ham USA (Ret.), Youself Al Otaiba, the United Arab Emirates Ambassador to the United States and former Congressmen Jim Kolbe and Norm Coleman.

Panelists focused on the economic potential of Egypt, where continued investment from nations around the world will be key to the growth and the sustainability of the country, bringing stability to the region and encouraging domestic entrepreneurship.

Disparte, a current member of the American Security Project’s advisory board, specifically addressed three important risks to be aware of while investing in the country:
  • Uncertainty about the country’s future leads to risks both individuals and international organizations need to be insured against;
  • Ongoing political and economic changes may require additional political violence protection, personal accident and group coverage, including commercial property insurance;
  • Such volatile circumstances may not be specific to Egypt but also relevant and applicable to neighboring countries in the region.
According to Disparte: “The future of Egypt clearly represents strong investment potential for global organizations. For businesses looking to operate in Egypt, being prepared for the unique economic and political conditions in the country and the surrounding region will be paramount to their success.”

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Tuesday, May 6, 2014

Clements CFO Tarun Chopra talks to WSJ CFO Journal about Currency Risks

May 6, 2014, 2:35 AM ET

By Maxwell Murphy, Senior Editor

Violent currency swings are the new normal for finance chiefs, forcing them to go beyond traditional hedging strategies.

Currencies in at least 20 countries have fallen 6% to 37% against the U.S. dollar over the past year. The economic turmoil in Argentina and Venezuela and the conflict between Russia and Ukraine have hit their currencies, as well as the first-quarter earnings of dozens of international companies, such as Avon Products Inc., Coca-Cola Co. and Ford Motor Co.
To augment or replace hedging programs, more CFOs are rethinking their relationships with suppliers and distributors, their corporate structures and, when they can get away with it, their prices.
“Companies have never been as exposed as they are now to the violent movements of foreign currencies across the globe,” said Wolfgang Koester, chief executive of FiREapps, which advises clients on currency risk.
That’s partly because smaller companies and even startups are selling abroad, he said, and larger companies are penetrating faster and deeper into emerging markets. Roughly 98% of U.S. exporters are small and medium-size companies, according to the U.S. Department of Commerce, though they represent less than a third of the value of American exports.
Companies typically hedge to protect their profits by buying contracts for the option to buy or sell currencies at a fixed price in the future. But the more volatile a currency, the more costly the contract, making that a poor long-term solution.
The increasingly sophisticated approaches companies are taking to manage their currency exposures are why an April 2013 survey by the Bank for International Settlements showed that corporate foreign-exchange trading had fallen 50% from the bank’s previous survey in 2010.
Of course, renegotiating business contracts or finding new suppliers takes time, and a currency swing can come suddenly.
Russia’s ruble has tumbled 8% against the dollar since January and has been mentioned in more than 115 company conference calls, according to FactSet. The drop is a problem for McDonald’s Corp. restaurants in Russia, which import almost half of their food and typically pay for it in dollars or euros.
“If you assume the ruble is going to stay at this depressed level, that’s something we’re going to be battling with for the rest of the year in our European margins,” Chief Financial Officer Peter Bensen told investors recently on a conference call.
To help offset the ruble’s decline against the dollar and euro, Alexey Kornya, CFO of Mobile TeleSystems OJSC, said the Moscow-based cellular carrier is asking certain foreign suppliers to accept payment in rubles.
By contrast, Air Tractor Inc., a closely held Olney, Texas, maker of crop-dusting and firefighting aircraft, has “lost sales” in places like South Africa recently, because it demands payment in dollars, said CFO David Ickert. In the past year, the rand has fallen 15% against the dollar.
Nicole Anasenes, CFO of Infor Inc., a New York-based business-software provider, said she might consider accepting payment in a foreign currency, but only “if it’s an existing customer,” and she could use the money locally for salaries and other operating costs.
Having strategically placed subsidiaries overseas can help insulate companies from currency swings.
When Northern Technologies International Corp. expanded into nearly two dozen countries, including Russia, Malaysia and Indonesia, the Minneapolis-based maker of anti-corrosion packaging materials, took on local partners. The strategy initially was about growth, but CFO Matthew Wolsfeld said it helps to offset currency volatility. If need be, the company’s joint ventures can leave cash in countries with weaker currencies and extract it from those with stronger currencies.
Mr. Wolsfeld said the firm is most affected by the euro’s swings, and has used the euro’s recent strength to pull dividends out of its German joint venture.
Sometimes, currency changes leave companies with little choice but to raise prices, which can be especially hard to do on discretionary products or those on which a local competitor isn’t facing the same margin squeeze. A company’s best hope is that its rivals will have to do so too.
That can happen with latex gloves, most of which are made in Malaysia, whose currency has weakened 7% in the past year. When currency swings prompt local vendors to raise prices, medical-products suppliers like Henry Schein Inc. typically raise prices in lock step. Where Henry Schein can pass prices along, it does, said CFO Steve Paladino.
Regardless of their hedging strategy, currency volatility is a fact of life for international companies. “You almost have to have a foreign-exchange [emergency room],” said Tarun Chopra, CFO of insurer Clements Worldwide, which may move some operations outside the U.S. to reduce the impact of currency swings. “There is no point in pegging everything back to the dollar.”
Situations like the military friction on the Crimean Peninsula had “historically been one-off events,” with a 5% or less risk of occurring, Mr. Chopra said, but they are “now becoming part of the 95%.”

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Clements term life product for MENA expats featured in International Adviser

Clements Worldwide brings expat cover to MENA region
By Simon Danaher



Washington DC headquartered Clements Worldwide has launched a guaranteed issue term life insurance product into the Middle East and North Africa region. 

The US company, which has built its reputation on insuring government foreign service workers as they move around the world, opened an office in Dubai in March last year, and has since been building relationships with local brokers. 

The new product, Guaranteed Issuance Term Life Insurance, will initially be offered to consumers through brokerage, Globaleye, which is headed by Tim Searle, although Clements said it is planning to roll out the product in due course with a number of other brokerage firms. 

The Guaranteed Issuance Term Life Insurance product offers cover for up to $500,000 (£297,341), with no medical test or underwriting, coverage against death as a result of illness, accidents and acts of war and terrorism. It is valid regardless of where in the world the client is. 

Christophe Allafranco, head of sales and business development for Clements Worldwide Dubai, said: “Our best-in-class international term life product is specifically designed to offer financial security to the families of expat individuals in MENA who are living and working outside their home country.

“We look forward to bringing additional innovative solutions to our customers via our partners over the coming months.” 

Clements Worldwide provides international car, property, life and health insurance, and specialty and high risk cover. It was founded in 1947 by husband and wife team Robert Clements and Juanita Guess-Clements, the latter of which was employed by the US Department of State. It is through this link the company began offering insurance solutions to international workers of the US Government. 

Clements Worldwide now has offices in Washington, London and, more latterly, Dubai.

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