News & Media

Monday, June 30, 2014

Smita Malik, Assistant VP of Programs and Special Risks, discusses insurance in Iraq with CBS MoneyWatch

As Iraq Splinters, Companies Can’t Get Insurance
By Jonathan Berr
June 27, 2014
The Islamist insurgency in Iraq is making it increasingly hard for multinational corporations doing business there to protect themselves from financial loss.
Companies are finding it next to impossible to get so-called political risk insurance, which many buy to guard against the danger of their property being nationalized by a foreign government or from being damaged through acts of violence, among other reasons. Coverage against kidnapping and extortion, which unlike political risk coverage insures people rather than property, is more easily available, although premiums are on the rise.
"The already limited market for Iraq coverage has for all intents dried up, in light of recent events," Stephen Kay, U.S. practice leader for political risk at Marsh & McLennan, an insurance broker, told CBS MoneyWatch. "If one was to seek a large political risk insurance limit to cover say a power plant worth $40 million, there would be near to zero chance of getting that coverage today, regardless of price."
Policymakers and big companies hoping to profit from the billions being spent on rebuilding Iraq have been caught off guard by the speed of the advance by the insurgents, known as the Islamic State for Iraq and Syria (or ISIL, depending on the translation). The U.S. government is discouraging people from traveling to Iraq and has warned remaining civilians in the country to be prepared to evacuate on short notice.
James Thomas, head of credit and political risk at Zurich Insurance Group, the world's largest underwriter of such coverage, which companies often get in doing business in developing countries such as Brazil, India, Russia and China.
"We have gotten some inquiries about coverage." Thomas said, but noted that the insurer is telling these companies "no thank you."
AON, another brokerage firm, also has recently stopped selling political risk insurance.
"We are not getting a land rush of calls, but there are a number of them coming in," said Roger Schwartz, senior vice president at AON. "The simple fact is is that coverage in Iraq is going to be impossible or very, very hard to get."
Smita Malik of Clements Worldwide, an international insurance company, told MoneyWatch that coverage might be available in areas of Iraq that remain stable, such as Basra in the far south of the country. But that would likely only be for existing clients, she said.
Most of investment in Iraq is tied to the oil and gas industry. Companies like BP and ExxonMobil tend to self-insure because it would be too expensive to buy private insurance for their facilities there.
Security, not surprisingly, is a huge issue in Iraq. The U.S. government recommends that companies that do business in the country hire bodyguards, which can cost several thousand dollars a day. The quality of the company's security can factor into the premiums they pay for their Iraq operations.
Kidnapping and ransom insurance is also hard for companies to obtain in Iraq, with insurers demanding more detailed information on companies' security practices. 

To view this article in PDF, click here.  
Clements Worldwide has been helping international organizations manage risks and protect their assets for over 65 years. For more information, reach out to 

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Thursday, June 26, 2014

Laura Schauble, Associate Director of Commercial Insurance, Featured in Post Magazine

Isis Iraq insurgency set to push rates up amid fears unrest could spread

Insurance rates in Iraq are expected to climb following the insurgency by Sunni militant group Islamic State of Iraq and the Levant, amid suggestions the violent unrest could spread into neighbouring countries.

24 Jun 2014
By Francesca Nyman

The group, which wants to create a hardline Sunni Islamic State within Iraq and Syria, has made territorial gains across northern Iraq since the beginning of June, killing at least 1075 people, according to the latest figures from the United Nations.

Isis has specifically targeted oil fields in the north and claimed this week to have wrested full control of the Bajii oil refinery from the Iraqi military.

Simon Cassey, senior vice‑president at Lloyd’s broker Chesterfield, told Post the business line that has been most impacted thus far is the previously “fairly unpopular and relatively cheap” political and emergency evacuation cover.

He said: “We’ve had a number of enquiries about evacuation from oil and gas firms that want to get their employees out but most insurers [that were providing this cover] have stopped writing it, so companies [that have attempted to purchase cover] are trying to get their people out without any insurance.

“Personal accident rates have been coming down in Afghanistan and Iraq but they may have now hit rock bottom. I suspect personal accident rates in Iraq for security firms, engineers and other oil and gas employees will go up.

“We’ll definitely see some hardening of terrorism rates, if indeed [policies are] renewed at all. It will become an area of conflict for many years to come.”

Laura Schauble, associate director of commercial insurance at war and terrorism specialists Clements Worldwide, said while political evacuation policies and political violence policies, such as a personal accident including war risks, have been impacted, other lines have also been affected.

She told Post: “Most insureds are looking at the same type of concerns as they would for any business interruption risk. It’s similar to if there was some kind of natural disaster. You have some of the more mundane policies coming into play also to make sure that insureds can maintain their operations with as little interruption as possible.”

Differing geographic locations and levels of security mean firms are likely to be affected to different degrees by the violence, Schauble added.

“You could have one insured in a secured compound where they’re more sheltered and able to weather the storm, versus one that may be more affected by on-the-ground local level violence. There’s a big variety of responses and what insureds have to do,” she explained.

“Companies that made contingency plans regardless of where they were operating are typically the most equipped to deal with situations like this when they arrive.”

Clements is maintaining contact with clients to ascertain what kind of assistance they may require.
Schauble said: “To be prepared for any kind of loss, reaching out and working out what the situation is on the ground for that particular client makes a world of difference.”

She agreed there was likely to be some “reactionary pricing” in response to recent events but said it was unlikely rates would remain that high over the long term. 

“The least cost-effective insurance programme is going to be one based solely on purchasing decisions that are based on the most recent headlines,” she said.

“But we’ve been dealing with essentially a state of war in Iraq since 2003. There’s a great deal of actuarial data that informs the typical risks that a carrier is going to have in these locations.”

Further evacuations
According to Jordan Perry, principle Middle East and North Africa analyst at risk advisory company Maplecroft, the companies most at risk are those operating in the north, but this has not stopped firms operating in other parts of the country from looking to evacuate employees.

“We’ve seen Mosul fall to Sunni Islamist militants and now they’re in the position to move further eastwards and threaten assets across Nineveh plains, which includes the Exxon Mobile Holdings,” he said.

“We’ve already seen several oil and gas firms removing non-essential personnel. While investors are aware that there’s not a major threat to the Basra gulf, the significant gains Isis have made have nevertheless spooked them and they are seeking to mitigate this impact if possible.”

Though the immediate risk to physical assets remains a major concern, the recent crisis has the potential to spiral into an even larger political incident if Isis continues to make gains, Perry warned.

“One concern from a risk and insurance perspective would be political stability. Further advances by Isis would complicate [Prime Minister] Al Maliki’s ability to hold on to power and secure a third term.”
Other border countries could also become embroiled in the unrest, threatening assets across the region, he explained.

“We’ve seen Isis threaten to move onto Jordan after Iraq. [The unrest] certainly has the capacity to spread.”

To view this article in PDF, click here

Clements Worldwide has been helping international organizations manage risks and protect their assets for over 65 years. For more information, reach out to 

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Tuesday, June 24, 2014

[INDUSTRY NEWS] Risk management, international insurance vital for oil and gas sector

Lackadaisical safety and security policies can cost companies millions of dollars in regulatory fines, environmental disasters and employee endangerment. Risk management is difficult enough for domestic companies, and it becomes even more complex for international organizations with a large workforce overseas.

One industry with these types of concerns is the oil and gas sector. Employees are tasked with the exploration, retrieval, refining and transporting of oil and gas. This highlights the need for comprehensive international insurance that can help cover these aspects, and without proper protection the financial well-being of any organization could be in danger.

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Tuesday, June 17, 2014

[INDUSTRY NEWS] Five Tips for Living and Working Abroad

While there is a certain allure to traveling the world and experiencing new countries and cultures, many people forget is that there is a very big difference between being a tourist and an expat. The latter often brings more legal requirements, paperwork, responsibilities and risk. However, the rewards are great, as long as the proper steps are taken beforehand.

One of those includes acquiring adequate international insurance coverage. A long-term stay and potential employment opportunities bring a host of challenges unlike those that domestic workers experience. Therefore, having the right protection in place can make life overseas more comfortable for you.

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Thursday, June 12, 2014

Clements Worldwide Partners with Research Consultancy i-World Research to Release Survey of 8,000 Global Expatriates

Clements today released the findings of the Expat Survey 2013, in collaboration with i-World Research, a research consultancy with over 20 years of experience in expatriate communications and media.

Supported by Clements, the Expat Survey 2013 results include responses from expatriates from 128 countries, many of whom reported surprising insights about life abroad. Issues like understanding a new tax system, finding the right school for children and learning a new language are now considered much more easily surmountable with the right tools and advice.

For example, 63 percent of respondents found that organizing finances when abroad was an easy task, and 61 percent also considered securing healthcare insurance easy when first moving out of their home country. Similarly, 75 percent reported that they felt happy in their new country, while only 12 percent felt that their expectations had not been met. 

Notably, the majority of expats reported that financial planning and insurance protection is something they consider an afterthought, choosing to arrange these plans after landing in their new destination. In this instance, 55 percent reported securing health insurance after they moved and 64 percent indicated that they chose insurance protection for their assets and property after arrival. However, expats may still be more suited to making these decisions prior to departure, to ensure that they are able to select a comprehensive international insurance policy that offers the maximum level of protection.

Sergio Sanchez, Chief Marketing Officer at Clements, said: “The results of the Expat Survey 2013 clearly indicate that moving abroad is no longer a challenging or difficult experience but is a process that expats can find enjoyable and relatively straightforward. As global insurance experts, we have worked with expat clients every day for over 65 years to provide them with financial protection and peace of mind. This ensures that their experience moving and living abroad is as hassle-free as possible.” 

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Tuesday, June 10, 2014

[INDUSTRY NEWS] How to get an EU work permit

If you are a current citizen of a European Union member country, you're in luck! You don't need a work permit to find employment in another nation that is part of the EU. However, for many other people looking for gainful work, this crucial document is a must before moving to a new country. 

To make matters worse, many potential expats aren't too sure about how to acquire a work permit, otherwise known as a "Blue Card." The process can be long and complicated, and a misstep here or there could throw everything off course.

So, if you are interested in getting a job in the EU, it may be time to acquire a work permit. To help you out, click here for the facts you need to know

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Tuesday, June 3, 2014

[INDUSTRY NEWS] U.S. Expatriates: How to Avoid Mistakes when Filing Taxes

Tax season is complicated enough while living in the states, and it can get even more confusing for expats juggling forms in their host country and back home. As a result, an alarming number of people make mistakes - or forget to file altogether - and that can lead to costly fiscal penalties.

For many, the source of these tax problems is confusion. It can be hard to balance the demands of the IRS in the U.S. with the legal requirements and regulations of your current place of residence. To make matters worse, there is often a lack of guidance out there for expats.

To help make things go a little bit smoother for you, click here to read more about a few tips and tricks to get the most out of each tax season.

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