Strategic Advisory

The client: A multinational automotives manufacturer

The issue: Our client was looking for support to develop a monitoring system to identify and assess emerging risks in the automotive sector, with a focus on the markets of the UK, Brazil, India and China. Our client was seeking to implement a framework that would integrate the assessment of risks related to consumer trends, macroeconomic shocks and political stability into their internal risk management processes.  

Our solution: Control Risks worked together with two partners to develop a single solution for the client, leading on the political and geopolitical aspects of the requirement. Together we developed a framework based on risk signalling: threats are identified on a quarterly basis by our political risk analysts in our UK, US, Brazil and India offices, and assessed according to their velocity and potential impact on our client. Close co-operation with the client and our partners ensured the consistency and relevance of the methodology and resulting output. 

The monitoring scope encompasses a broad range of risk topics, including country- and sector-specific regulation (for example, tax, data privacy and ESG issues); geopolitical trends impacting the sourcing of critical minerals; and operational developments threatening supply-chain stability. A data-led insight tracker helps the client understand and monitor the phenomena driving the risks. Finally, Control Risks conducts a quarterly workshop with the client team to discuss the findings.

The result: Our assessments are helping our client to navigate the implications of each risk signal and improve their resilience to potential shocks impacting their business activities.   

The client: A multinational insurance company

The issue: Our client asked Control Risks to contribute to its thought leadership, in the form of marketing material highlighting political and economic risks to its own clients in a range of sectors.

Our solution: Alongside our partner Oxford Economics, we provide quarterly reports focusing on risks to key sectors, such as life sciences, construction and international trade, in key markets for our client in Europe, North America and the Asia-Pacific region. The reports give a visual overview of relevant economic data, accompanied with to-the-point analysis of how we view political and economic risks affecting these sectors over the coming year. We also provide practical advice for mitigating these risks.

The result: With the first round of reports published, our client has received positive feedback from its own clients, as well as media coverage of our analysis.

The client: A financial institution

The issue: Our client was seeking to set up their investment strategy in Eastern Europe in the context of the war in Ukraine. They were looking at investment opportunities in the telecommunications, infrastructure, agriculture and energy sectors in seven countries (Ukraine, Moldova, Romania, Hungary, Slovakia, Czechia and Poland). They were also interested in gaining a deeper understanding of the relationship between these European countries and other regional investors, so as qualify any potential opportunities and risks from collaborating with other foreign businesses.

Our solution: Control Risks first analysed the economic, supply chain, infrastructure and societal impacts of the conflict on the seven European countries. In that context, we assessed where national authorities would focus their reconstruction efforts and in what sectors and projects foreign investment would be sought. We accompanied this with an overview of relations between the seven countries and other parts of the EMEA region, creating an analytical matrix that evaluated the level of maturity of these relations. Finally, we highlighted the key areas for potential investments and collaboration with local authorities in the coming five years.

The result: Our analysis has helped to inform our client’s strategic decision-making for the coming years, specifically by enabled them to navigate the changing investment environment in new markets in Europe, and identify viable opportunities. 

The client: A multinational insurance company

The issue: Our client approached Control Risks to develop a more nuanced understanding of the war risks that it was underwriting. It specifically wanted to find a way to rate key countries and sub-national regions against more granular conflict scenarios so that it could underwrite greater exposure. 

Our solution: Control Risks developed a methodology for evaluating and benchmarking war risks and assessing the likely impact of different conflict scenarios on the client’s book of business. We started by collecting and analysing information provided by the client on historical losses incurred in previous bouts of political violence. We used this to develop a series of scenarios reflecting the impact of different types of conflict, the kinds of modus operandi and weaponry used, and the potential damage caused. Control Risks’ regional analysts then applied these scenarios to each of the countries and sub-national regions of interest to the client. This was kept updated at regular intervals pre-agreed with the client to keep it abreast of significant developments. 

The result: As a result of the benchmarking tool and regular updates, our client was able to better understand the potential risks associated with underwriting policies in conflict zones or areas that could be affected by political violence. It was able to make more judicious decisions about premiums and underwrite greater exposure for increased commercial return, all while providing better support to its own clients.

The client: A major debt finance company

The issue: Our client was evaluating its long-term investment exposure to inform decisions on portfolio structuring and revisit existing projects to ensure that they remain within the organisation’s risk appetite levels.

Our solution: Our analysts worked with the client to build regional scenarios that could have a significant impact on its assets in its regions of interest. We focused on low likelihood, high impact scenarios to provide the client with the most credible scenarios that could have a meaningful impact on its projects, alongside a list of potential scenario drivers that could be monitored by the client. Together with the client, we put together a combination of regional scenarios (involving regional conflict, for instance) and country-specific scenarios based on different triggers (such as low oil prices, widespread protests and leadership succession).

For each scenario we created a scenario card that covered:

• Main assumptions
• Key drivers
• Narrative of developments
• Ratings of likelihood and of potential impact on the client’s project
• Potential to trigger another one of the scenarios identified (domino effect)

The result: Our client uses these cards to inform its internal assessment of each project’s exposure to political, operational and security risks in the relevant region. They also use them to monitor key drivers for each scenario to adjust likelihood levels.

The client: A financial institution 

The issue: Our client approached us after having identified a requirement for a new framework for monitoring security risks to the company’s operations globally. 

Our solution: Control Risks produced a global security risk report, drawing information from open sources, in-house knowledge, proprietary databases and source networks. This identified existing and emerging geopolitical, societal, environmental and technological threats with the potential to impact financial institutions and specifically our client’s business operations. We adopted an adversary threat assessment approach to identify the widest range of security threat sources, and then assess each in terms of their intent and capability to pose a threat to our client’s key assets. This included their headquarter offices, support locations, retail branches and automated teller machines (ATMs or cash machines) and other centres. While providing a global overview, the assessment included additional detail on threats in countries of greatest concern to the client and where it had the largest operational footprint. We updated the report on an annual basis to reflect the changing threat environment. 

The result: This assessment helped our client to better understand the global threat environment and the implications for its operations and personnel. Annual updates using the same methodology are allowing our client to identify evolutions in the threat environment over time.