Profiling political risk

A major global player in the pharmaceutical industry wanted to define and prioritise its responses to key political risks. Containment of these risks had been identified as a significant factor in achieving corporate objectives. 
 
Zurich’s strategic risk consultants were asked by the company’s Head of Corporate Affairs to conduct a series of 30 structured interviews with senior managers, functional department heads, and advisors. Zurich collated the results into a comprehensive set of risk issues, and generated over 50 separate scenarios to characterise all the risks. These formed the basis for a political risk profiling workshop attended by 30 senior executives from around the world.
 
To facilitate the work of these delegates on the day, the risk scenarios were grouped under 9 headings, and a high-level risk scenario was drafted for each risk category under the headings of Vulnerability, Trigger, and Consequences. Zurich’s Total Risk Profiling (TRP) process was used in the workshop to complete the scenario catalogue and to achieve consensus on the rating of each risk for potential impact and likelihood. The delegates went on to define a corporate risk appetite for these key political risks, and to suggest appropriate responses to contain their effect on the business.
 
The Zurich facilitators encouraged serious debate and open exchange of information between delegates throughout the workshop. This resulted in much improved mutual understanding of political risks, and agreement on appropriate management action.
 
The subsequent reports prepared by Zurich were used to allocate responsibility for continuous monitoring of the risks, and to focus a fully co-ordinated response to the most significant political risks over a ten-year time horizon.