For years, geopolitics was not a real subject of attention for most businesses. The field was reserved for analysts, policymakers, and multinational corporations with distant interests. This era is evolving. Currently, geopolitics is no longer an external factor, but the framework in which businesses operate and, in some cases, must ensure their continuity.
The belief that risk always manifests itself visibly and measurably persists. In practice, it is often the opposite. Early signs of tension generally do not appear in quarterly results or margins, but in the conditions imposed by insurers and in lenders’ attitudes. Ignoring these signals often means being behind. Companies that wait for financial indicators are, by definition, in the wake.
What fundamentally distinguishes the current environment is not only the increase in risks, but their more diffuse and systemic nature. Focusing on physical damages – a factory, a ship, a facility – obscures the bigger picture.
The essential impact increasingly stems from disruptions: goods that do not arrive or arrive late, contract delays, late payments. It is rarely about spectacular failures, but a succession of infringements that slowly destabilize companies.
This is precisely where the risk lies. Because these disruptions not only affect the activity, but also the trust between partners, in the supply chains, and in the markets. Liquidity tensions are often the first visible sign, long before the operational impact fully manifests.
Also, the way credit is assessed is evolving. Historical performance remains important, but relatively less so. Financiers are paying more attention to current signals, such as payment behavior, transparency in the chain, contract flexibility, and structures.
Moreover, a new strategic concept is emerging: insurability. While insurance used to be the final step in a decision, it is becoming a prerequisite. Not all risks are transferable. This directly impacts the feasibility of certain projects and transactions. Companies that underestimate this aspect will face higher costs and may also be hindered in their ability to act.
In this context, solutions such as political risk insurance are also evolving. What was once a niche market is now an essential element and a strategic pillar. It not only serves as a safety net but as a catalyst – a way to facilitate transactions, investments, and projects.
The schedule is also crucial in this regard. Companies that start reflecting early have more options. Those who wait until the volatility is visible face a tougher market where conditions are less negotiable.
This dynamic challenges a fundamental principle of recent decades: maximum efficiency. Globalization revolved around optimization – cost reduction, supply chain rationalization, just-in-time deliveries. Currently, the focus shifts towards resilience.
Redundancy, diversification, and transparency are no longer a luxury but a necessity. This incurs additional costs, but the real question is: what is the price of inaction? In many sectors, this latent cost ultimately proves to be much higher.
However, this does not mean that markets are closing. Capital and insurance capacity are still available. But they become more selective, more critical, and evolve rapidly with changing circumstances.
The true fracture line is not between the absence or presence of risks within companies – this boundary does not exist in practice. It lies between organizations that understand, document, and proactively adjust their risk profile, and those who do not do so systematically.
In this context, passivity becomes a risk in itself. When the global situation becomes clearer, markets generally have already adapted – and part of the maneuvering margin has evaporated.
Geopolitics is no longer an isolated risk to manage among others. It is the broader framework within which all operational, financial, and strategic decisions are made. Companies that are aware of this expand their scope of action. Others play a game with changed rules.
– Jelle Cortoos, Head of Structured Credit and Surety, BeLux, Aon
