1. Global risk mapping
The Zurich Risk
Room Approach
Daniel M. Radulovic
Proposition Manager for the Zurich Risk Room
Zurich Insurance Group, Zurich, Switzerland
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2. The Zurich Risk Room Methodology
Zurich’s proprietary country risk
assessment tool
Combines vast amounts of data
Monthly data, primarily from public
sources, for over 150 countries,
covering 80+ individual risks,
across 6 broad categories:
− Business
− Economic
− Geopolitical
− Environmental
− Social
− Technology
With a risk correlation matrix
Used to illustrate the complex
interconnectivity between different
types of risks and model forward
looking scenarios
Provides an intuitive visualization
of the complex risk modeling data
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3. Holistic country risk mapping requires a tailored approach:
A study of 3 Eastern European countries: Albania, Czech Republic, and Hungary
Example #1: Country Credit Worthiness
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• Typical measure, used by many
corporations as a proxy for overall country
risk
• Primary focus:
• Countries’ ability/ willingness to repay
sovereign debt
• Downside:
• Limited in scope
• Could overlook important risk
exposures relevant to particular
industries or individual businesses
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4. Holistic country risk mapping requires a tailored approach:
A study of 3 Eastern European countries: Albania, Czech Republic, and Hungary
Example #2: Focus on Food and Beverage industry
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• Included additional risks such as:
• Exposure to rising food prices, Exposure to
rising oil prices, Burden of government
regulation, Paying taxes, Employing
workers, etc.
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5. Holistic country risk mapping requires a tailored approach:
A study of 3 Eastern European countries: Albania, Czech Republic, and Hungary
Example #3: Focus on Manufacturing Industry
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6. To learn more, download the free Zurich Risk Room
mobile apps:
A simplified, demo version of the full
app
Contains 5 predefined scenarios on:
−
Macroeconomic Imbalances
−
Political Volatility
−
Nat. Cat. and Disaster
Management
−
Supply Chain Disruption
−
Demographic Shifts/Longevity Risk
Provides the ability to model changes
in individual risks to see how they
impact other interconnected risks
Available free of charge to the general
public
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