Robert Szmigiel | According to survey conducted by Marsh McLennan (NYSE: MMC), a global leader in risk, strategy, and people, during a recent webinar for Canadian risk managers and financial professionals, 61% said their organizations were controlling costs to better navigate the disruption and uncertainty of the current geopolitical and trade environment. The other top strategies organizations are employing include looking for alternative suppliers (47%) and scenario planning and testing (43%).
“It’s no surprise that companies are controlling costs to better navigate the current economic environment, but organizations could be doing more to understand and model the long-term impacts of these policy changes on their bottom lines,” says Lexie Kindbom, Chief Client Officer, Marsh Canada.
During the webinar, Navigating Geopolitical Risk and Uncertainty: The Impact of Changing Trade Policies on Canadian companies, a panel of Canadian risk, insurance, and economic experts from the Company’s four businesses emphasized the importance of agility in successfully reimagining supply chain and go-to-market strategies amid geopolitical uncertainty.
Reflecting on the environment, James Miller, Partner at Oliver Wyman, stated: “Daily changes are paralyzing trade, impacting stock and bond markets, and slowing international commerce. Canadian businesses are deferring decisions due to fears of potential changes and market volatility, leading to a slowdown in M&A activity, lending, and capital expenditures.”
Discussing the insurance environment, Trevor Mapplebeck, Strategic Advisor, Marsh Canada, said: “Tariffs are driving an overall increase in the cost of capital for Canadian companies due to a perception of higher risk. As a result, organizations need to ask themselves some fundamental questions about their insurance capital strategies and explore alternative insurance solutions to drive cost-efficiency and effectiveness.”
Only about 1 in 4 of the companies surveyed during the webinar said they were mapping their exposures because of shifting trade policies.
Dan Kotwinski, Head of Advisory, Marsh Canada, said: “Organizations need to be better prepared. A lack of supply chain visibility not only exposes organizations to significant tariff-related risks but also highlights the danger of hidden single-source suppliers. An analysis of companies on our Sentrisk platform found that 65% of organizations have at least one hidden bottleneck in their supply chain that is critical to their operations.”
Looking forward, Alexandre Lefort, Partner, Oliver Wyman, said: “The current environment could be an accelerator for Canadian companies to diversify and become less dependent on the US market. Companies should take actions to manage tariffs effectively, but they should also reflect and adjust their market focus and strategy to take advantage of the 15 free trade agreements Canada has in force with 51 countries, covering two-thirds of the global economy.”
If you are interested in learning more about these themes or speaking to one of these experts, please contact Sean Vinson at sean.vinson@mmc.com or Amelia Woltering at amelia.woltering@mmc.com.
Amelia Woltering
Pronouns: She/Her/Hers
Head of External Affairs and Media Relations, Canada
