International Marketing (MWF: 10-1050)
Case Study 2 – Munich Re
Since the late 1800s, Munich Re has been a leader in the field of reinsurance business, and is the largest reinsurance company in the world. The company has been tasked with many challenges throughout its tenure, but continues to strive to be better. Munich Re has made changes to both its marketing strategy and product mix to help counteract the emergence of various risks and obstacles. The most innovative forms of risk management involve terrorism and environmental/ecological factors. Essentially, one can define a political risk as any factor that poses a threat of losing money that is caused by changes in a country’s government or regulatory environment. Declaration of war or terrorism (or both!) are considered in this particular risk category, and are the most extreme examples of such. Terrorism wants to strike where it can hurt the most and is an entity with the patience to wait it out to do so. The terrorist attacks of September 11th was an attack on a world superpower. The attacks had many political and economic implications, as it halted US airspace, disrupted worldwide finance, as well as throw many in-area businesses into complete disarray. “These actions are representative of corporate terrorism with the greatest of scopes.” According to the text, companies can prepare for the potential risk associated with terrorism. Some of the options to reduce risk include employee training in terrorism avoidance, purchasing of terrorism insurance, as well as securing buildings and the associated grounds.
Human atrocity is rampant, spontaneous, and difficult (if not impossible) to predict. Munich Re, as well as many other reinsurance companies across the world were simply not prepared for such attacks. As a result, the severe loss of capital forced a change in the marketing mix, as well as an overhaul of the market strategy. They started with the product and price. One