Canada, with its long history of mining, is home to some of the world’s largest mining companies whose operations extend far beyond Canada’s borders. And because Canada is a resource-rich country, most mining companies have a footprint here. However, history has taught us that diversification reduces the overall risk profile and provides an opportunity for greater economic impact.
Expanding mining operations to other resource-rich nations while maintaining Canadian mining standards and best practices is an ideal climate for insurance companies. The business interruption risk is spread across multiple jurisdictions, and the insurance industry finds comfort in adhering to Canadian risk management principles. But operating in jurisdictions where there is political instability or where there is a public opposition to mining poses a higher investment risk. Insurance products are available to transfer aspects of political risk as well as the risk of political violence, which helps reduce the overall balance sheet exposure. Multinational insurance placements are complex and require a strong understanding of local insurance regulations to ensure compliance. There are many strategic…
