Dynamic risk modelling: A strategic approach to surviving geopolitical volatility

The Middle East crisis has had an immediate effect on energy prices and has exacerbated some regional fragmentations and volatility. Looking to the medium term, Gilles Moëc, Chief Economist at AXA Group, and Xavier Veyry, APAC & Europe CEO at AXA XL, discuss the potential implications of the conflict for financial markets and business confidence, and the role that strategic risk modelling will play in building resilience. 

Xavier Veyry: The current conflict in the Middle East is the latest example of a profound reshaping of the overall macroeconomic and geopolitical landscape – from a future energy mix perspective, a sovereignty perspective and an overall trade alliance perspective. It’s always difficult to predict the future, perhaps never more so than today, and that means we need to be agile and flexible to respond to the changing needs of our clients as they plan for tomorrow. Data and strategic risk modelling will be key to this. 

Across our different lines of business – whether in political risk, marine or multinational programmes – innovation is increasingly driven by the need to better anticipate and manage interconnected risks. This includes advanced risk modelling, real-time monitoring of exposures and more integrated solutions that combine insurance and risk consulting to give clients a clearer view of fast-moving situations.

But, as the Middle East crisis continues, Gilles, are you able to share some insights into the economic impact of the conflict to date and what we and our APAC and Europe clients need to be thinking about for the medium term?