Geopolitics, a new framework for business activity

For years, geopolitics was not a real topic of concern for most businesses. The field was reserved for analysts, policymakers, and multinational companies with distant interests. That era is changing. Currently, geopolitics is no longer an external factor but the framework in which businesses operate and, in some cases, must ensure their continuity.

The belief that risk always manifests itself visibly and measurably persists. In practice, it is often the opposite. Early signs of tension typically do not appear in quarterly results or margins, but in the conditions imposed by insurers and in the attitudes of lenders. Ignoring these signals often means falling behind. Companies that wait for financial indicators are, by definition, lagging behind.

What fundamentally sets the current environment apart is not just the increase in risks, but their more diffuse and systemic nature. Focusing on physical damage – a factory, a ship, an installation – obscures the bigger picture.

Most of the impact increasingly stems from disruptions: goods not arriving or arriving too late, contract delays, late payments. It is rarely spectacular failures, but rather a series of minor disruptions that slowly unbalance businesses.

This is where the risk lies. Because these disruptions not only affect activity but also the trust among partners, in chains, and in markets. Liquidity tensions are often the first visible sign, long before the operational impact fully manifests.

In parallel, the way credit is evaluated is evolving. While historical performance remains important, it is relatively less so. Financiers are paying more attention to current signals, such as payment behavior, transparency in the chain, flexibility in contracts, and structures.

This leads to a new reality where information becomes a true competitive advantage. Companies that can clearly articulate their risks and support them generally have easier access to capital. Conversely, for those who cannot, conditions quickly tighten, and financing becomes more costly.

Moreover, a new strategic concept is emerging: insurability. While insurance used to be the final step in a decision, it is now becoming a prerequisite.

In this context, solutions such as political risk insurance are also evolving. What was once a niche market is now an essential element and a strategic pillar. It not only serves as a security net but also as a catalyst – a way to ease transactions, investments, and projects.

The timeline is also crucial. Companies that start thinking ahead have more options. Those who wait until volatility is visible face a tougher market where conditions are less negotiable.

This dynamic challenges a fundamental principle of recent decades: maximum efficiency. Globalization revolved around optimization – cost reduction, chain rationalization, just-in-time deliveries. Now, the focus shifts towards resilience.

Redundancy, diversification, and transparency are no longer luxuries but necessities. This incurs additional costs, but the real question is: what is the price of inaction? In many sectors, this latent cost ultimately proves to be much higher.

However, this does not mean markets are closing. Capital and insurance capacities are still available. But they become more selective, more critical, and evolve rapidly according to changing circumstances.

The real fracture line is not the absence or presence of risks within companies – this boundary does not practically exist. It lies between organizations that understand, document, and proactively adjust their risk profile, and those that do not systematically.

In this context, waiting becomes a risk in itself. When the global situation becomes clearer, markets have generally already adapted, and some maneuvering room has vanished.

Geopolitics is no longer an isolated risk to manage among others. It is the broader framework in which all operational, financial, and strategic decisions are made. Companies that realize this expand their scope. Others play a game whose rules have already changed.

Jelle Cortoos, Head of Structured Credit and Surety, BeLux, Aon