The Challenge
A German insurer has acquired an insurance company in Romania as part of its international expansion strategy. The new subsidiary is repeatedly sued by a former client. Although the lawsuits are demonstrably unjustified, the subsidiary makes no progress in an uncertain legal and political environment. Dubious blackmailing attempts against subsidiary management accompany the legal attacks. The total amount of all lawsuits adds up to EUR 100 million – a multiple of the subsidiary’s enterprise-worth. Agora Strategy is mandated as part of a taskforce with an international law firm to solve the crisis and to navigate through presumable political entanglements.
The Agora Approach
Agora Strategy conducts a stakeholder and network analysis of the political landscape to identify key actors in the German and Romanian cabinet as well as at European level. Furthermore, within the scope of a forensic background analysis, Agora provides valuable information on similar cases of lawsuits against foreign investors in the insurance and finance field. Based on this assessment Agora Strategy develops a tailor-made engagement plan with concrete action recommendations. To ensure a fair level playing field and protect the client, Agora Strategy addresses the concerns of the client at highest political level in Romania and the European Commission. Selected measures of the Agora action plan include one-on-one-meetings at minister level, alliance-building with key stakeholders and equally concerned companies, a security audit and crisis communication plan. Furthermore, Agora Strategy helps in stetting-up a negotiation strategy with the counterparty and assesses different outcome scenarios.
International crisis management
The Outcome
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Political Risk Identification: Agora Strategy finds the originator consortium behind the lawsuit series
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Out-of-court Settlement: Solution in favor of the client with political support onto EU-level
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Future Crisis Prevention: Agora Strategy asses the business prospect in the market and implements an adjusted market expansion strategy to prevent similar cases in the future