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Cargo Undercover – the modern response to a new level of political risk

September 4, 2018

In today’s complex world, where war and political unrest are frequently reported, it is important to consider the evolving needs of our clients.
Credit, Political Risk and Terrorism
Geopolitical Risk

Willis Towers Watson has re-launched Cargo Undercover, a flexible suite of solutions that allows the transfer of specific geopolitical risks that goods in transit and storage may face, in addition to traditional cargo exposures.

Cargo Undercover provides coverage for the threats to cargo emerging from a full spectrum of risks, including those associated with war on land, terrorism, political risks and violence.

A volatile world for trade

Politically motivated risks are not a new concern. But the forces behind political change have become more active and feel less predictable, producing a new level of geopolitical risk.

The years since the global financial crisis have been turbulent, not only in emerging markets but also in developed countries, where populist candidates have found sudden successes.

Unpredictable economic growth, growing tides of immigration and increasingly inward-looking trade policies in Europe and North America have created an environment of uncertainty and regulatory reaction, compelling companies to respond quickly to these new threats.

Vulnerable supply chains

In this landscape of global uncertainty, it is even more important for brokers to be agile and provide the tailored products and solutions that help clients to offset the risk to their supply chains.

Global supply chains are being increasingly compromised by this upheaval, making the ability to manage or transfer risk, such as political violence, war on land and confiscation, a crucial part of ensuring business continuity.

Cargo Undercover infographic

A smart, tailored and flexible solution

Cargo Undercover is a unique product created to protect against traditional cargo risks and the exposure to political violence, terrorism, rebellion, political risks (leading to the confiscation or expropriation of cargo for example), terrestrial wars and looting, whether politically motivated or otherwise.

Cargo Undercover was specifically tailored to cover the full spectrum of political risks to cargo, combining exposures that would need to be covered separately:

  • Transits by sea, land or air
  • Goods in store including stock where no transit is involved
  • Political violence whilst in storage and during transit
  • Terrorism whilst in storage and during transit
  • Looting whether politically motivated or otherwise
  • War on land extended to include storage exposures
  • Revolution, rebellion and insurrection whilst in transit or in store
  • Confiscation, appropriation, expropriation, seizure, requisition for title, detention and nationalisation
  • Deprivation
  • Forced abandonment

Benefits to you

  1. Minimises the potential of gaps in coverage
  2. Reduces the likelihood of possible disputes that may arise in the recovery of claims and also removes the need to establish the motivation behind an event (which can prove difficult during political uncertainty)
  3. Can prove to be more cost-effective
  4. Is flexible: there is no requirement to purchase all sections of cover, giving cargo owners the flexibility to choose the specific cover their businesses need
  5. Provides protection from rising insurance costs when the country’s risk rating changes, as cover is purchased on a global basis

In this uncertain risk environment, many traditional solutions will increasingly be found wanting as the fragmentation of nations, global institutions and political norms drive involuntary migration, opportunism and conflict.

Flexible risk-transfer options such as Cargo Undercover are the modern response to the risks and exposures faced by clients in this new, less predictable world.

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