Insurance marketplace realities 2025 Spring update – Political Risk

Rate predictions: Political Risk

Trend	Range
	Flat to +20%*
	*China rates increasing upwards +50%+

Key takeaway

The new Trump administration’s trade policies, such as sweeping tariffs (now paused for 90 days except for China), and a more transactional approach to foreign policy, have layered additional volatility on top of a precarious geopolitical landscape. We recommend any clients with exposure in developing countries to proactively explore political risk mitigation options. Further, we advise clients to focus mitigation on a limited number of key countries where financial impact would be highest.

The political risk insurance market remains a hard market

• Rates stabilizing between flat to 20% for renewals depending on countries covered, but China renewal rate increases 50%+

Potential for tariff retaliation in focus for clients and carriers

• While tariffs themselves and not generally covered by political risk insurance, the potential for retaliation from countries with other tools (non-tariff measures) may be covered and a concern shared by both clients and carriers. Further, there’s historical precedent for economic tensions leading to larger diplomatic or military conflict.

We encourage clients with exposures abroad to proactively consider political risk transfer options for their country (ies) of investment and trade.

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Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).