Geopolitical risks are on the rise and growing more complex, making global business operations more challenging. Political risk insurance can help protect companies against the financial impact of adverse political events.
Political risks are inherently difficult to predict and past events are not a reliable indicator of what will happen in the future. While investing in developing markets can offer attractive new revenue and margin opportunities, it can also present a variety of political risks that are beyond an investor's control and can quickly leave them facing a loss.
Common political risk scenarios
- A change of government may result in the confiscation of a business’ assets.
- A loss of a license could deny a company the right to export its goods.
- Political violence could result in the destruction or temporary damage to assets.
These risks can have lasting financial consequences, but specialist political risk insurance can mitigate them.
What does political risk insurance cover?
Political risk insurance typically covers:
- Confiscation, expropriation and nationalization
- Deprivation
- Forced divestiture
- Selective discrimination
- Forced abandonment
- Export embargo
- Breach concession
- License cancellation/revocation
- War
- Political violence (including terrorism)
- Business interruption (BI)
- Currency inconvertibility/exchange transfer
Who is political risk insurance for?
Any organization:
- Investing in emerging markets
- Leasing equipment overseas
- Negotiating contracts for goods/services to foreign governments or state-owned companies
Why choose WTW for political risk insurance?
We specialize in providing political risk insurance to companies operating around the globe. We will invest the time to understand client's business in order to provide bespoke solutions to mitigate these risks.
Innovation
We have a reputation for innovation – we developed the first political risk captive and the first Basel II compliant wording and continue to adapt our products to meet the needs of our clients.
Experience
The expertise of our team distinguishes us. We recognize the power of thinking differently, that’s why our people come from many different backgrounds, including banking, and underwriting.
Global hubs
We have hubs in New York, London and Singapore that give us real-time access to the more than 60 insurance markets operating globally. Working from a single profit-and-loss account our clients can be confident that the insurers we recommend are chosen solely on the merits of what they can offer.
Claims
We have a dedicated claims team available to help you when a loss occurs and have successfully collected more than $1 billion in credit and political risk claims globally since 2008.
*Source: WTW Global Claims database - WTW Credit & Political Risk notified losses from 1 Jan 2008 to 15 July 2024.
