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Survey Report

Insurance Marketplace Realities 2022 – Political risk

November 15, 2021

As pandemic-related aftershocks impact economic and political institutions, particularly in emerging markets, political risk is amplified.
Credit and Political Risk

Rate predictions

Rate predictions: Political risk
  Trend Range
Political risk Flat to +20%

Key takeaway

The global economy continues to experience uncertainty stemming from the COVID-19 pandemic, as pandemic-related aftershocks impact both economic and political institutions, particularly in emerging markets, amplifying political risk.

The pandemic has been costly in financial and social terms, adding to political risk exposures.

  • Soaring costs to combat the spread of COVID-19 have drained resources from many emerging market economies, most notably Africa, where the UN has called for over $200 billion in monetary infusions to combat capital flight.
  • Important emerging markets in South America, including Argentina and Colombia, have begun to call for the restructuring of their foreign loan obligations, warning of possible default if no such action is taken.
  • Currency inconvertibility and non-transfer coverage remain popular, particularly in commodity-dependent countries, but also in nations that continue to face economic consequences, including inflation and rising debt, stemming from the pandemic-related slowdown in the global economy.
  • Other nations around the globe are beginning to experience political unrest as populations grapple with poor economic circumstances amid the added pressure of restrictive policies established to combat the spread of COVID-19.

Political instability has continued to escalate in many countries and multinational corporations will need to navigate social unrest and political volatility.

  • The U.S. withdrawal from Afghanistan and takeover by the Taliban have forced many companies and organizations operating in the country to abandon operations or reassess their presence.
  • Peru has elected a leftist president, Pedro Castillo, whose campaign rhetoric included nationalization and renegotiating mining agreements with multinationals. Some analysts attribute his election to the high death toll of COVID (the highest per capita in the world) and to increasing inequality.
  • In the mining-rich country of Guinea, a military coup displaced the democratically elected government, causing some commodity prices (e.g., for aluminum) to soar. So far, the new government has left mining concessions alone, but uncertainty remains.
  • A spate of recent coup attempts in West Africa also rocked Mali, Chad and Niger (with varying success). Root causes cited by observers include increased poverty, unemployment, corrupt leadership and a youth bulge welcoming promises of radical change. Many are concerned about a return to the rampant upheaval of the early postcolonial era.
  • Tensions between the U.S and China remain high.
    • Under the Biden administration the two nations continue to exchange heated rhetoric and clash over trade and other foreign policy issues.
    • China has passed a law intended to implement retaliatory sanctions in response to foreign sanctions toward it, including import and other restrictions.

We are following several trends in the political risk insurance marketplace.

  • The marketplace continues to experience rate increases.
  • Property carriers are increasingly excluding strikes, riots and civil commotion from their policies; the resulting gap in coverage can be addressed through political risk insurance.
  • Capacity for China, Brazil, Turkey, Peru, Argentina, Chile and Belarus appears to be tightening.
  • Market conditions are also more challenging in certain sectors, such as technology and retail.
  • Carriers are maintaining a selective approach, insisting on increased due diligence.
  • We advise multinational companies to maintain a proactive approach to their global portfolio.
  • For more detail on political risks in specific industry sectors, please see our recently published reports in collaboration with Oxford Analytica:


Willis Towers Watson hopes you found the general information provided in this publication 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, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


Senior Vice President, Political Risk, Americas,

Laura leads WTW’s political risk solutions in the America’s with over a decade of experience in political risk.

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