Protection for a range of political risks
In emerging or frontier economies the risks to businesses and investors are often political and even with extensive due diligence can be difficult to anticipate.
In recognition of this, we are able to offer Political Risk Insurance to protect overseas investors against political force majeure type events. From its origins in America’s efforts to rebuild Europe after WWII through the Marshall Plan, Political Risk Insurance has developed into a comprehensive product offering utilised by a range of corporates including oil and gas companies, commodity traders, banks, renewable energy developers and increasingly, private equity. The London market alone now consists of around 50 ‘A+’ rated insurers, representing almost US$2.5bn of transactional capacity.
In its standard form Political Risk Insurance provides protection against a number of defined political risk events including but not limited to: war, political violence, expropriation, currency inconvertibility and breach of contract by sovereign entities. However, as a result of the continuing influx of capital into the insurance market as a whole and the political risk space specifically, there is a trend towards innovation and tailored solutions. For example, we now offer cover to insure the market value of an investment, provided any decline can be clearly linked to the political situation, with the idea of protecting investment firms’ IRR.
Accordingly, as well as giving corporates and investors ‘peace of mind’ against physical loss or damage, Political Risk Insurance can be used to broaden a fund’s investment horizon by unlocking markets which were previously ‘off limits’.
We consider claims throughout the entire client journey, from initial policy selection to final claim resolution. It is not just when a loss occurs that our claims expertise applies, it is an inherent part of everything that we do.
Our claims specialists work alongside our sector teams to ensure that they are an integral part of the client relationship. By handling claims in-house we are able to guarantee a consistent level of service and responsiveness, which everyone is committed to.