Despite Turkey, Political Risk Insurance Remains a Buyer’s Market
The short-lived attempted coup in Turkey damaged several government buildings and killed more than 200 people. It’s the latest in a long string of unsettling political unrest in recent years, from 2011’s Arab Spring to Russia’s annexation of the Ukrainian territory of Crimea in 2014. But even after so much turmoil, you can readily access political risk insurance to protect your business against a variety of global risks.
Still an Attractive Line
Following the failed coup in Turkey, political risk insurers are carefully monitoring the risks they underwrite in the country. Their reaction to Turkey has mirrored events in Russia, Brazil, and other countries that have seen unrest in recent years: Political risk coverage is available, but insurers are being more selective.
For buyers with low to medium risk portfolios, political risk insurance is particularly accessible. Despite some losses and an increase in claims notifications, insurers still view political risk as a profitable line of coverage. And they’re competing for new and existing business — which means that buyers can potentially obtain the coverage at favorable rates.
Taking a Multi-Country Approach
Despite the overall favorable market conditions, recent events illustrate that political risk is no longer an issue for emerging markets only. Businesses are learning that political risk is unpredictable and can quickly develop — even in countries that historically were considered “safe.”
So how can businesses protect themselves from this unpredictable risk? One answer is a multi-country political risk insurance policy. Such policies provide coverage for a list of specific countries — often 20 or more — in which a company operates, including some that might be difficult to insure on their own. And multi-country coverage is usually available at attractive rates and with favorable terms, including broader definitions and multi-year coverage.
A multi-country coverage approach can help you avoid having to predict where your next trouble spot will be. Work with you insurance advisors to understand your specific political risks. In this continued buyer’s market, you can potentially lock in low rates for the next several years, which can help protect your assets virtually everywhere you operate.
For more on the latest trends in political risk and other commercial insurance markets, listen to a replay of Marsh’s recent New Reality of Risk webcast.