Strong capacity drives buyers' market for political risk insurance – Marsh

Abundant capacity and strong competition have contributed to a generally favorable marketplace for buyers of political risk insurance globally as the second half of 2015 approaches, according to Marsh.

Publishing a new briefing at the Airmic conference, Marsh said that market capacity for political risk insurance now exceeds $2bn (€1,28m) for a single policy – almost double the capacity that was available six years ago.

The broker added that despite a recent increase in loss notifications – such as non-payment, physical damage, forced abandonment and currency controls, which will likely translate into some losses for insurers later this year – insurers generally view political risk as an attractive line of business in which to compete.

It added: “With pricing at an all-time low, multinationals are increasingly purchasing political risk insurance to protect shareholder value, support growth in foreign markets, and help secure financing from lenders.”