Private Insurance Companies and Markets
Private insurers and commercial banks have tended to focus mostly on providing coverage for commercial risks and short-term export credit insurance, however are increasingly offering political risk insurance (PRI). More information on insurance against commercial risks can be found here.
Lloyd’s of London
Rather than an insurance company, Lloyd’s is an insurance market where independent underwriters join as syndicates. Currently 96 syndicates exist, enabling underwriters to pool and spread risks.
Lloyd’s issues different types of political risk insurance. ‘Trade-related’ cover insures against import/export embargo, non-payment or non-delivery of prepaid goods, licence cancellation and unfair calling of on-demand contract bonds. ‘Political violence’ insurance covers risks such as war on land, terrorism, riots, strikes, civil commotion and malicious damage. ‘Other asset’ cover mitigates risks such as confiscation of fixed or mobile assets, inconvertibility of foreign currency and aircraft repossession.
Private insurance companies
ACE’s political risk insurance aims to mitigate cross border risk for companies such as financial institutions, exporters, importers, equity investors, and contractors’ plant and equipment. Covered risks include contract frustration, loss of a foreign enterprise due to government action or political force majeure, war or political violence.
American International Group, Inc. (AIG)
AIG’s political risk insurance is available for equity investments, physical assets, cross-border loans and contracts for goods and services. It covers risks such as confiscation, expropriation or nationalisation, currency inconvertibility and non-transfer, political violence (including terrorism and war); contract frustration due to political events, sovereign payment default, and wrongful calling of on-demand contract guarantees and bonds. AIG has a local office in Singapore.
AON’s political risk insurance mitigates risks such as war/civil unrest, import/export embargoes, arbitrary termination of contract by a state purchaser, withdrawal of license, loss of receivables through non-payment, exchange, transfer and payment bans, other arbitrary intervention by the state, non-issue of a confirmed letter of credit, unjustified drawing on bank guarantees made payable “on first request”, nationalisation and confiscation by the sovereign authority, expropriation of machinery and equipment, revocation of rights of disposal, and transfer ban for investment income.
Atradius offers insurance against political risks such as confiscation, expropriation, nationalisation and deprivation.
Marsh’s political risk insurance covers risks such as contract frustration, exchange transfer controls, expropriation, non-payment, war, civil war and terrorism. It can cover, for example, equity investments, loans, inventory and receivables. Marsh offers insurance for transactions in a majority of Southeast Asian countries: Indonesia, Malaysia, Philippines, Singapore, Thailand and Viet Nam.
Willis’s political risk insurance mitigates risks of trading and investing in volatile emerging markets, protecting against risks such as expropriation, sovereign borrower default, exchange transfer controls, corporate default and license cancellation. Willis offers insurance for transactions in most Southeast Asian countries: Singapore, Brunei Darussalam, Indonesia, Philippines, Malaysia, Myanmar, Thailand and Viet Nam.
XL Catlin’s political risk insurance mitigates risks faced by corporations and traders with overseas investments, as well as financial institutions. Examples include currency inconvertibility and non-transfer, expropriation, nationalisation and confiscation, non-honouring of arbitration award, non-payment by sovereign, sub sovereign and state-owned banks, non-payment by state owned banks under loans and letters of credit, non repossession of mobile equipment, political violence and pre-shipment risks and unfair/fair calling of a bond.
Zurich Insurance Group
Zurich’s Trade Credit, Credit and Political Risk insurance provides cover against risks such as expropriation, political violence, currency inconvertibility, non-payment, liquidation, bankruptcy and ongoing defaults across the world.