As Political Risk Concerns Rise, So Does Insurance Interest

Two political risk reports are pointing to the continued instability in the Arab Spring countries as an ongoing concern for businesses in 2012.

Aon’s 2012 Political Risk Map notes that while clarity has begun to emerge in some of the countries affected by the Arab Spring, the resulting tension has spurred or intensified protests in dozens of countries, both within the region and elsewhere.

In a press release, Aon says that interest in political risk insurance is rising, as chief stakeholders take notice:

These uprisings and protests remain a key concern in 2012 and we see this reflected in rating downgrades of several countries. This is forcing CEOs and CFOs of businesses with overseas operations in emerging markets to revisit risk management and risk mitigation measures.†

In addition, the outcome of elections in the United States, France, Russia   and China may contribute to greater global uncertainty, while the eurozone debt crisis also remains a significant risk and extends to those countries economically or otherwise dependent on the region, according to Aon.

In similar vein, a recent report from risk analysis firm Maplecroft highlights the risk of continuing instability in Arab Spring countries among the most significant political risks for businesses and investors in 2012 and beyond.

Of the 10 states with the fastest increasing risk trends in Maplecroft’s short-term Political Risk Index, nine are located in the Arab world, reflecting the political upheaval and unrest taking place in the region. These countries are: Algeria, Bahrain, Egypt, Kuwait, Libya, Morocco, Oman, Syria and Tunisia.

Maplecroft’s analysis indicates there is also increased risk of unrest in other Arab states, including Saudi Arabia and Sudan.

Check out PC360Â  for more on this story.

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