Political Risk Higher

Elevated political risk levels will continue in 2010, as political and financial instability remain a feature of the business landscape as a result of the recession, according to the 17th annual political risk map produced by Aon. In its ranking of the political risk in 209 countries and territories, Aon said the following 18 countries have seen conditions worsen in the past year leading to a downgrade: Algeria, Argentina, El Salvador, Equatorial Guinea, Ghana, Honduras, Kazakhstan, Latvia, Madagascar, Mauritania, Philippines, Puerto Rico, Seychelles, Sudan, United Arab Emirates, Ukraine, Venezuela and Yemen. Meanwhile, Sudan, Venezuela and Yemen have been added to the very high category, joining Afghanistan, Congo DRC, Iran, Iraq, North Korea, Somalia and Zimbabwe. On a more positive note, eight countries/territories have been upgraded to a lower risk level. Aon said overall rising risk levels in 2009 have led to a significant volume of credit and political risk claims in international insurance markets. It pointed to non-payment of sovereign and sub-sovereign debt obligations as a major issue for underwriters insuring risks in Ghana. Insurers also continue to experience a multitude of claims stemming from payment defaults by private sector banks in Ukraine. The map measures the risk of currency inconvertibility and transfer; strikes; riots and civil commotion; terrorism; sovereign non-payment; political interference; supply chain interruption; legal and regulatory risk. The 2010 risk   map introduces new indices looking at food, agricultural commodity and water supplies. Check out I.I.I. information on terrorism risk and insurance.

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