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Podcast

Risk in Context Podcast: Uncovering the Benefits of Political Risk Insurance

In this episode of our Risk in Context podcast, Marsh’s Julie Martin and Stephen Kay and Alexia Ash, director for risk quantification at IHS Markit, discuss the findings of the study and how this information can help businesses as they consider their investments in developing countries.

Political risk insurance can provide financial security for businesses making investments in foreign countries, helping to protect them against monetary losses stemming from government actions. Although political risk insurance (PRI) has been available for several decades, efforts to quantify the value of PRI are new.   A recent study by Marsh and S&P Global evaluated the potential benefits of PRI.

In this episode of our Risk in Context podcast, Marsh’s Julie Martin and Stephen Kay and Alexia Ash, director for risk quantification at S&P Global, discuss the findings of the study and how this information can help businesses as they consider their investments in developing countries.

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Key takeaways

Predicting country risk can be challenging.

Insufficient data has often contributed to difficulties understanding the extent of political risk in a country and the value that political risk insurance can add to a project.

Political risk insurance can provide added value.

Rather than being an expense, the study indicates that political risk insurance can enhance the internal rate of return of an insured project.

Quantification can aid funding efforts.

Data-based insights into the value of political risk insurance for individual projects have the potential to broaden investment interest and expand the pool of potential buyers for a foreign project.

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