Political risk

In the years since the global financial crisis, emerging market volatility has continued to grow. If you conduct operations, or sell into these markets, you need to prepare for the worst. Zurich, one of the political risk leaders, has the experience and global presence to work with you to identify global trends and political conditions that can indicate a region's stability. 

 

Why Zurich?

Zurich provides political risk insurance for more than 300 of the world’s leading companies, including financial institutions, multinational corporations, project developers, investors, exporters and infrastructure developers. Zurich’s worldwide presence and experience can offer your business the resources it needs to manage risk.

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Solutions for political risk

Political risk insurance

In order to offer long-term insurance protection to businesses confronting the political risks of emerging markets, Zurich leverages country-specific risk analysis to produce thoughtful foresight. Coverages are customized transaction-by-transaction to address the risks arising from political events where our customers do business. Policies can be done in a multi-country portfolio format or on a project specific or contract specific basis. Terms can extend up to 15 years, with capacity of up to USD $150 million per transaction.

Available coverages include:

  • Expropriation
  • Political violence
  • Currency inconvertibility

Non-honoring of sovereign guarantee insurance

Non-honoring of sovereign guarantee insurance provides coverage to financial institutions, contractors and exporters in the event of payment defaults by sovereign, sub-sovereign and/or state-owned entities in emerging markets. Zurich’s coverage can apply to sovereign payment defaults under direct loans, loan guarantees, letters of credit issued by state-owned banks, or sales contracts with state-owned or controlled businesses.

Zurich collaborates with government investment insurers, private insurers, multilateral agencies, international banks and other organizations to help optimize policy terms, capacity and flexibility for our customers.

Hospitality industry

The political risk exposures of hotel and resort chains can be unusually complex because of the numerous manners in which they integrate into emerging markets - from franchise-style ventures managed through local joint venture companies to direct equity investments.

Zurich’s coverage allows a hospitality business to insure multiple forms of investment against a spectrum of political risks in each country in which it operates - all in a single policy.

This single-policy approach represents a significant advance over the alternative practice of securing political risk coverage country by country, with individual policies and coverage limits for each country. Rather, Zurich’s approach enables a hotel or resort chain to manage its political risks in one cost-effective policy, with terms up to 15 years and capacity up to USD $150 million. 

Available coverages include:

  • Expropriation
  • Political violence
  • Currency inconvertibility

Infrastructure developers and lenders

Many governments of emerging markets are turning to the private sector to finance, build and deliver essential services, including telecommunications, energy, transportation and water services.

Zurich provides a long-term commitment of its own: We extend political risk coverage terms up to 15 years, with capacity up to USD $150 million per transaction. Coverages can expressly address the significant political risks that go hand-in-hand with infrastructure development in emerging markets. We offer the following coverages:

  • Contract frustration
  • Expropriation
  • Political violence
  • Currency inconvertibility
  • Wrongful calling of bonds
  • Forced abandonment and other coverages

Mining companies

Zurich works hand-in-hand with mining companies operating in emerging markets with solutions that can help them protect their business development and project finances.

Zurich provides a long-term commitment to mining companies and lenders. Coverages are written with an understanding of the political risks associated with the mining industry. We extend political risk coverage terms up to 15 years, with capacity of up to USD $150 million per transaction. Coverages can expressly address the significant political risks that go hand-in-hand with mining, providing:

  • Expropriation
  • Political violence
  • Currency inconvertibility
  • Forced abandonment and other coverages

Multinationals

Recent events have underscored how swiftly a government or business climate can turn, leaving multinationals vulnerable to loss. Zurich offers highly flexible political risk insurance expressly designed to meet the long-term needs of multinationals in emerging markets. Our political risk policies provide large-scale capacity of up to USD $150 million per risk and can extend coverage up to 15 years. 

Available coverages include:

  • Expropriation
  • Political violence
  • Currency inconvertibility
  • Contract frustration
  • Non-honoring of sovereign guaranty
  • Forced abandonment and other coverages

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