Political Risk


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Political Risk

The risk that a foreign government will significantly alter its policies or other regulations so that it significantly affects one's investment. More broadly, it can apply to the risk that a nation will refuse to comply with an agreement to which it is a party, or that political violence will hurt an investment or business. For example, if one exports goods to a foreign nation, and that nation elects a new government that enacts protectionist tariffs, this will negatively impact the export business.
References in periodicals archive ?
Global Banking News-November 12, 2015--Zurich expands political risk group in Australia
Capacity in the political risk marketplace has grown steadily since the financial crisis, and at $2.
Ironshore International has announced that its Mergers & Acquisitions unit will provide coverage for Political Risk exposures.
But two coverages that are "particularly close to the epicenter of risk" are political risk and trade credit, said Stephen Kay, senior vice president and U.
Aon's Political Risk Map data and analysis shows the BRICS countries have an increased risk rating
World Investment and Political Risk 2013: World Investment Trends and Corporate Perspectives: The Political Risk Insurance Industry: Breach of Contract
This unrest can translate into a variety of political risks for businesses, including expropriatory actions, forced abandonment, forced divestiture, property damage, contract frustration, business interruption, and trade disruption," said Evan Freely, Marsh's global credit and political risk practice leader.
Risks have increased, both political and economic, to varying degrees, even though Fitch's ratings in the region already embodied a large amount of political risk.
I wouldn't say that it's a matter of companies having ignored political risk," says Roger Schwartz, national political lead at Aon Crisis Management.
Unrest in Egypt has sent prices for political risk insurance coverage up by 12 percent to 15 percent for companies established there, and even higher for some professionals like journalists and photographers, a political risk coverage expert said.
With the South African construction industry having hit a wall following 2010 and government's nationalisation debate steering new mining investment abroad, political risk experts report a rush of South African businesses into Africa, seen as offering greater returns on investment with comparatively manageable risk.
Political risk originates from the negative actions of social stakeholders of multinational enterprises (MNEs) in a given host country, such as the host government and other non-governmental actors.

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